Dealing With Dutch Food Retail - Pim Haasdijk, Green Seed
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Transcript of Dealing With Dutch Food Retail - Pim Haasdijk, Green Seed
Board Bia Head Office, Clanwilliam Court, Lower Mount
Street, Dublin 2
22 April 2009
Pim Haasdijk, Green Seed The Netherlands
Dealing with Dutch Food Retail…..
Commercial insights and which pitfalls to
avoid
Table of contents
• The Dutch Retail Scene…..a brief overview
• Who are the main players?....brief account profiles
• Entering the Dutch market
Ø Setting the Scène
Ø Strategy
Ø (Launch) Preparation
Ø (Trade) Introduction
Ø Launch
• How do we work?
• The Daniels Group case
• Summary: The 9 key drivers for successful exports
Welcome to the world of
Our story began providing help exclusively for British food & drink
companies, as the ‘Food From Britain International Network’.
Since we started business in 1984, we have assisted over a thousand of
clients growing brands and selling products internationally.
Today the ‘Green Seed Group’ services food and drink companies from
around the world. We are a unique network of 12 privately-held sales &
marketing consultancies covering 19 countries across Europe, North
America and Australia.
The Green Seed Story
The Green Seed concept
Seed
Incubate
Grow
Harvest
Through our specialist international
food and drink expertise we create
value for our client’s brands and
products.
We help business to grow,
from the seed to the fruit
offering growth strategies
for each phase of the
product life-cycle
The Dutch retail scene
Developments in Dutch retail
Internationalisation
Innovation→→→→ UK
Increasing concentration
Fascia as brand
Development Own labels
Own label is gaining share in many main product groups
29.1
20.6
16.2
21.7
27.3
27.8
49.1
23.6
5.9
42.2
20.2
1.1
30.3
21.4
16.5
23.6
27.6
28.8
51.7
23.7
6.3
42.2
20.6
0.7
Totaal Gemeten Groepen (1.2%)
Houdbaar (0.8%)
Dranken Houdbaar (0.3%)
Kruidenierswaren (2%)
Zoetwaren & Snacks (0.3%)
Diepvries (1.1%)
Vers (vast gewicht) (2.5%)
Drogmetica (0.1%)
Personal Care (0.4%)
Papier (0%)
Home Care (0.4%)
Tabak (-0.4%)
2007 2008
Private label value share per supergroup
( ) = % growth vs. PY
Food open markets
Source: AC Nielsen 2008
OL share rapidly increasing
• Stronger need for retailers toposition store format
• Development of premium own labels
• Desire of retailers to decrease power of A-brand suppliers
Own label developments
Characteristics of Dutch supermarkets
Average selling space of 750 m2
– Small assortments
(1 facing→ high order frequency)
– Listing means de-listing
– Small outer cases
– Just in time (JIT) logistics
– Short order lead time
- The total supermarket turnover was € 30 bln
- 4,800 supermarkets
- Average turnover of € 7,928 per m2
Retail margins
No listing fees
VAT rate on food products is 6%
19% VAT on non-food and high alcoholic drinks
Formula 2 (Albert Heijn)
(RSP-VAT) – buying price = profit margin
Profit margin / RSP = profit margin in %
Formula 1 (other supermarkets)
(RSP-VAT) – buying price = profit margin
Profit margin / (RSP-VAT) = profit margin in %
Market shares within Retail
Source: AC Nielsen 2008
Market Share within Total Food Retail NL 2008
Albert Heijn
30%
Super Unie
31%
C1000
13%
Super de Boer
7%
Aldi
9%
Lidl
5%
Other
5%
Who are the main players?
