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Presented by the Private Label
Manufacturers Association
International Council




INDUSTRY NEWS

 * Newsletter
 * Private Label Today
 * Consumer Survey


Judith Kolenburg gives highlights on how retail media plays pivotal role in
advertising. On his side, Hans Kraak examines how companies are incorporating
true pricing into their business models. Watch video here.

 

 


Egbert J. Sonneveld, co-owner of Blonk Quality Ingredients, discusses how
retailers and manufacturers can capitalize on the rising opportunity in regards
to teff.
Watch video here.

 

 




PLMA E-SCANNER – OCTOBER 2023

October, 2023
In the StoresMarket ResearchPLMA NewsEvents
Brexit border checks are back!

Great Britain has once again, for the fifth time, pushed back the date on which
border controls on EU food imports will be introduced. Instead of in October,
the introduction of health certification on imports of medium risk animal
products, plants, plant products and high-risk food (and feed) of non-animal
origin from the EU will start on 31 January 2024.

In addition, the documentation and risk-based identity and physical checks on
medium-risk animal products, plants, plant products and high-risk food (and
feed) of non-animal origin from the EU will be moved from January to April 2024.

The industry is trying to convince the British government to rethink the plans
for the requirements that are part of the Northern Ireland post-Brexit
agreement. From October, British businesses exporting to Northern Ireland are
required to label their products ‘Not for EU’. This should avoid them becoming
part of EU checks. At the same time, for manufacturers abroad, the rule would
mean they would need to separate their products into two streams, one with
packaging for the UK and one with packaging for the EU.

The additional costs for manufacturers to comply with all of the new rules would
mean price increases for consumers which is unwanted in this time of inflation,
says the industry.

Despite declines, experts say plant based is here to stay

Some reports claim that interest in the plant-based market is declining, and,
sure enough, pioneers like Beyond Meat or Oatly’s have seen shares drop. But
others very much disagree and claim the downturns are situational and don’t
reflect the wider landscape.

In fact, newly published data claims the vegan food category as a whole is
growing. A market insight report by Good Food Institute (GFI) and NielsenIQ
looked at data from 13 countries and found that retail sales of plant-based
foods in Europe increased by 6% in 2022 and 21% since 2020.

The number of vegans, vegetarians, and flexitarians would be on the rise, says
another report, especially among young generations who are the consumers of the
future. And Mintel analysts forecast that the market could grow to $160 billion
by 2030. It says that plant-based is now a lifestyle choice, and it’s here to
stay.

It is undeniable that in these inflationary times, many consumers are on a tight
budget and cannot afford expensive plant-based meat alternatives. However, on
the long-term, these temporary drop-offs would come back. Another factor is the
amount of brands available on the plant-based shelves. Some argue that too many
companies have jumped into the fast growing category and have forgone on the
composition, texture and above all, taste of their new products.

Inevitably, we will see consolidation in plant-based, with fewer brands and
fewer products in retailers’ offering to the consumer.

Holland & Barrett refocusing on food

Health and wellness retailer Holland & Barrett is conducting a major overhaul of
its food offer and has – as a first step - introduced 500 new grocery lines in
the stores; 300 new own label lines and 200 new branded lines. With the move,
the retailer is returning to the core of its business when it was founded 150
years ago: a grocer.

Two years of work was put into the food transformation, 800 grocery lines were
delisted, and fifty new own label suppliers were brought in. Over the next year,
the retailer is planning two more waves of new product launches.

Margins are top concern for retailers

In 2022, retailer margins have fallen sharply while the need to invest is
increasing. No wonder that the latest McKinsey survey among European retail
executives reveals that the vast majority (90%) thinks that pressure on margins
is the most important trend for the supermarket sector in the coming year.
Number two and three trend, in their opinion, are sustainability and retaining
and attracting talent.

If price increases are not taken into account, turnover at European supermarkets
fell by 7.1 percent last year. Nevertheless, supermarkets did not pass on all
cost increases to customers. Last year, margins at supermarkets were the lowest
in five years and the situation in the market has not become easier since then.
The pressure on margins continues, but at the same time supermarkets have to
invest in technology, sustainability, people and talent. The coming months will
revolve around the question of how supermarkets deal with that pressure.

The growing significance of Retail Media

Increasingly, retailers are setting up Retail Media, platforms through which
they sell advertisements to brand manufacturers that target shoppers at or near
the point of purchase. In itself, that’s now new, but the form of advertising,
the personalization and the way companies can now measure the effect of it has
evolved enormously.

