PL Magazine July 2022 by Edizioni DM Srl

Private Label Magazine

Everything must change for everything to remain the same. Innovation as driver and need of private label Lidl and its highly diversified private label NT Food and the challenge of making ‘gluten-free’ more colorful and enjoyable 4/2022

SOMMARIO - PLM

Editorial Retailer brands stand the pandemic test. But, Amazon wipes them out?

4 Cover story Everything must change for everything to remain the same. Innovation as driver and need of Private Label 14 Interview with distribution Lidl and its highly diversified private label

18 On-the-field experiences New economy discovers private labels 20 The private label scenario What are the most searched PL products of large-scale distribution online?

Editorial director Maria Teresa Manuelli

Translation Jcs - Language Services info@jcslanguage.it

44 QBerg observatory Free-from products are increasingly consolidated

32 Interview with the company NT Food and the challenge of making ‘gluten-free’ more colorful and enjoyable

PLMagazine Bimestrial supplement of Distribuzione Moderna magazine, a media outlet registered with the Court of Milan Registration No. 52 of 30 January 2007

Editor-in-chief Armando Brescia

36 Markets The ever persuasive healthy world now even for PLs

Scientific Committee Stefano Ghetti, Managing Partner Expertise on Field/partner IPLC Italy Gianmaria Marzoli, Retail Solutions Vice President IRI Italia Alberto Miraglia, General Manager Retail Institute Italy Paolo Palomba, Managing Partner Expertise on Field/partner IPLC Italy Emanuele Plata, Co-Founder, Past President, Board Advisor PLEF Contributing Authors Federica Bartoli, Stefania Colasuono, Maria Teresa Giannini, Fabio Massi, Fabrizio Pavone, Luca Salomone

Creative Director Silvia Ballarin Editor Edizioni DM Srl - Via A. Costa 2 20131 Milano P. Iva 08954140961 Contact Phone 02/20480344 redazionedm@edizionidm.it Advertising Sales office: commerciale@edizionidm.it Tel: 02/20480344

There is no guarantee that we will publish the original versions or any part of submissions (texts, articles, news, images, data, charts, research, etc.) sent by authors outside the Editorial Board. Submissions may, however, be published in a revised form for editorial reasons. It should also be noted that sending a submission constitutes an automatic authorisation by Edizioni DM Srl to publish it free of charge in all its publications.

EDITORIAL - PLM

Retailer brands stand the pandemic test. But, AMAZON wipes them out? A heyday for private label brands. According to a survey sponsored by the Plma International Council, first the pandemic and then the price crisis have changed Europeans' purchasing habits in favor of private labels. Indeed, nearly three in ten respondents say they now buy more private label products, and nearly four in ten will do the same in the next two years. The study, titled 'Will Europeans ever shop the same?', found that when comparing distributor brands with manufacturer brands, 60% of respondents consider their products as equivalent, while 20% prefer PLs. Also according to Plma data, the share of sales generated by retailers through their PLs is growing steadily, fluctuating, varying between 30 and, almost, 60%, depending on the country. With this in mind, then, Amazon's recent decision to reduce its PL supply can hardly be explained. According to reports in the Wall Street Journal, Amazon might even shut down for good the PL business. By 2020, the Seattle-based giant had reached 243 thousand products with 45 different own brands (see p. 19), something that was, of course, a source of controversy as it was going to compete directly with other sellers that make use of its platform. This range had in fact attracted the attention of the European Commission, which, in 2019, undertook an investigation into whether Amazon had violated European competition rules by using the nonpublic data of retailers selling on its platform to eventually gain an advantage over them by producing cheaper versions of their products, thus outperforming the competition. Perhaps, however, according to the sources cited by the financial newspaper, the decision to downsize private label brands would instead be due to disappointing sales of quite a number of the items. However, the incident may be read as a warning to all: it is not enough to be a retail giant to succeed in such a demanding market as that of private labels that requires years, if not decades, of working up to the expectations of the end customer. And yet, the mere low price is no longer enough for consumers: as you will read in the next pages, with no quality and innovation little progress can be made.

Maria Teresa Manuelli Editorial director

PLM - COVER STORY

Everything must change for everything to remain the same.

Innovation

as driver and need of

PRIVATE LABEL In the country of Giuseppe Tomasi di Lampedusa’s The leopard, rooted in traditions and with the relentlessly growing average age, there’s still something that strives for constant change: private labels.

n Italy, the ‘emancipation’ of PL products, from being depicted as a ‘sub-brand’ or a less valuable poor imitation of industrial brands, started in the mid 90s. “Private Labels had their first exploit with the mad cow disease, becoming the local cutting edge products of the organic industry - says Alberto Miraglia, General Director of Retail Institute Italy -. Today, private labels pivot on three main concepts: sustainability, attention to healthy eating and collectivization of benefits. This aspect, in particular, has been and will be discussed a lot in the future”. So, innovation is basically how each brand tries to meet, through private label products, one or all of these three criteria.

COVER STORY - PLM

u Todo cambia

At this moment, in Italy, super and hypermarkets are responding to a consumption picture that is changing profoundly and partly reversing course. Maura Latini, CEO at Coop Italia, explains that “Industrial brands have given away half of their shares in the last 15 year, discounters continue to grow, reaching 20% of the shares, and promotional purchases are starting to increase again.” Plus, according to a Nielsen report, promotions were the true criterion of choice for 65% of people, back in May 2021, with the war in Ukraine yet to come and before inflation stood, as of June 2022, at 8%.

PLM - COVER STORY

THE RELATIONSHIP WITH TERRITORIES, THE DRIVER OF ASSORTMENT IN CARREFOUR

“There’s innovation in the assortment, including more and more products in the store from local suppliers and regional typicalities - such as Carrefour with Terre d’Italia - that we now find in the stores”, remarks Miraglia. Our French company’s modus operandi is based on establishing close relationships with the production bodies of each territory, by demonstrating its ability to enhance the freshness and quality of the local market. This is true also on the company’s communication level; in October 2021, in fact, a market was organized in Milan in via Pagano for the ‘Il tuo (super) Mercato’ campaign, where the producers of Terre d’Italia and Filiere qualità brands gathered. And it was only at the end of the event, by the logo on the envelope that, with a great coup de théâtre, the customers found out the brands were Carrefour’s suppliers. This year, the Annecy company has launched more than 300 private label products, with more than 3 thousand total references. “The assortment expansion process will continue throughout 2022 and 2023 - explains Gilles Ballot, Merchandise, Marketing and E-commerce Director at Carrefour -. Everything is already set for the relaunch of the petfood assortment with the new Carrefour Companino brand and the launch of about 40 new products with Premium and natural/organic references. The new My Baby Food Bio range will land on shelves, with almost 20 products, by next October. Finally, we’ll launch new products for our segment from all over the world, Prodotti dal Mondo, with the Carrefour Sensation brand, above all for Tex-Mex and East-Asian cuisine”.

