Interview with distribution Colruyt, PLs with complete cycle

THERE'S STEFAN GOETHAERT, COLRUYT GROUP FINE FOOD AND PL MANAGING DIRECTOR, TO TALK WITH PL MAGAZINE.

Colruyt, PLs with complete cycle

The giant Belgian company goes beyond the logic of supply. Despite its industrial partners, at the heart of PL supply is production, Colruyt group Fine good.

Founded in 1950, the group is a market leader in Belgium. On 31 March 2021, the total distribution network , including sales points in France and Luxembourg, accounted for 720 independent and 591 affiliated supermarkets. Its consolidated turnover reached 9.9 billion euros. Pls are very relevant. In fact, according to the Plma’s Yearbook, in 2021 Pls gained a 43.4% share on Large scale distribution sales. We discussed it with Stefan Goethaert, Colruyt group Fine food and PL Managing Director.

What’s the role of your products? Their role is crucial. Even though the share value is confidential, I can say that, for each category, we really want to offer three levels of supply: national brands, brands for families and Everyday. Sold at the best possible price, national brands are usually associated with continuous innovation, although PLs are now highly innovative. Our brands for families combine high quality and affordability; this would be the case of the umbrella brand Boni and of our caffè Graindor. Then, there’s Everyday, our first price category. It includes good quality food commodities, which are the most cost-efficient in their category.

Turnover (million euros) 9.931

Fiscal year 20/21, closed on 31 March 2021

Belgian market share on the turnover 92,4%

Gla area of direct sales points (mq) 861.000

COLRUYT GROUP'S

Date of birth 1950

Investments (million euros) 469

Total sales points (direct or associated) 1.311

Employees 32.945

Has the PL taken off? If so, how? Again, data, in terms of number of references, are confidential. However, our assortment is really wide. Our pillars are Boni selection, indeed - with our sub-brands Boni Bio, Boni Eco, Boni No Gluten, Boni Veggie and Boni Kids -, Everyday and Graindor, whose coffee toasting is made in our laboratories in Belgium. We’re also present with Kangouroo’s school items.

Definitely a wide basket. Do you think this may be misleading? Absolutely not, because our customers are great at choosing according to their needs. So, the cart is always varied and includes, as usual in large-scale distribution, both big industrial brands and high-range PL products, as well as a set of money-saving goods. After all, at least for Colruyt, a best-price promise provides the Idm (branded industry, ed.) with an important place in terms of demand and sales.

What are the PL leading divisions? Colruyt is not only a distributor, but also a producer. So, it’s no surprise that butchery and cold cuts are so relevant, considering, fine food meat, our business unit of meat processing. However, I’d say frozen products are runners-up.

Why would a distributor be also a producer? Because it is one of our ways of interpreting sustainability. By producing firsthand, we have full control over costs, quality, and over the whole value chain. Moreover, we can easily adapt to the changing needs of our consumers. Speaking of important needs, I mean health and wellbeing, social and environmental responsibility, and animal protection. Today, these are the trends, but these trends are never steady, although they all tend to intensify and refine. Through our Colruyt Group Fine Food division, we can guarantee flexibility, thanks to seven business units: Fine food bread, Fine food wine, Fine food cheese, Fine food meat, Fine food spreads, Fine food coffee and Fine food smart crops.

We’ve talked about sustainability. What can PLs do? Sustainability has always been extremely important, in absolute terms and in particular today, as people are increasingly aware of the environmental emergency. For our Boni brand, Csr is a true mission. These products aim at encouraging the most sustainable choices and the most responsible consumption. So, in 2021, we also added Eco-score (a label that shows the environmental impact of a product ed.). And, plus, there’s Boni eco, a non-food range of products, for cleaning and home care, which meets the directions of the European Ecolabel. Local origins are important too. And so, we’ve developed, for Boni Bio, a soy-based vegetable hamburger, with soy grown in Belgium. More generally, our group implemented its own strategy of visual simplification, ‘Pas à pas’. In a nutshell, through a specific on pack iconographic repertoire, customers are invited to consume responsibly respecting health, animal wellbeing and the environment.

Any plans for the future? I’ll give you only one example. We’re going to create the first ‘farm of the sea’, in the North Sea, for mollusk farming of Belgian origins. ‘Farm to sea’ will be under the Boni brand by 2022 fall, first temporarily, in limited quantities and then, permanently, in 2023.

Let’s wrap it all up with the duration of your contracts with your partners... It depends on the products, but, mostly, our contracts are annual, even though our goal would be to establish long-lasting relationships with our suppliers.l

Luca Salomone Professional Journalist specialized in Consumer Goods, Distribution, Shopping Centres and Finance.