News
Is Finland considering limits on private labels?
Finland is currently discussing proposed changes to its Food Market Act that could limit how retailers prioritise and expand their own private label brands. Private labels have become an essential part of modern retail. They provide consumers with affordable alternatives, strengthen price competition, and play an especially important role during periods of inflation and economic uncertainty. The debate is ultimately about finding the right balance. Like many European markets, Finland’s grocery sector is highly concentrated, with a relatively small number of retail groups controlling a significant share of consumer access. Similar market structures exist across much of Europe. What makes Finland particularly interesting is that it may become one of the first countries to openly examine how the long-term balance between retailer power, supplier innovation, private labels and consumer choice should evolve. Today, retailers are no longer simply distributors; they are also brand owners competing directly with branded manufacturers. As a result, they have considerable influence over product visibility, assortment and category development. Traditionally, supermarket shelves served as a platform for competing suppliers. While that platform was never entirely neutral—large brands have always enjoyed advantages in securing shelf space—the competitive landscape has evolved significantly. Part of the Finnish debate focuses on how retailers use category insights, consumer behaviour data and supplier know-how when developing competing private label products. Unlike many technology sectors, food innovation is often difficult to protect. This leaves branded suppliers particularly exposed when retailers simultaneously control shelf access, possess detailed category data and launch competing private label alternatives. Historically, trade barriers were created by governments through tariffs, protectionist measures or preferential treatment of domestic industries. Modern retail markets operate very differently, yet some of the underlying structural dynamics are beginning to resemble one another. While this is clearly not equivalent to government-imposed trade barriers, some suppliers increasingly report similar challenges around market access, visibility, dependency and competitive balance. None of this suggests that private labels are inherently problematic. On the contrary, strong private label portfolios have become a permanent and legitimate feature of modern retail strategy. However, Finland’s debate raises an important question for the industry’s future: How can retailers continue to develop successful private label brands while ensuring that supplier innovation, independent brands, category diversity and healthy market competition continue to thrive? Finland may not be alone in facing these questions. But it could become one of the first countries to define where that balance should lie. Jakob True Managing Director, Green Seed Nordic
Packaging – A Strategic Product Decision
For many brand owners and private label manufacturers, packaging has traditionally been treated as a supporting act – important, yes, but secondary to formulation, pricing, and positioning. That mindset is now changing. From August 2026, the EU’s Packaging and Packaging Waste Regulation (PPWR) will apply directly across all member states. Unlike earlier packaging rules, it leaves little room for interpretation and sets binding requirements for all packaging placed on the EU market. For food and drink manufacturers, this is not just another regulatory update. It marks the point where packaging becomes a strategic product decision. Packaging is no longer “just the pack” PPWR introduces clear obligations around recyclability, waste reduction, labelling, and substances of concern. In doing so, it effectively elevates packaging to the same level of scrutiny as ingredients or claims. What changes in practice is when packaging decisions are made. Until now, many products have reached an advanced development stage before packaging was fully locked in. Under PPWR, that approach becomes risky. Packaging must work not only for shelf appeal and logistics, but also for proven regulatory compliance across markets. For companies with broad ranges, multiple brands, or extensive private label activity, this shift is particularly relevant. The regulation applies uniformly across Europe, making inconsistencies harder to manage and last‑minute fixes more costly. The real challenge is operational, not creative While PPWR is often discussed in terms of material or design changes, the bigger challenge lies behind the scenes. The regulation requires clarity on roles in the supply chain and reliable information on packaging composition and compliance. In many organisations, that information is spread across functions, systems, and external partners. Under PPWR, such fragmentation can become a real bottleneck. For brand manufacturers, delays in packaging validation can slow relaunches or regional roll-outs. For private label manufacturers, unclear responsibilities or missing documentation can quickly affect retailer relationships and timelines. In both cases, packaging readiness directly influences speed to market. This implies that PPWR is less about redesigning packs and more about how well packaging decisions are managed internally. What this means for brands and private label manufacturers For brands, packaging increasingly carries reputational weight. Sustainability commitments, consumer expectations, and regulatory requirements are converging. Packaging choices now signal whether a brand is credible and future‑oriented – or simply reacting under pressure. For private label manufacturers, the stakes are equally high. Retailers are under growing regulatory scrutiny themselves and expect compliant, scalable solutions from their manufacturing partners. Those who can demonstrate control and consistency in packaging will be easier to work with and better positioned for long‑term cooperation. In