Interview with distribution Selex, private label accounts for 1.4 billion euros

THERE'S LUCA VACCARO, PL DIRECTOR, TO TALK WITH PL MAGAZINE.

Selex, private label accounts

for 1.4 billion euros

The group is the second largest player in Italian large-scale distribution, with 3,200 points of sale, a 360 million euro investment plan and a PL share of nearly 28%.

Selex Gruppo Commerciale - with a 16.15 billion turnover, up 10.3% in 2019, is the second largest player in Italian large-scale distribution, with 3,200 pos, and a 360 million euro investment plan for 2021 that, when fully operational, will lead to 72 new openings and 135 restructurings. Since January 1,6 new -members have joined Selex - the Sicilian CDS and the 5 companies of Consorzio Sun - for a total number of 18 companies. In this respect, what is the impact of PL? We asked Luca Vaccaro, PL Director.

Let's start with the key figures... In 2020, our private labels grew by 10% over 2019, with sales revenue of €1.4 billion and a share that reached peaks of 28% in several regions. The introduction of Consilia, Sun's private label, which joined the other main brands, such as Selex and Vale, obviously contributed to this trend.

How many references are there? We’ve exceeded 7,500. In points of sale the number varies depending on the format and, of course, on the size. However, the average range is between 800 and 2,000. Within our wide range of products, the Selex brand is the one that benefits from the most extensive market segmentation, as well as the one that covers the largest number of categories.

What's new? We’re definitely focusing on high-end, fresh and extremely fresh, organic and health products. Among the leading brands are Saper di Sapori (typical and local products), Vivi Bene (wellness and free from) and Natura Chiama (organic, ecological, controlled supply chain). Looking to respond to our consumers in a targeted manner with a precise and dedicated supply, for some years now we have covered categories also with fictional brand names. This is how the cosmetic line, Armonie e benessere, which features both a classic and an organic line, was created. But, the most significant launches in 2020 concerned fruit and vegetables of Saper di Sapori brand, and cold cuts and cheeses in the deli counter. As a result, we’re now dominating the scene of over high-growth markets and even closer to our Members, who provide us with the best specialties of their territory. In addition, we’re covering the 'antibiotic-free' market, both in meat and eggs, strictly from free-range farming. Here, our Natura Chiama brand controls the entire supply chain. All the lines I’ve mentioned, together with ecological detergent products, will be key to our strategies.

Total PL references 7,500

Turnover 16.15

billion euros

Turnover 2020 vs 2019 +10.3%

2021 Investments 360

THE KEY FIGURES OF SELEX GRUPPO COMMERCIALE

million euros

PL turnover (2020)

in 1964

Founded 2021 Expected turnover trend +4%

Total pos

1.4

billion euros

Total members

3,207

18

Does sustainability match PL? Of course. In Selex we’re working on a variety of objectives, some of which have already been achieved. Let's talk, in the first place, about sustainability at work. All our suppliers in the agricultural, fruit and vegetable sector are enrolled in the Protocollo del Lavoro Agricolo di Qualità (Agricultural Labor Quality Protocol) or equivalent certification. In other categories, we’ve required the use of Grasp, the module of Global Gap, or SA8000 certification. Moreover, we privilege the use of Italian raw materials, included in over 500 references. As already mentioned, we said ‘no’ to cage farming, and not only for the eggs sold as they are, but also for those used as ingredients in industrial processing. In the world of detergents, we have eliminated parabens and microplastics and are now in the process of eliminating matting agents. Going back to food, in collaboration with Catholic University of Piacenza, we’ve launched the website

‘comemangio.it’, a real food education portal based on the principles of proper nutrition, Mediterranean diet and food pyramid. On the website, you may also learn how to properly read product labels.

What about packaging? This is another very important issue. So, we’ve carried out large-scale analyses of the materials used in our brand packaging. For about 18 months, we conducted a series of inspections and interviews with recyclers and disposers, to understand what really happens to our packaging after consumption. The first thing we did was to reduce packaging, which resulted in a 9% container weight loss and an environmental saving of 49 tons of plastic. We replaced 30% of virgin material with recycled material in the target categories. Over 273 tons of non-recyclable packaging was replaced with recyclable materials. We’re currently working on overpacking in our rice category by eliminating the external cardboard box, saving 155 tons of packaging. That’s not it, thanks to new technological solutions and the commitment of our suppliers, who are increasingly sensitive to the subject, our analysis and operations continue.

On average, how long do your relationships with suppliers last? Getting longer and longer. As for Selex, that’s about ten years. Over time, largescale distribution has made a significant change in this sense and therefore the turnover of suppliers has been greatly reduced, in order to make room for a true collaboration. Since the PLs are important, we must find the courage to invest in their supply chain, to build a relationship based on respect, fairness and trust, while banishing auctions, but also the idea of low prices as the only point of discussion.

Let's wrap up with your best sellers.... The last year has been - do I really need to say it? - absolutely atypical and has brought success to products such as disinfectants, antibacterials and detergents in the broadest sense. It is also well known that, in the food sector, packaged products, imposed weight products and long-life products performed better than others, and this is true both for private labels and for the brand industry. But from a long-term perspective, our real best sellers are all the specialized and highend products, which PL has made truly accessible. A great asset of Selex is the wine department, where our brand, Le vie dell'uva, counts over 70 labels in red, white and sparkling wines. In the wine market, the introduction of large-scale distribution has represented an important moment of clarity and loyalty. This is particularly true for Selex that, thanks to 18 members, widespread throughout the territory, captures all the richness of Italian food and beverage.l

Luca Salomone, professional journalist specialising in consumer goods, distribution, shopping centres and finance.