CARREFOUR 3000 references among all the brand ranges, 300 launched in 2022. Expected: 40 new products in premium and natural organic segments; 20 new entries in the new assortment ‘My Baby Food Bio’ until October 2022; New references for the ‘Prodotti dal mondo’ assortment.

COVER STORY - PLM

PAM 8 new Pam fish boat, to be added to the 10 previous ones. Of the total fish supplied, 46% is PL’s Fish: average market increase of 10.5%, +12.5% for Pam.

THE AGREEMENT WITH FISHERMEN: PAM’S ACE OF HEARTS FOR ITS PL FISH

Full traceability of products is another element on which retailers are increasingly focusing. Evidence of this is what Pam Panorama, the retailer that first introduced the service fish counter in its stores in the 1970s and began offering its own-branded fish in '99, is doing. Since then, its presence has progressively grown, thanks also to the agreements with sailors and shipowners. “We buy the fish first, thus getting the best quality fish. Prices are defined by the local fish market, and quality controls are done by fishermen, the Local Health Authority and us” states Luca Miliolaro, Fresh, Ultra-fresh and Frozen products Sales Executive at Pam Panorama. A supply chain started from the hard work of eight fishing boats in the High Adriatico Sea (sea with sandy bottoms, and shallow water but with great biodiversity). Moreover, as of summer 2021, 10 more fishing boats, working in the Tyrrhenian Sea, five in Livorno and five in Terracina have been added. Pam fish accounts for 46% of the total amount of the fish supplied. The product is selected, processed and preserved already on board and, thanks to this short process with optimized timing at each stage, in only 24h it goes from nets to distribution. “We’ve always paid lots of attention to the fish segment, it’s our flagship, and, in general, it represents one of the best growth rates among ultra-fresh products, with an average 10.5% market increase, which reaches 12.5%”. 7

PLM - COVER STORY

u Pastries for all: ‘intra-moenia’ and ‘extra-moenia’

Mixed blessing for passionate people and chefs, pastry is, together with that of fresh, the segment that has intrigued brands the most. This is why they have decided to rehearse for a possible future ‘big step’. To focus on the bakery in the broadest sense of the term ('everything you can bake') was certainly FinIper, which has even set its 2022 communication campaign on this asset inside its premises. But Unes and Esselunga went even further with the creation of their private labels ‘Viaggiator Goloso’ and ‘Elisenda’ (respectively): two now stand-alone brands, protagonists of single-brand temporary shops in some specific period of the year (Christmas and Easter).

u A great support

“Clearer and simpler labels would help consumers with solid food bases, but brands should also claim a stronger role in raising the awareness of more diverse groups of consumers” adds Alberto Miraglia. “The health and diet of citizens, together with a nutritional education that helps fight obesity, do not represent a cool claim, but, rather, a way of being of our member companies. These are companies truly part of the community they operate in, and, for this reason, they know and understand their needs” commented Giorgio Santambrogio, CEO at Gruppo Végé.

COVER STORY - PLM

COOP, THE PIONEER THAT DOESN’T REST ON ITS LAURELS

From the chronological point of view, Coop paved the way for the attention to the supply chain, as well as prompting organic production, even before leading brands. As matter of fact, with its 750 products, Fiorfiore offers the best culinary culture of Italy, and Vivi Verde - launched in 1999 - with almost 1,000 references, was the first organic brand sold in large-scale distribution in Italy. Now, the PL product share in the Casalecchio di Reno Cooperative accounts for about 30% of its supply, and 40% of the turnover of the food area comes from 100% traceable supply chains. In two years starting from May 2022, about 5,000 new and renewed products will arrive on the shelves, covering, in some cases, entire sectors once untargeted by private labels. “The new private label project is the result of so many suggestions and product ideas coming from employees and members,” explains Paolo Bonsignore, Marketing Director and Coop Italia PL Manager. For the Coop private label, established more than 70 years ago, innovation is a constant trait, made possible by the virtuous intertwining of the brand’s values, reception of the stimuli and inclusive initiatives. To mention a few: Piacere, Coop! - started on June 11- consists of a weekly tour of Coop's supplier companies and, before that, on May 19, Colazione da Coop, held at the store on Via Arona in Milan and also open to food expert journalists, food and wine critics, and influencers. The initiative was organized to show five Coop breakfast menus: the Italian; the Melting pot; the Fitness; the Exotic; the Natural. A pretext to present a revisited and wide supply of more than 500 products, 45% of which are new: coffee (57 variants), biscuits, yogurt (121 variants), vegetable drinks, teas, infusions. The goal is very ambitious: doubling the turnover of the PL products in the next four years, going from the current 3 billion to 6 billion euros. This means increasing the number of supplier companies: more than 250, mostly Italian and SMEs, will be added to the more than 500 "historic" ones, making Coop play the role of independent brand.

COOP Coop Pls are 70 years. PL product share is around 30% of the supply. 5,000 new products in 2 years since May 2022. Objective: going from a 3 to a 6 billion euro turnover.

PLM - COVER

LIDL ITALIA 2,800 PL references on the shelves (80% of the total). In 2012 Deluxe, a premium food line, was launched. April 2022: sport garments with fabric and coffee grounds for the Crivit line.