100% subsidiary of Ahold
Euro 7,48 billion (+ 7,9%, 2007)
30.0 % market share (2008),
Market Leader / innovator
Growth Success:
Market leader in size and innovation. Strong focus on OL
development à increasing OL segmentation with focus
in Premium
753 stores (2008), 200 franchise
2006: + 23 Konmar stores
2008: + 56 C1000 stores -> market share > 30%
Multi format :
Albert Heijn (686), AH XL (27), AH to go (40)
Positioning
Make everyday grocery affordable and the special available
Up-market full service supermarket
Middle of the market -> improved price image
Pricing is at / slightly above average
Strong focus on fresh products
Wide and deep Assortment (12.000 sku’s)
Customer profile
- High education scale
- 1 + 2-persons HH, focus more on young families with children
- Welfare class A and/or B
Suppliers strategy
- Low & High involvement = Buying & Merchandising
- Euroshopper = international => via AMS
- Exclusive suppliership for OL
Centralized Logistics
- (Nieuwegein, chilled and slow movers; Geldermalsen, slow
movers; Pijnacker, Tilburg, Zaandam, Zwolle, fresh products;
Culemborg, cheese)
- VVM (today for tomorrow)
30.7% market share
- Plus 6.1 %
- Jumbo 5,0%
- Koopcom 4.4 %
Boni-Markten, Boon, Co-op, Deen,
Dekamarkt, Jumbo, Em-Té, Golff,
Hoogvliet, Jan Linders, Nettorama,
Poiesz, Sanders Supermarkten, Sligro,
Spar, Sperwer (Plus), Vomar
Voordeelmarkt
Number of Stores 1910:
- Plus 278 (++)
- Jumbo 117 (+)
- Sligro 200 retail stores (Golff,
Meermarkt + EM-TE) and 50 cash &
carry)
- Koopcom 90 stores
Central buying organisation
2007 : 15 members
July 2008 : new member Koopcom (Drik v/d Broek bedrijven, +4,4 %, 90 stores)
National and Regional multiples
Multiples regionally very strong
Positioning
- Full service supermarkets + discount
- Every member has its own characteristics
Logistics
- Through warehouses for dry-grocery, frozen and chilled foods
- Central depots or per member
Euro 4,09 billion
13.2% market share (2008)
2008 : AHOLD sold all 73% shares => got 56
C1000 stores
2008: CVC capital partners
443 stores (2007) -> 387 (2008)
= 90% Independent entrepreneurs (franchise)
Mission; help the customer save money, time and
troubles during the daily shopping in a pleasant
way
Market follower
Full service supermarket
Wide and undeep assortment -> more upgrading :
quality & fresh & innovation -> increasing focus on OL
Customer profile
- families with children -> also more focus 1 + 2 pers. HH
- social class C and D
Logistics
Decentralised→ 5 depots
(Gieten, Raalte, Breda, Woerden, Eindhoven)
Central chilled distribution center
Euro 2,08 billion
2008: Laurus -> Super de Boer N.V.
2008: Casino increased their share to a total of 63,3%
2006: Laurus sold off
- Konmar stores to Albert Heijn (29) and Jumbo (12)
- Edah (223) stores to Sperwer (Plus) and Sligro
(EMTE and Golff)
6.8% market share
Number of stores 305
> 50% franchise
Policy
“full service to their shoppers”
Wide and deep assortment
Customer profile
- High education scale
- 2-pers. HH and families with childeren
- Welfare class A and/or B
Logistics
Beilen, Den Bosch, Veenendaal en Drachten
•100% subsidiary of Aldi North, Germany
•Positioning as hard discounter
•Very small and undeep assortment withmany fancy labels (± 800 a 850 SKU’s)
•Logistics - 7 depots
• (2006) 9.6% ->(2007) 8,9% market share
• 442 stores
• Customer profile:
- social class C and D
- also “Fun” shoppers
• 4. 0% market share
• 249 stores
• Customer profile: social class C and D
•Largest discounter network of Europe
•Positioning as hard discounter
•Small and undeep assortment
•“Value for money” strategy
•Logistics - 4 depots
Hard Discount
Entering the Dutch market
Dutch vs. UK Retail scene – similarities:
• High trade concentration – high buying power
• Coalition vs. conflict model
• Severe price competition
• Focus on Adding Value / Category Growth e.g. no listing fees
• Focus on (Premium) Own Label
• Sophisticated Logistic infra-structure (Central deliveries, JiT, IT-driven)
• Risk avoiding vs. entrepreneurial attitude
Entering the Dutch market
Setting the scène
Dutch vs. UK Retail scene – differences:
• Clear retail leader vs. followers