both models, packaging is becoming part of the value proposition – not only a cost factor. From compliance burden to competitive advantage Viewed solely as a regulatory obligation, PPWR feels like additional complexity. But taken more strategically, it also creates an opportunity. With harmonised EU‑wide rules, companies that invest early in clear processes and reliable packaging data gain predictability. They can move faster, plan more confidently, and respond more smoothly to retailer and market requirements. In a sector where product cycles are shortening and expectations keep rising, that operational discipline becomes a competitive advantage. What forward-thinking companies are doing now Even though the regulation applies from August 2026, many manufacturers have or are already preparing by: – Identifying packaging formats most exposed to regulatory change – Clarifying internal and external responsibilities – Improving the way packaging data is collected and maintained – Bringing regulatory considerations earlier into product development These steps don’t require radical change – but they help reduce risk and pressure at a later stage. Stay agile – a new baseline for product development PPWR will not redefine the food and drink industry overnight. But it does reset the baseline for how products are developed and brought to market. In 2026 and beyond, packaging will no longer be the final decision before launch. It will be part of the strategic conversation from much earlier on. For brand and private label manufacturers, recognising this shift now is not just about staying compliant – it’s about staying agile, credible, and competitive in a more regulated European market. If you have any questions or want to obtain more insights, please get in touch with me: nguenther@greenseedgroup.de Nicole Guenther Managing Director, Green Seed Germany
From Fan Favorite to Grocery Shelf: Helping Restaurant Brands Win in Retail
We’ve seen restaurant brands try their luck in U.S. retail time and time again, but the jump from menu to grocery shelf is never as simple as slapping a logo on a jar. The grocery aisle plays by different rules — where design, distribution, pricing, and shelf performance matter more than awareness and popularity alone. Take many well-known restaurant brands. Even when consumers love the restaurant experience, that doesn’t automatically translate into retail success. The appeal is often tied to the in-store experience itself — the format, the occasion, the customization. That experience doesn’t translate neatly onto a shelf, where velocity, not brand recognition, determines survival. We’ve seen this restaurant brands to retail model work in the UK. A great example is Pizza Express which has nearly 400 restaurants, yet their retail brand — fresh pizza, dough balls, salad dressing — now appears in over 4,000 supermarket locations across the country and enjoys more than $150M in retail sales. Following this success Wagamama now offers meal kits and Leon sells waffle fries in supermarkets nationwide. The difference isn’t only love for the brand. It’s high quality strategic thinking and execution. The Restaurant brands that win understand one fundamental shift: retail consumers shop differently, they compare options, and decide in seconds. It’s not all about being loved, it’s about being chosen, again and again. Here are four ingredients for restaurant-to-retail success:• Offer a unique, differentiated product that captures the essence of your restaurant experience• Create a product with a clear role in the consumer’s frequent eating habits• Determine pricing and distribution that match your brand’s profile• Execute marketing flawlessly within your core audience before scaling 1. Offer a unique, highly differentiated product The brands that succeed don’t try to recreate their menu — they bottle what makes them special. If your product feels interchangeable with what’s already on the retail shelf, brand recognition alone won’t save you. Nando’s built its retail presence around peri-peri sauce — a flavor instantly recognizable and hard to replicate. It doesn’t just compete in hot sauce; it owns a distinct subcategory. In pasta sauce, New York Upscale restaurants Rao’s and Carbone win through specificity: Rao’s on consistency and taste, Carbone on bold identity. Different strategies, same successful outcome — clear differentiation. 2. Create a product with a clear role in the consumer’s life A strong product doesn’t just stand out — it makes sense. Retail consumers aren’t trying to recreate a restaurant experience; they want products that fit how they already cook, eat, and shop.Momofuku took its signature bold flavor and packaged it as chili crunch — a spicy, textured oil that integrates seamlessly into everyday cooking. Rather than replicating a dish, it created something people reach for regularly. Chick-fil-A did the same with its cult-favorite sauce, translating it into a versatile condiment that earns repeat use rather than one-time trial. 3. Pricing, premiumization, and focused distribution Scale doesn’t come from being everywhere — it comes from being in the right places, at the right price, for the right consumer. Carbone maintained a premium price point and expanded through retailers that reinforced its positioning, competing on quality rather than price. Gymkhana Michelin star Indian restaurants are following a similar model, using signature flavors, bold branding and premium pricing to signal an elevated experience. Both have avoided chasing mass distribution too early — and that discipline is a big part of why they have broken through. 4. Execute flawlessly within a core audience before scaling “An inch wide and a mile deep.” Focus on the customers who represent your best chance at scaling, and execute flawlessly before expanding. Brands that scale successfully already resonate deeply with a specific audience. They don’t try to appeal to everyone at once — they build credibility within a core group first, then grow from a position of strength. Zaro’s New York bakery is succeeding in retail because it delivers something specific: products that feel authentic, high-quality, and occasion-driven to consumers who already understand and value that New York experience. The brands that win don’t start broad. They start deep. Sanjay Panchal | Green Seed North America | sanjay.panchal@greenseedgroup.com