LIDL PL: FROM SAVING TO ECO-FRIENDLY

In the last few years, brands have moved from a positioning to a brand reputation strategy, also involving discounters. This has blurred the difference between discounters and non-discounters, with the exception of PLs present in the assortment. “ Today - underlines the Retail Institute Director - in every non-discounter store 40-50% of the decisions are taken onsite, not considering the reputation of the industrial brand”. Lidl Italia, which has almost 2,800 PL references on shelves (80% of the total) and in 2012 had already launched the Deluxe food brand for its Premium segment, in the first half of 2022, launched an important innovation in sportive clothes. “Since April - explains Alessia Bonifazi, Communication and Csr Manager at Lidl Italia - our Crivit brand enriched our assortment with a new range of garments, from woodies to shorts, made with an unusual ingredient: coffee grounds. Due to the low-temperature and energy-saving production, granted by the S.Café patent, what is left of the coffee grains is combined with yarns and turned into Recycled Claim Standard and Global Recycled Standard certified eco-friendly fabrics that absorb smells and protect the skin from UV rays.”

COVER - PLM

"Today, private labels pivot on three main concepts: sustainability, attention to healthy eating and collectivization of benefits. This aspect, in particular, has been and will be discussed a lot in the future."

PLM - COVER

IPER: QUALIT Y-SAVING SOLUTIONS THANKS TO THE INTERNAL PRODUCT - EXTERNAL PATENT LINE-UP

Iper - La grande “i” is also a duo of PL product - external patent line-up, which has started the production of spicy and aromatized salmon in its stores with the patented technology of the ‘Pesciugatore’, the professional plug-in that allows fish to grow at controlled temperatures and humidity. Salmons, handled by the Iper fish section employees, are filletted and deboned to obtain pieces of fish -called “baffe” in Italian- that, after a sort of massage, are aromatized, by passing into the ‘Pesciugatore’, a cabinet for Dry Age Fish, for seven days. Then, these pieces are cut into bars, slices or cubes and packaged. ‘Pesciugatore’ can already be found in Hyper stores (Varese, Seriate, Rubicone, Portello, Arese and Montebello) and the brand is working on further project developments.

IPER ‘Pesciugatore’ to preserve and aromatize the PL salmon. Plug-in in 6 sales points.

COVER - PLM

GROUP VÉGÉ: PL, THE GEM OF PARTNERSHIPS

There’s also who uses the key word ‘partnership’ to obtain the dual result of promoting its own PL and creating community support projects. “ This is true for Gruppo Végé, which, in May 2022, started a new collaboration with Decathlon in order to supply the equipments and technical clothing to amateur sportive Italian clubs (2,500, according to Végé estimates), with purchases in about 2,200 stores in Italy and in all the 136 Decathlon stores” explains Alberto Miraglia. Every 15 euros (and multiples), a QRcode will be imprinted on the receipt, but more than one code will be provided in case the list includes ‘speeding up products’ under the Ohi Vita brand (the healthy PL of the group) and under other partner industrial brands. This initiative will take place from 21 September to 11 December 2022 and, at the end, the sport clubs with the highest number of codes, will receive the prizes: digital gift cards worth 500 or 1,000 euros for purchases in Decathlon stores. Furthermore, when the gift cards are used in the Decathlon stores, the sport clubs will receive an additional 10% discount on the price lists.

GRUPPO VéGé 2,500 amateur sport clubs that the Group aims to support. 1 Qr code every receipt of 15 euro, more than one if with PL products. 500 or 1000 euro gift cards for the sports clubs. CONCLUSION

All the brands, therefore, are pursuing the same goal but everyone in their own way and with their own priorities and that’s when PL teaches us the exact opposite of ‘everything must change for everything to remain the same’ by Tomasi di Lampedusa: getting by...never! Evolving and breaking out of homologation...always!l

Maria Teresa Giannini, Professional Journalist specialized in Large-scale Distribution.

PLM - INTERVIEW …. FROM THE DISTRIBUTION’S POINT OF VIEW

THERE'S ALESSIA BONIFAZI, COMMUNICATION AND CSR MANAGER AT LIDL ITALIA, TO TALK WITH PL MAGAZINE.

INTERVIEW …. FROM THE DISTRIBUTION’S POINT OF VIEW - PLM

Lidl, and its highly

diversified private label Out of 100 products sold, 80 are exclusive brands. The supply also includes the non-food segments, such as that of personal care. Its crown jewel? ‘Italiamo’. For discounters, private labels are obviously a flagship, as well as, their best specialty. What’s happening in the over 700 national Lidl stores, soon to become 1,000, according to the 2030 Industrial Plan? We talked about it with Alessia Bonifazi, Communication and Csr Manager at Lidl Italia. How many exclusive brands does your assortment count? What are their main features? Today, our assortment is composed of over 3,500 references, more than 80% of which are made in Italy. Our brands embrace all industries. To name a few, our ‘Cien’ line, thought for your personal care and beauty routine, the ‘Lupilu’ line for baby care, with both food and daily care products; not to mention ‘Italiamo’ the crown jewel of our Italian supply, which combines love and passion for the tradition and heritage of the flavors of our Country (Italy). Within this line, for example, you can find authentic excellencies, such as Gragnano PGI pasta, mozzarella di bufala PDO or Caciocavallo Silano. Among the food premium lines, ‘Deluxe’ stands out. On sale at Christmas and Easter, Deluxe boasts a number of PGI, Docg and PDO references of different regional Italian typicalities. Among our new products, I’d like to also mention ‘Vemondo’, the new vegan/vegetarian and zero-emission range, particularly popular with our clients due to its taste and neutral impact on the Planet.

PLM - INTERVIEW …. FROM THE DISTRIBUTION’S POINT OF VIEW

How much do you value industrial brands? Right now, our producer’s brands account for about 20% of our assortment. The products of the Brand Industry, which enrich our assortment, are carefully selected in order to complete and complement our PL supply. Lidl is attentive to solidity both in terms of business and human relationships. What can you tell us about your collaborators and suppliers? Lidl Italia has always paid lots of attention not only to the general wellbeing of its own employees, but also to human rights, throughout the whole supply chain. As proof of our commitment, for the sixth year in a row, we were awarded the renowned Top Employer. This is a prize given after an in-depth analysis and a rigorous assessment process, by the Top Employers Institute, international certification body of HR excellencies. But there’s more: for 2022, the company was included among the ‘Top Employers Italia’ and, given the same national award in over 5 European countries, was also included in ‘Top Employers Europe’, confirming its presence in both the categories. Let’s speak about product sustainability... For us, in Lidl, sustainability is part of the promise of quality that we make every day to our clients. In the spirit of constant evolution and innovation, Lidl periodically introduces new sustainable references in different product categories. One of the most recent, for example, concerns food. In fact, we have expanded the neutral-climate product range, introducing items whose CO2 emissions are offset thanks to climate and environmental protection projects. In particular, as I said before, Lidl Italia has always implemented a new vegan and vegetarian private label. In fact, with a positive impact on biodiversity and protection of natural resources, Vemondo represents a valid alternative.