• More limited resources for Category management
• Lower price points
• Relative small outlets à impact on assortments,
packaging, logistics
• Importance multiples vs. franchise chains (discipline)
Entering the Dutch market
Setting the scène
• Very open trading mentality à no mental nor logistic barrier
• Good (English) language skills
• Strong focus on UK developments
• High food retail concentration à 5 players > 90% share
• Increasing focus on OL (chilled, ambient and frozen)
• Diversification in OL (price defensive, standard, Premium &
Organic)
• Clear preference for direct commercial approach
• Exclusive supply vs. non-exclusivity
• Foreign suppliers to adapt to (IT) systems and procedures
Entering the Dutch market
Setting the scène
• Internal SWOT-analysis à company’s success
drivers
• Customer selection + understanding profile
• Strategic decision OL vs. brand à resources (human,
financial, time path)
• In-direct vs. direct à OL per definition direct
• Logistic infra structure à adapt to local needs
Entering the Dutch market
Strategy
Just knocking on the door is not enough anymore….so
DO YOUR HOMEWORK FIRST à Understanding customer(s) + commercial environment
1. Market share and mentality
2. Fascia concept + positioning à their consumer, multiple vs. franchise
3. Commercial strategy à pricing, assortment, promotional, assortment revision time slots
4. Buying structure + trading conditions
5. Logistics à depot + ordering structures, administration procedures, EDI / GDSN + crate systems
6. Regulations: VAT, Packaging tax costs etc.
Entering the Dutch market
Preparation
DO YOUR HOMEWORK à Understanding local
consumer in relation to product concept
1. Brand vs. OL
2. Comprehensive market assessment à
– Development of category
– Competition à pricing, investments, outer case
specs
– Available space à assortment, pack design, outer
case specs
3. Product concept testing à qualitative / quantative
Entering the Dutch market
Preparation
DO YOUR HOMEWORK à Simulate commercial
viability
1. Distribution scenarios vs. account investments
2. Rate of sale projections
3. Pricing / margin strategy
4. Sales forecast yr 1, 2 and 3
Profitability analysis per account
Entering the Dutch market
Preparation
1. Initial contacting
2. You did your home work à Dutch market + retailer understanding and UK experience…. but NL ≠ UK
3. You understand THEIR concept , problems & needs
4. Company credentials + product concept
5. Present business case based on assumptions:
• Distribution levels
• Assortment composition (no. of SKU’s)
• Investments (support plan)
• Other underlying assumptions e.g. rate of sale, pricing/margin contribution, product ranking vs. competition etc.
• Trading conditions (payment terms, overriders)
6. Present Supply Chain incl. ordering structure (lead times, warehousing and data exchange)
Entering the Dutch market
Introduction to Trade
While presenting……
1. Be ambitious but realistic in objectives
2. Discuss openly relation between distribution and investments
3. Focus on your added value
4. Rather than just attacking competition ….
5. Convince preferably based on hard facts
While discussion conditions……
1. Include immediately all conditions / costs….avoid surprises
afterwards
2. Keep the lead rather than reacting à defensively
Entering the Dutch market
Introduction
1. Base your critical launch time plan on retailer specific
time slots
2. Product administration (GDSN, manual product spec
sheets incl. palletization
3. System set-up:
• EDI + supply chain à build up direct contacts with
logistic managers
• GDSN
• VAT regulation / packaging tax
Entering the Dutch market
Launch
How do we work?
Ø Trade & Consumer Insight
Ø Opportunity Assessment
Ø Trends & Developments
Ø Scanner Data (Nielsen)
Ø Market Entry Strategy
Ø Product Proposition Evaluation
Ø Sales & Profitability Projections
Ø Partner Search & Introduction
Ø Sales Strategy & Planning
Ø Broker Selection and Management
Ø Channel & Category Planning
Ø Key Account Management
Ø Brand Planning
Ø Trade & Consumer Promotion
Ø Event Management
Ø Public Relations
“We Advise, We Execute & We Deliver”
How to go about in exports?