Digitalization gained momentum during Covid, supermarkets were quick to build
out their websites and apps and work on solutions to stay in touch with their
customers. Since then, they have been able to collect more and more data from
their customers, amongst others, through loyalty card programmes, self-scanning,
in-app behaviour and online ordering.

At the same time, third-party cookies are being phased out. As a consequence,
the value of the first-party data that the supermarket has of its customers has
increased significantly. Selling this data, encrypted so that it cannot be
traced to individual shoppers, to manufacturers is becoming a very interesting
additional revenue stream, very welcome in times of slim retail margins and
economic uncertainties.

And retailers have stepped in, for example, Tesco has its Media & Insight
Platform, Sainsbury’s  the Nectar360 offering, Carrefour launched Unlimitail and
Albert Heijn its AH Media Services. Discounter Lidl and sister Kaufland have the
Schwarz Media Platform. The platforms allow brands to target their ads very
specifically, by age, diet preference, gender, store, time of day and measure
the effect immediately. And given the fact that most of the advertisement
outings are digital – on shopping carts, online, within the app, in product
searches, in-store on digital screens - the ad campaign can be adjusted in
real-time.

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In the Stores 

Carrefour signed an alliance with seven FMCG manufacturers with the aim of
promoting the market for plant-based products. The alliance seeks to democratize
and develop plant-based alternatives for customers at reasonable prices. The
retailer is aiming for €3 billion in annual turnover on vegetable proteins in
2026.

Migros customers now have the option to pay a voluntary surcharge to offset the
CO² emissions of the groceries that they purchase. The climate contribution is
determined based on the weight and CO² footprint of the product including
production, packaging and transport.

Aldi has presented a pop-up bar in Berlin in which registered consumers could
enjoy private label snacks and drinks for free. The 1,000 guests that came found
menu cards that indicated the price they would have to pay for the products in
store in case they would want to recreate it at home.

Waitrose has launched a new Japanese-style own label range including some 26
products ranging from Waitrose Japan Menyu Slow Cooked Chilli Jackfruit, Chicken
Katsu Curry to Japan Menyu Edamame Beans with Garlic & Chilli Salt. Half of the
new range is vegetarian.

Albert Heijn introduced a new plant-based line called AH terra. The new line
includes about 200 products and should bring the company closer to its goal of
50 percent of proteins sold being of plant origin by 2025.

Beauty retailer Douglas is intensifying its bet on private label. In the coming
years, the company aims to increase the current 7% share to a double-digit
percentage of sales.

Iceland is rolling out up to 500 new exclusive and own brand products into its
stores. It is part of a refresh of its frozen lines which the company calls its
‘biggest-ever launch’.

Mercadona has strengthened its position as Spain’s leading supermarket with a
close to 27% market share. The secret of the retailers’ success would be its
decision to reduce the prices of 500 private label products which stopped
customers’ trend to shop at discounters.

Netto has switched to a 100% digital lotalty card in France. On Ma Carte Netto,
customers will be able to find current and upcoming promotions, their purchase
history and receipts, as well as dematerialized vouchers and more.

Asda is launching a new food-to-go concept that is designed to drive shoppers
into stores. The Asda Food Hub will see the food offer change throughout the day
and will include breakfast, lunch and afternoon snack options, as well as meal
deal offerings. Shoppers will be able to place their orders using touchscreen
tablets for quick and efficient service.

Salling Group has rolled out  a new delivery service called BilkaToGo. Shoppers
will be able to select from a range of 30,000 products and they will be
delivered from the Bilka hypermarkets.

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Market Research 
Battle for Central European shoppers

Research by McKinsey highlights key forces driving market changes in the next
year. After surveying 4,500 CE consumers, interviewing regional retail and CPG
leaders, and merging insights with additional research, a remarkable
transformation in the grocery sector emerges. This shift may alter the way
consumers shop, the way grocers build their value propositions, and the way
manufacturers build their brands.

Consumers prioritize budget-friendly options to ease financial strain, leading
to reduced loyalty to brands and grocers when enticed by better prices. That is
why the report states that it is “time to battle for a new shopper”. The primary
insights revolve around four key trends: a focus on grocery affordability,
crafting value propositions for budget-constrained yet discerning shoppers, the
growing significance of Generation Z as a new consumer force, and the margin
squeeze faced by retailers and CPG manufacturers.