SCHWARZ GROUP and LIDL INTERNATIONAL Consolidated turnover Gruppo Schwarz 2021 (billion euros)

2021 Lidl Turnover (billion euros)

Investments

Total employees

(billion euros)

(Schwarz Group)

> 550,000 Total PoS (including Kaufland)

13,300

Source: company’s data

100.8 (+4.7%)

133.6(+6.6%)

INTERVIEW …. FROM THE DISTRIBUTION’S POINT OF VIEW - PLM

2021 Turnover Distribution centers

11 Regional Management

Source: company’s data

(billion euros)

5.9

Lidl Italia

Total Employees

> 20,000

Date of birth

1992 Total PoS

> 700 Total references

Private Label share (%)

3,500

> 80 We aim to develop an assortment increasingly focused on the territory and on sustainability, also by creating specific projects. The collaboration started in 2018 with Filiera Agricola Italiana is certainly an example, thanks to which we introduced Fdai products, approved by Italian farmers, to our shelves. What are your best sellers? All our PLs are well appreciated and loved, but if I have to pick one in particular, I’d say ‘Italiamo’ with no doubts, because it fully represents the journey of quality and italianity we’ve embarked on. Let’s mention some new products that you’re going to introduce in the following months. What can you tell us about innovation and new launches? For several years now, Lidl has interpreted its role as retailer in a much wider sense than the traditional one, and this is the reason why we’re putting our innovative soul into projects and initiatives that go beyond the product and the commercial aim alone. Speaking of which, one of the main innovations launched in 2021 was surely PreZero, the first line of home-care products made with 100% recycled plastic, which gave a ‘second life’ to 1,782 tons of plastic waste. This line consolidates Lidl’s already strong commitment to its plastic strategy too, well represented by the REset Plastic programme. With this programme, the company aims to achieve an average of 20 percent recycled material in its PL plastic packaging by the end of 2025, as well as eliminating black plastic in its own-brand packaging by the end of 2021.l

Luca Salomone Professional Journalist specialized in Consumer Goods, Distribution, Shopping Centres and Finance. 17

PLM - ON-THE-FIELD EXPERIENCES

New economy

discovers private labels Never before has e-commerce and delivery been so strong. Gorillas gave it a first try on a large scale. But even this time, it’s Amazon making history. by Luca Salomone

rivate labels do not always mean large-scale distribution and great experts, as the recent case of Gorillas shows. As of June 9, the Berlin-based quick commerce platform, now leaving the 'non-strategic' markets, such as Italy and Belgium, has made its way into the PL world with four lines: Gorillas daily, for everyday groceries; Gorillas premium, for specialties; Hot damn, coffee bar; and two craft 'Start-up beers,' a Bavarian helles and a Pale Ale. In total, this makes for about fifty references covering 11 of the most popular categories in FMCG, destined to Germany, France, Great Britain and the Netherlands. To name a few, the assortment includes dry and fresh pasta, pesto and other seasonings,

PLM - ON-THE-FIELD EXPERIENCES

buffalo mozzarella and burrata, packaged cold cuts, and sweet and savory ready-to-eat snacks. “Since the very beginning in 2020, we had plans to create our own brands – said Kagan Sumer, Founder and CEO –. This is absolutely essential to generate more profits and further consolidate in our key countries”. However, The true PL giant in the new economy is, needless to say, Amazon. We hear about it a lot, but official figures are very scarce. In April 2022 the independent Canadian website Emomcrew. com did the count, cross-referencing surveys on Amazon sites, figures made available by Statista and documentary sources. According to Emomcrew, the U.S. group's PL program, which started in 2005 and was consolidated in 2009, it reached 45 brands by 2019 and grew steadily, mainly due to Amazon basics. The total references were 158 thousand - 243 thousand in 2020, according to the Wall Street Journal -, with a clear predominance of Amazon basics (57.8%%) and thus of household goods and electronics. Second ranked the aggregate 'other brands' (19%), third was Amazon collection ( jewelry) with 7.8% and the umbrella brand of men's and women's clothing Amazon essentials (4.7%). The average price two years ago was affordable in 49.3% of cases, that is to say within an average of $20.

PLM -- THE PRIVATE LABEL SCENARIO

What are the most searched PL products of large-scale distribution online?

The online research report carried out by ARvis.it - a digital agency specialized in digital communication and online visibility strategies provides interesting insights into the large-scale distribution market in this particular digitization moment.

THE PRIVATE LABEL SCENARIO - PLM

L and large-scale distribution: a winning combination. As a matter of fact, data from online searches show that store-brand products are at the core of users' queries. But what are the most searched PL products of large scale- distribution online? What does this data mean from a strategic point of view? It is no wonder that PLs are catalysts for online searches. After all, these are the products that bear the very company name, for which the brand risks its reputation. In order to understand how to best guide strategic flyer and communication choices, online search data is the ideal tool. Through its analysis, in fact, their value consumers’ minds, their seasonality and their trends are understood.

GROCERY SHOPPING IS A CLICK All professionals in large-scale distribution should be interested in the online world that revolves around physical stores. This is particularly true at this time when shopping has turned to the Internet, with e-commerce and online shopping apps in large-scale distribution increasingly at the center of consumer habits. Brands are highly searched online as the chart below shows.

THE PRIVATE LABEL SCENARIO - PLM

But it is mainly PL products that are the number one focus for large-scale distributors. Also due to the fact that the major offers and promotions are built around them. Just think of Conad's "Prezzi basse e fissi" (‘low and fixed prices’) or Selex's ‘Spesa difesa’ (‘defense spending’). PL lines are the brands’ hallmark and quite often the discriminating factor in customer loyalty. Therefore, brands have to ensure the right mix of quality and convenience to win the minds and habits of consumers. Here is where data from online searches on PL provide important insights into how and to which extent brands are targeting these products, as well as, how the public is taking that.