How does the Green Seed Group assist?
• An international network giving access to key export markets in Europe, North America and Australia
• A consistent approach for our clients across the different markets
• Sales and marketing is what we do; is what we are good at
• Your commercial international projects:
– we will manage it for you, with you
– you have a direct relationship with your clients
– You score
“We Advise, We Execute & We Deliver”
A case study from the UK
Launch of freshly
squeezed juices
in leading Dutch
department store HEMA
followed by….chilled
premium cheesecakes
to leading Dutch
retailer ALBERT HEIJN
Daniels Group
Who is Daniels Group ?
• Makes chilled, fresh, natural foods without compromising on taste
• Manufactures in brand & private label for major UK & European retailer &
foodservice
• currently operates over 7 owned manufacturing sites
in the UK
• Is committed to growing our Business in Europe both through UK Export & in
potential manufacturing acquisition & set-up on the continent
• Annual turnover > £ 219 million
Daniels Group is committed to developing 5 core categories
Development
expertise
Brand & OL
consumer
understanding
1. Chilled Ready Meals
2. Soup
3. Fresh prepared fruit
4. Fresh Drinks
5. Traditional chilled puddings / desserts
£1,343 £1.453
£1.830
£3.307
£3.825
£7.500
£0
£1.000
£2.000
£3.000
£4.000
£5.000
£6.000
£7.000
£8.000
2005 2006 2007 2008 2009 2010
Working with Green Seed offices Daniels has more than doubled
the size of our Export business in two years (previously static)
Sales Revenue £000’s
ACT. ACT.
ACT
PLAN
PLAN
ACT
Development plan
with GS Offices
Daniels Group
Client briefing
Department store chain Hema changed 2007 strategy within Food
and Beverage, emphasizing more on healthy and fresh concepts.
Hema was interested in finding a chilled juice supplier who was able
to supply according to these new objectives and targets.
Green Seed's response
Utilizing its broad manufacturer’s network, GreenSeed The
Netherlands introduced Hema to Daniels PLC’s drink division.
GreenSeed The Netherlands was asked by Daniels to coordinate
the development and launch of a new juices and smoothies range,
in line with Dutch consumer preferences and Hema’s new strategy.
GreenSeed The Netherlands dealt with the pre-launch preparation,
organising factory visits, labelling, logistics
and marketing for the launch.
The results
A range of currently 10 SKU’s were launched successfully
at Hema in both Retail and Foodservice (in-house restaurants). New
drink line extensions are being prepared to be launched soon.
Albert Heijn tray bakes – launched Sept 08
Same Dutch retailer was looking for something
new & different in mainstream desserts fixture
DUTCH FRUITS & ING.
NEW CATEGORY
OCCASSION
EVENT
FAMILIARITY
HOT THE UNKNOWN OR
HISTORIC
COLDFAMILIAR
MAIN FOCUS
HOT or COLDFAMILIAR & APPROACHABLE
AS EXP. HOT
STROOPWAFFLE
BITTERKOEKJES
GRIESMEELPUDDING VLA
DUTCH FAVOURITES
EASTER ’09SUCCESS / LEARNINGS
CLASSIC DUTCH DESSERTS
CONSUMER
SERVES 2, 4, 6 +
TABLE PRESENTABLE
THAT FINISHING TOUCH / FEEL INVOLVED
UK & OTHER EUROPEAN DESSERTS INFLU.
AB1
HIGH BASKET SPEND
DRAW TO AH, PREMIUM, INNOVATION
Key considerations in developing a range of
desserts for the Dutch market
Albert Heijn Cheesecake – launched Easter into the entire
+700 store estate
Key rules for successful exports
1. Understand your potential customer and the competitive
environment
2. Invest in time and resources
3. Get local advice
4. Go step by step, market by market
5. Invest in sales people, not just linguists
6. International project needs full support from company top
management
7. Develop and implement support programmes: get your product off
the shelf
8. Have patience!
9. Do your homework properly
= Be Committed
Thank you!
“We Advise, We Execute & We Deliver”