Based on the survey, 54 percent of CE consumers intend to increase shopping at
budget-friendly retailers to save money in 2023 and beyond. Consumers are also
planning to save by favoring private label brands (53 percent), selecting
lower-priced options (51 percent), and reducing overall grocery volume (48
percent). Additionally, 58 percent of retail shoppers in Central Europe are
stocking up on products when they find attractive prices.

The recommendations of the researchers for Grocers and CPGs is that they should
build advantage with private label, drive consumers acquisition and loyalty,
twist consumer Experience in online and prioritize cost excellence.

Most French have trouble making ends meet

A survey conducted by Appinio/LSA in August reveals that nearly 75% of the
French say that it is a complicated exercise to make ends meet at the end of the
month. That’s a +12.9 points increase versus January ’22.

More than two thirds of French people believe that their purchasing power is bad
(in January 2022: 38%), and it has now become difficult to save for 84.5% of
French people (+13.5 points in a year and a half). 84.5% of the interviewees say
that they are worried (+17.5 points). Clearly, the gloom is general and has
seriously worsened in 18 months.

Back to top

PLMA News 
Few spots left for PLMA’s Executive Education Programme

The private label business can be complicated and challenging. But PLMA can give
you the power and the knowledge you need to be successful at it. PLMA’s
Executive Education programme takes place at the campus of the Nyenrode Business
Universiteit, one of the pioneers in European business education, and the
programme is devoted entirely to private label.

PLMA’s Executive Education Programme will be held 25-26 October 2023 and
includes lectures and interactive sessions, designed for both manufacturers and
retailers. The curriculum covers what executives need to know about private
label: private label strategy, manufacturer-retailer relations, new product
development, a retail case study, supply chain logistics and retail trends and
the implications for Private label. Retail speakers include Tore Hoylie, Head of
Innovation and Own brand of Rema 1000 Norway as well as former Sourcing
Vice-President of Walmart Arjan Both. A guided visit to important Dutch
retailers is also part of the programme.

Learn from industry professionals, interact and network with the attendees and
make your private label business future-proof!

For more information or to sign up click here.

International exhibitors push PLMA’s US Private Label Trade Show to new record

PLMA has released key numbers related to the November Trade Show and they are
impressive. "PLMA's 2023 US Private Label Trade Show is 20% larger than last
year," reported Anthony Aloia, corporate v.p. "We’ve added nearly 260 exhibitors
and should finish at 1,650 or more, an all-time record. We've increased exhibit
booths by 450 and should finish at about 2,760. Non-food exhibitors alone have
expanded by more than 40%," explained PLMA's chief showrunner. "There are over
550 new exhibitors. More than 45% of the Show floor, that's 760 exhibitors,
consists of suppliers from outside the US. Nearly 60 countries will be
represented at the Trade Show, to be held November 12-14, in Chicago." Visitor
registration is still open, contact +1 212 972-3131 or e-mail visitors@plma.com.

PLMA's Lunch & Learn Webinar with Daymon on 29 November

Daymon’s recent survey sheds light on the evolving landscape of private label
manufacturing, on the resilience and adaptability embraced by manufacturers
worldwide. Key findings reveal a surge in optimism regarding private label
growth, transcending regions and maturity levels.

Explore the bright future of private label in an era of inflation. Uncover the
secrets behind their growth potential, and find out how manufacturers are
investing in product development and collaboration to stay competitive.

Discover why sustainability is a top priority for manufacturers worldwide. We'll
delve into the environmental, regulatory, and consumer-driven factors propelling
this movement, and how manufacturers are taking the lead in reducing Scope 3
emissions.

Unlock the future of manufacturing at this enlightening webinar, shaping a
sustainable and prosperous private label industry.

Complimentary registration for PLMA members, retailers and wholesalers - contact
education@plma.nl to register.
 

Back to top

Events 
25-26 October 2023

PLMA's Executive Education Programme
Nyenrode Business Universiteit, The Netherlands

12-14 November 2023

PLMA’s U.S. Private Label Trade Show
Chicago

29 November 2023

 PLMA's Online Lunch & Learn Online Speaker Series

Back to top

E-Scanner is a monthly publication of the Private Label Manufacturers
Association, Strawinskylaan 1873, 1077 XX Amsterdam, The Netherlands.

©2023 PLMA

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