ESSELUNGA FOCUSES ON BRAND, OTHER BRANDS ON PRODUCT LINES Esselunga dominates the ‘products + brand’ queries: the average monthly search for ‘Esselunga products’ over the last two years is 4,059 queries. Second ranks ‘Coop products,’ which surpasses ‘Conad products.’ For manufacturer-branded products in online searches, there is no real race: Esselunga outperforms all other brands. Just think that the highest peak for ‘Esselunga products’ search was 11,000 queries in April 2022, while the second position went to "Conad products" with 8,300. On average, ‘Esselunga products’ recorded an average monthly volume of 4,095 queries in the last twenty-four months, while ‘Conad products,’ also ranking second, settling at 2,097.

Looking at the trend of broader searches, it can be seen that after the peak in April 2020, the search key ‘Conad products’ was overtaken by "Coop products" and, for some peaks, even by ‘Selex products,’ in February 2021 and February 2022. Apparently, the difference lies in the way brands use PLs within their chains. While for Esselunga they are always linked to the retailer's brand, regardless of the product itself, the other chains seem to focus more on specific lines by pushing the brand itself. Esselunga is thus sought out and chosen for its PL while other brands are specifically chosen for the distributor's individual product brand.

PLM - THE PRIVATE LABEL SCENARIO

RANKING OF THE MOST SEARCHED PL PRODUCTS ONLINE Separate analysis of online searches for brands and their products clarifies this detail. Let's start with the overall ranking of the most searched PL products online by comparing the average values of the last 2 years:

Following are the PL products for each brand and the trends in web searches, once again over the past 2 years.

CONAD PL: STEADY GROWTH SINCE 2020 The brand that has expanded the most in the past two years when it comes to PL products is definitely Conad. On the one hand, thanks to the launch of new lines, such as the ‘11 paralleli’ beer, and the strategic vision of focusing on its own products to outperform the competition; and on the other hand, with the expansion of the whole Conad group, which has also acquired other large-scale distribution chains, growing both in terms of turnover and sales points. This explains the dramatic upsurge in online search intent queries for Conad-branded products at the expense of Coop. In April and May 2020, in fact, search intent queries for Conad branded products were just over 5,000, while those for Coop PLs exceeded 6,000. Since June there has been an upswing in searches related to Conad PLs, with a peak in November 2020 with as many as 12,180 queries. The average search volume has also grown, settling at an average of 8,155 monthly searches in the past 24 months. Speaking of specific products, the aforementioned ‘11 paralleli’ beers reached a record peak of 5,670 queries in August 2020, in the very first months of its launch, and then lowered - although remaining high compared to other competing PLs of alcoholic products. Conad's most searched PL products thus turn out to be ‘Sapori & Dintorni,’ which, after a drop in the summer of 2020, has seen its online search grow steadily. A trend that continues in 2022, with the new peak reached just in March: 4,830 queries.

THE PRIVATE LABEL SCENARIO - PLM

Those that thrive on sharp peaks and rapid declines are the ‘Piacersi’ and the ‘Verso Natura’ lines. The former, with on average 500 monthly searches, exceeded 4,000 queries in November 2020 and May 2021. The second, slightly more searched on average but still under 1,000 queries, recorded as many as 4,040 queries in November 2021.

PL COOP: A NEW GROWTH AFTER THE DOWNTURN? As stated, Coop-branded products have lost the number two spot on the podium in this particular ranking since the summer of 2020. While there were 6,680 queries with search intent on Coop PLs in April, there were 4,170 in June, which dropped to 3,680 in August in the same year. After an upswing between winter 2020 and spring 2021, with the new peak of 7,850 queries in March 2021, there was a new downward trend again in the summer period. In June 2021, the record low 3,420 queries was reached, and, in general, in the entire summer three-month period, searches never exceeded 3,500. However, the year 2022 seemed to be starting on a good note for Coop-branded products. In the first quarter, searches increased by nearly 2,000, going from 4,130 in January to 5,870 in March. Coop PLs are driven mainly by the ‘Fior fiore Coop’ line. The performance of searches for these specific products determines most of the search volume for Coop-branded products. The peaks in the last two years, as well as the upswing in the first quarter of 2022, of queries that have Coop PLs as their search intent, can actually be traced back to searches on the products of ‘Fior fiore’.

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THE PRIVATE LABEL SCENARIO - PLM

Of the 7,250 queries in December 2020, nearly 5,000 were in fact generated by this line. Of the 7,850 in March 2021, more than half belong to ‘Fior fiore’ products. Overall, ‘Fior fiore’ PLs have recorded an average monthly search volume of 2,271 queries in the past twenty-four months, proving to be a flagship for the brand. The second most searched PL product online for Coop is ‘Vivi verde’. This line has recorded an average monthly search volume of 1,022 queries over the past two years, and 2022 began with a growing trend in the first quarter.

SIMILAR TRENDS FOR ESSELUNGA PL AND IPER LA GRANDE i PL Two brands with similar search volumes for their branded products compete for the third spot on the podium. Esselunga and Iper La grande i, in fact, have recorded an average search volume of 1,457 and 1,435 queries, respectively, in the last two years. Search trends are steady for both chains, with Iper showing major peaks in December. In both 2020 and 2021, in fact, queries with search intent related to Iper PLs exceeded 2,000. This is mainly due to the ‘Terre d'Italia’ line: of the 3,020 searches in December 2020, as many as 2,400 came from these products. Less sought after is the line of wines under Iper: ‘Grandi Vigne,’ in fact, has an average search volume of 111 monthly queries, peaking at 240 queries in October 2021. However, among Esselunga PLs, what stands out is the product line ‘Equilibrio’. Its average search volume is 390 monthly queries, with a peak of 750 recorded in June 2020.

PLM - THE PRIVATE LABEL SCENARIO

NATURE AND ORGANIC ARE THE ASSETS OF SELEX, CARREFOUR AND PAM PLs Despite significantly different as well as lower search volumes than the other brands, Selex, Carrefour, and the Pam-Panorama Group have turned organic into the benchmark of their PLs. In fact, when analyzing online searches for the PL products of these chains, organic and natural products are the ones that generate the greatest traffic volume. Among the three brands, Selex is the most interesting with PL-related searches averaging over 800 monthly queries over the past 24 months. Standing out from the rest is the ‘Natura chiama’ line in November 2021 and its peak of over 900 online searches. On average, however, it is the products of ‘Le vie dell'uva’ that records the largest number of searches, with an average volume of 306 queries and major surges during the Christmas and Easter holiday months. But ‘Carrefour bio’ is the leading line of Carrefour PLs. The average monthly search volume for all Carrefour branded products - over 20 - is 568 queries. Almost half of the searches come from the organic line, with the keyword ‘Carrefour bio’ and an average search volume of 204 queries. As for Pam, it is the ‘Arkalia’ line of cosmetics, and especially its organic variant, that leads user searches on the web. Particularly in spring, search intent related to ‘Arkalia bio’ registered major surges: April 2020 and 2021 recorded 170 searches, and the surge in March 2022 is likely to go in that direction. In general, Pam-branded products have had an average search volume of 257 monthly queries over the past two years, and just April 2021 reached a peak with 410 searches.

THE STRANGE CASE OF SELEX AND FAMILA Speaking of Selex, on the Internet the brand seems to live a double life. Searches related to the Selex Group have averaged 5,637 monthly queries over the past twenty-four months, and only once did they come close to 10,000, when they hit 9,900 in February 2022. Standing out from the rest of the Group is the Famila brand, whose average monthly searches are 107,354. 28

THE PRIVATE LABEL SCENARIO - PLM

On the other hand, if the search key is that of products + brand, it is the Group that gets the largest volume. The search intent ‘Selex products’ in fact, has had an average of 1,532 monthly queries over the past two years, while ‘Famila products’ settled at 481. This brings to light one consideration: while the brand name itself is more searched as an absolute keyword, probably because it is linked to the physical store where people shop, PL products are linked to the Group. For PLs, belonging to the Group is an added value, regardless of the brand under which they are distributed.

KEVLER PLUS BY BENNET: TECHNOLOGY IN PLs Usually when thinking of large-scale distribution products, the thought goes to groceries and household products. It is surprising, then, to see that for Bennet the most searched PL is Kevler Plus, a Bluetooth speaker for playing music content. The absolute keyword ‘kevler plus’ has recorded an average search volume of 251 queries over the last 24 months and reached 480 searches as of December 2020. A true flagship product considering that Bennet PLs elicit an average search interest of slightly over 360 queries.

PLM - THE PRIVATE LABEL SCENARIO

SUN KISS BY DESPAR, PL FOR THE SUMMER MONTHS Speaking of PLs beyond the food sector, Despar's Sun Kiss sunscreen is the most searched PL product of the Dutch cooperative. Being a sunscreen, its search normally peaks in August. In fact, both in 2020 and 2021, there were 2,400 online queries. This value is much more understandable when compared to the second most searched Despar-branded product line, namely S-Budget. The peak for this PL is 320 queries, reached in April and August 2021. Overall, the search keyword ‘Despar products’ has recorded an average monthly search volume of 395 queries in the last two years. The average of the absolute keyword ‘Despar,’ on the other hand, is 76,854 monthly queries, with its peak of 165,000 reached in August 2021.

DECÒ BETS ON GLUTEN-FREE Among the brands surveyed, Decò has the lowest number of searches when it comes to its PL products. Decò PL average search volume is slightly over 50 monthly queries. What stands out however is definitely its ‘gluten-free’ line, which recorded an average of almost 30 monthly searches and reached peaks of 50 queries in August and September 2021. In this ranking the PL ‘Il Viaggiator Goloso’, leader and outsider of all rankings, has been deliberately left out. This PL product, in fact, is a sort of independent brand, more searched and known than the very brand to which it belongs, Unes.

IL VIAGGIATOR GOLOSO DOMINATES ONLINE SEARCHES ‘Il Viaggiator Goloso’ is the most searched PL product with an average of 22,746 monthly queries over the past 24 months. When it comes to PL in online searches, there is no contest: ‘Il Viaggiator Goloso’ tops all the charts. Not only does it have the largest average monthly search volume, averaging nearly 23,000 queries over the past 24 months, but it is also the PL product with the highest absolute peaks. In December 2020, queries with search intent ‘Il Viaggiator Goloso’ exceeded 50,000, while in the same month of the following year they reached nearly 60,000 searches, settling at 58,400. December is thus confirmed as the month with the most searches, with ‘Il Viaggiator Goloso’ products for the Christmas holidays being highly searched. In terms of trends, the spring months that include the Easter holiday also show major upswings in search volume. In 2021, for example, it went from just over 20,000 searches in March to over 37,000 queries in May. And even in 2022 from March, a surge in search traffic was observed. Here below are the averages of the most searched PL products compared, leaving out ‘Il Viaggiator Goloso’ on the left, or by including it in the comparison on the right.

THE PRIVATE LABEL SCENARIO - PLM

ALL PL PRODUCT QUERIES FOR EACH BRAND Finally, let's take a look at how the various brands behave when the queries are for all their PL products with the specific brand names themselves summed into a single trend. When summing, for example, the searches for ‘Sapori e dintorni’ with ‘11 paralleli’ with ‘Piacersi’ and the other Conad PLs and then doing the same for Coop and so on for each PL, the result is the trends of all the PL products of the various distributors compared. Here's who wins:

PL FOR CUSTOMER LOYALTY PL products are a very important asset of large-scale distribution and online searches do confirm that. Often, brands try to stand out with seasonal products, such as those linked to the holidays, or lines related to sustainability and organic. Sometimes they seek maximum verticalization with specific products, such as beer or wine. In all cases, the most interesting fact that emerges is that PL products are a real strength in customer loyalty, loyalty that takes the form of absolute trust in the products offered by the retailer: trust for quality, trust for the best price, trust for the brand.l 31

PLM - FROM THE POINT OF VIEW OF THE INDUSTRY

IT’S NOW ENRICO CECCHI, SALES AND MARKETING DIRECTOR AT NT FOOD WITH PL MAGAZINE.

FROM THE POINT OF VIEW OF THE INDUSTRY - PLM

NT Food and the challenge of making

‘gluten-free’ more colorful and enjoyable The company, where PL accounts for about 20% of its output, was founded to sense emerging nutritional needs, specializing first in organic and then, in the 2000s, in food intolerances and alternative dietary regimens. by Maria Teresa Giannini

Over 28 thousand pieces in one year, for a 2021 turnover of 33 million euros and more than 170 people employed in its factories: this is the ID of NT Food, which has been producing food for special nutritional needs since 1989. Indeed, the company has three factories in Altopascio, a Tuscan town 20 km from Lucca, known for its ovens since the Middle Ages. The company, where PL accounts for about 20%of its output, boasts contracts with a number of Italian and foreign brands working in the Belpaese (Coop, Conad, Carrefour, Despar, Lidl, Pam, to name the major). NT Food aims to make its ‘free-from’ products look colorful and tasty, standing out from the mainstream; products that have nothing less than the other but rather stand-alone. We talked about it with Enrico Cecchi, Sales and Marketing Director at NT Food. Since late July 2022, the company has been part of Morato, an international group in the industrial bakery industry, which acquired a majority stake. NT stands for ‘Nuova Terra,’ (New Earth) and in the beginning - 33 years ago - it dealt with blends of legumes and organic grains. Only later did the gluten-free adventure begin: Was Law. 123/2005 your ‘epiphany’? Nuova Terra was founded with a mission to interpret emerging nutritional needs, specializing first in organic and then, in the 2000s, in food intolerances and alternative dietary regimens. In 2007, we started to specialize in gluten-free products, and Law 123, designed to facilitate the social inclusion of people with celiac disease, was undoubtedly one of the factors that gave a boost to this sector.

PLM - FROM THE POINT OF VIEW OF THE INDUSTRY

Established in 1989, Altopascio (Lu)

Production: more than

thousand

pieces in one year

Turnover: 2021 amounting to

Employees: more than

million euros

people in 3 plants

170

20% of production is for PL

Today, gluten-free products have greatly improved their taste by approaching gluten-based products. How can you do that from a chemical point of view? In making baked gluten-free products, you start with flours such as rice or corn flours, which by their nature are ‘weak’, in other words, much less capable of adding structure and elasticity to the dough, which are characteristics usually provided by gluten. Therefore, to ‘simulate’ the effect of gluten, they are processed with thickeners of vegetable origin, such as guar or xanthan. In the past, the ‘binding’ elements added were eggs or milk. But our number one commitment was precisely to minimize allergens, by simplifying recipes and adding noble ingredients of our Mediterranean tradition, such as extra virgin olive oil. Thirty years ago, celiac disease was considered a rare and rather disabling condition from a nutritional point of view, for example, in terms of quantity and quality of foods. Luckily, today, it’s much easier... The new generations want gluten-free products to taste similar to ‘conventional’ products and to normalize gluten-free consumption. R&D efforts are focusing especially on their desires, seeking new tastes for snacks and bread substitutes. NT Food offers the Nutrifree Food&Club range, a street food line designed to meet the needs of conviviality, immediate consumption and self-gratification. In addition to burgers, also available in a 110-gram version, and hot dogs, now you can also find the classic American sandwich and the Focaccia Break.

INTERVISTA... DALLA PARTE DELLA PLM FROM THE POINT OF VIEW OFDISTRIBUZIONE THE INDUSTRY -- PLM

What is more, we are constantly trying to fill market gaps, as in the case of the croissants ‘Nutrifree Cornetti’. Soft and fragrant, with a delicate buttery aroma and now available in 4 variants (classic, berry, apricot and chocolate), they are a real revolution when it comes to free-from food. At Marca 2022 in Bologna, you mentioned a new line of cookies that you would be launching shortly after. How is that going in terms of numbers and trends? These cookies are gluten-free and lactose-free, made from selected whole grain flours that have functional ingredients such as buckwheat, hulled oatmeal, brown rice, sorghum and sprouted lentil flakes. And they are also available in 4 variants: ‘Infiniti’, ‘Buoni Veri’, ‘Buoni Veri’ with chocolate chips, and ‘Insieme +’. They have just been launched in the targeted channel (pharmacies and specialized stores). At the same time, we’re introducing them in large-scale retail. So far, the first feedback we’ve received in terms of trading is really positive. What new product and service innovations are cooking? Above all, our new brand identity. We are working on a repositioning that will enhance this special soul of NT Food. The new claim ‘Smile, it's Nutrifree’ will tell of the colorful and tasty ‘free-from’ world, a world where you can feel welcomed, understood, protected, and the future leitmotif of the new communication campaign. The new packaging will display information in a clear and simple way, and will tell the story of the ingredients and their properties. In particular, the line with whole-grain flours, a 100% cross-category assortment (flours, cookies, snacks, breads, cereals, rusks), will be addressed to an informed customer base attentive to the consumption of fiber, which is particularly useful in gluten-free diet for keeping the glycemic index under control.l 35

PLM - MARKETS

The ever persuasive healthy world now

even for PLs The references of the health category continued to score positive results in 2021, despite the divergent trends.

he consumer’s growing attention to healthy eating compared to the past, is a fact. The months during the Covid-19 pandemic have surely accelerated this trend, and pushed large-scale distribution brands to enrich their healthy product assortment on the shelf, also under PLs. According to the 11th edition of Osservatorio Immagino of Gs1 Italy, the references of the health and wellbeing category in 2021 continued to score positive results, despite the divergent trends among the different categories. Within the macro category ‘free-from’, for example, sugar free or low-sugar references recorded great performances (over +10%), just like antibiotic-free (+5.6%) and low calories (+10.9%). On the other hand, preservative-free and low fat segments were considerably less impressive (-1.3% and -0.1% respectively). In the ‘rich in’ category, instead, rich-in protein products (+6.4%) and ‘rich in fiber’ (+3.7%) standed out, while rich-in iron and iodium recorded negative trends.

The best performing references in the 'free- from' category are free from or low in sugar (over +10%), antibiotic-free (+5.6%) and low in calories (+10.9%)

MARKETS

- PLM

MARKETS

- PLM

FRESH HEALTHY PRODUCTS HAVE THE EDGE OVER THE OTHERS Last year, also according to Pasquale Nicastro, Purchasing Manager at Penny, the whole healthy world recorded positive trends although at different paces: “The most growing segments were those of bread, yogurt and meat and milk substitutes, which showed double digit numbers and which are now confirming the same trend in 2022. Generally, healthy products in the fresh assortment are responding better than those in the dry categories.” In 2021, Penny’s assortment had lots of healthy references. “Today, most of this supply is under the Welles brand which - explains Pasquale Nicastro - doesn’t cover the ‘free from’, and the organic segment and covers only partially that of dry fruit. Focusing on the development of ‘rich in’ proteins/fibers/minerals or sugar/salt/fats less, it’s cross-sectional among all the assortment. Furthermore, we’re also working with external bodies to make functional products that could meet the needs of those customer segments who increasingly look to nutrition as the primary support for their health.”

In Penny sales points, healthy products in the PL fresh assortment are responding better than those in the dry categories. 39

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MARKETS

- PLM

A GROWING NUMBER OF ASSORTMENTS TO MEET CUSTOMERS’ NEEDS To meet its client’s needs, more and more attentive to healthy eating, special emphasis to healthy products has been paid by Ard Discount, an expanding chain with almost 210 sales points among Sicily, Calabria, Apulia and Basilicata. “For us, healthy products have been a precise choice, as the request came directly from our clients - affirms Marco Sgarioto, CEO at Ergon - but also because we believe in a tasty and healthy diet. That’s why we choose suppliers attentive to these aspects. So, we thought of PL products that can satisfy everyone, by aiming at organic, gluten-free and vegan references.” With ‘Buono e Gusto’, the brand tried to conceive a product line able to promote a healthy and conscious life-style, without giving up on the pleasure of eating. “We’ve got 75 organic, 29 gluten-free, and 34 vegan references – continues Marco Sgarioto - which we combined with several lactose-free products: spun paste, cream, milk, sliced cheese and sliced spun paste. And soon we’ll also introduce butter, mozzarella, and drinkable yogurt for milk intolerants.”

Ard Discount brand has already got 75 organic, 29 gluten-free, and 34 vegan PL references, plus several lactose-free products.

MARKETS

- PLM

FOR EVERY TYPE OF DIET, BUT WITH QUALITY Among the 17 PL lines of Despar Italia - for a total assortment of over 3,400 references - there are also three brands specialized in wellbeing. “In our supply, we also include all the products that meet the different diet needs - says Michela Cocchi, PL Development Brand Manager at Despar Italia - from vegan to ‘free-from’, up to healthy products. The common denominator at the basis of all these products is our commitment to quality, by respecting the wellbeing and health of our customers.” Despar Veggie, for example, provides a range of vegan and vegetarian products, mainly from certified organic agriculture. “Despar Vital is our healthy and functional line - continues Michela Cocchi - while Despar Free From is addressed to lactose, gluten and yeast intolerants. Moreover, our gluten-free products are certified by the Spiga Barrata - Associazione Italiana Celiachia, the Italian Association of Celiac Disease. Last year, this category performed very well, with +4% of sell-in”.l

In 2021, Despar gluten-free products certified by the Italian Association of Celiac Disease performed very well, with +4%.

Fabio Massi, Journalist specialized in Retail and Mass market issues.

PLM - QBERG OBSERVATORY

'Free-from' products are increasingly CONSOLIDATED QBerg analyzes PL trends in the free-from category on the Flyers and Online in 2022.

Berg, Italian Research Institute, leader in price intelligence services and analysis of cross channel assortment strategies (flyers, physical stores, e-commerce and newsletters), has analyzed the PL trend in the free-from category on promotional flyers and e-commerce large scale distribution websites. The period analyzed was January-May 2022 vs. the same period in 2021, with focus on ‘lactose-free’ and ‘gluten-free’.

QBERG OBSERVATORY - PLM

The comparison between the Qp4 share on flyers calculated on the total number of flyers of Hypermarkets, Supermarkets and Superettes and the display share calculated on e-commerce websites (including Amazon Fresh), pictures a consolidated category. In detail, the Lactose-free product supply, especially on flyers, is growing, with +0.04 p.p. and Gluten-free with +0.03 p.p. This trend may appear irrelevant, but note that among the 404 Lcc Subcategories on flyers and e-commerce, more than a half have a visibility share of 0.1% and over 100 are below 0.03%. In other words, this segment on flyers seems to have swallowed entire product subcategories. Another interesting point is that the Lactose-free supply is more prevalent on Flyers compared to that of Gluten-free, while for e-commerce websites it is exactly the opposite. The Qp4 Share of IRI-QBerg is a great sales predictor. In fact, not only does it represent product visibility (brand, producer, category) on the promotional flyer - essential driver for sales - but also a real prediction of customers' accessibility. The specularity in terms of general visibility emerged between the Flyer and the WEB is clear also when considering the PL visibility share for lactose-free and Gluten-free segments and its variation year on year. In fact, a great increase both for Lactose-free and Gluten-free also on flyers (+1.94 p.p. and 2.64 p.p. respectively) can be noticed. On the web, we’re facing an even more decisive contraction with lactose-free losing 2.58 p.p., and Gluten-free even 2.91 p.p.

PLM - QBERG OBSERVATORY

Let’s now see in detail the Subcategories, starting from the Lactose-free segment. The two graphs below show the Subcategories where the PL is more important. As for the Flyer, there are as many as 8 cases that see PL exceeding 20%, while for the Web there are 6, with Sliced cheese in which over half of its assortment is made up of PL. Still on the Flyer, great increases in Sliced Melted Cheese, Cheese/Fondue and Mascarpone. Looking at the Web, on the other hand, an important decrease is in PL visibility when it comes to Butter and functional Yogurt.

QBERG OBSERVATORY - PLM

Moving on to Gluten-free, as for the Flyer, there are even 10 subcategories where PL exceeds 20%; for the Web, - which better reflects the assortment of physical stores, since it’s an excellent ‘proxy’ - there are only 4. On the Flyer, Snacks, Ready-to-eat Cakes, Sandwiches and Cereal for breakfast emerge, while Online, Sandwiches and Breadsticks of PL are strong. In terms of variations, on the Flyer, Ready-to-eat Cakes and Flours stand out, while on the Web it’s Sandwiches. The most relevant contractions are on the Flyer for Breadcrumbs, and on the Web for Breadsticks, Snacks and once again Breadcrumbs. In the two graphs below, all the subcategories considered in the analysis.l

Fabrizio Pavone Marketing Manager and Business Development of QBergg 47