GLP-1 Drugs Are Changing the Shape of Demand — Not Just the Size of the Basket
Move over Veganuary. For anyone working in food and drink at the beginning of 2026, the rise of GLP-1 drugs medication has dominated the news agenda, and its impact is already showing up in shopper data and category performance. The sector is beginning to adapt. The headline point is that adoption, while still relatively small, is growing quickly enough to affect purchasing behaviour in a visible way. Uptake: The US Leads, the UK Is Catching Up The United States provides the clearest early indication of potential impact. Surveys suggest 12–16% of American adults have tried a GLP-1 drug, with around 6–8% currently using one for diabetes or weight management. In absolute terms, that means tens of millions of consumers whose appetite and eating patterns have been biologically altered. The UK is several years behind on the adoption curve. Data cited by The Grocer from Kantar and IGD suggests around 4% of UK households now include a GLP-1 user, roughly double the level seen a year earlier. The base remains small, but the trajectory — and the US precedent — explains why retailers and suppliers are watching closely. What the Data Is Showing So Far The most consistent signal internationally is lower overall food consumption. Research from Cornell University and consumer analytics firm Numerator indicates U.S. households with a GLP-1 user reduce grocery spending by roughly 5–6% within six months of starting treatment. The impact is uneven across categories: Categories seeing declines confectionery and sweet snacks bakery products savoury snacks quick-service restaurant visits alcohol and sugary drinks Categories showing resilience or growth fresh fruit and vegetables yoghurt and fermented dairy lean protein foods functional or high-protein snacks The pattern is consistent with the pharmacology: the drugs suppress appetite and reduce reward signals from high-calorie foods. In the UK, the early data reported by the IGD (Institute of Grocery Distribution) show similar behaviour: 69% of users snack less frequently 35% eat out less often Around half say they eat fewer meals overall That combination translates into smaller baskets and fewer impulse purchases, which have obvious implications for categories historically driven by snacking occasions. How Retailers Are Responding Several retailers have already begun experimenting with range architecture. High-protein yoghurts, nutrient-dense ready meals, smaller portion formats (like the 100g steak from Ocado) and “mini-meal” concepts are appearing across private label. The thinking is straightforward: if consumers eat less, the opportunity lies in higher-quality, nutritionally efficient products rather than larger volumes. However, the industry is still testing the right positioning. Explicit “GLP-1 friendly” labelling risks being niche or short-lived if the drugs plateau or face regulatory pressure. The US Health Debate May Shape the Curve Another factor to watch is the safety conversation emerging in the US. Regulators, including the U.S. Food and Drug Administration, have warned about unapproved compounded versions of GLP-1 drugs, while clinicians continue to debate potential side effects ranging from gastrointestinal complications to muscle loss. None of these issues has fundamentally slowed adoption yet, but they may influence how long consumers stay on treatment and how widely the drugs are prescribed outside the US. The Overlooked Question: What Happens After Treatment? For the food industry, perhaps the most important unknown is post-treatment behaviour. Clinical studies show many patients regain weight after stopping GLP-1 therapy, implying that long term use may be necessary to maintain results. But even where weight returns, behavioural patterns often change. Users report smaller portion expectations, lower tolerance for heavy, high-fat foods and a greater focus on protein and nutrient density. In other words, habits formed during treatment may persist, even if appetite partially rebounds. Strategic Implications for Food & Drink Brands For brand owners, the key takeaway is not that demand will collapse — but that the composition of demand may shift. Three implications stand out: Snacking occasions are under pressure, particularly high-calorie impulse products. Protein, fibre, and nutrient density are becoming increasingly important commercial attributes. Portion architecture may matter as much as formulation. The US experience suggests the biggest risk is not falling consumption overall, but being over-indexed in the wrong types of calories. GLP-1 adoption in the UK is still early. But the trajectory, and the signals already visible in the US, suggest this is not just a healthcare innovation. For food manufacturers and retailers, it represents a structural shift in how consumers experience hunger — and therefore how they buy food. Simon WaringManaging Director, Green Seed UK To get in touch with our UK team Contact Us
The existential question facing medium-sized brands
The growing concentration of retailers has changed the dynamics between multiples and food suppliers. In a market where private label continues to grow alongside A-brands, medium-sized producers are increasingly being squeezed. Should they survive as medium-sized brands or focus on private label? Are they ultimately doomed, or is there still a future for them? Private label products have gained substantial ground across all markets. This is not a new phenomenon, as own brands have been a core element of retail strategies for many years. However, the internationalisation of retail — with fascias operating in multiple countries and acquisitions leading to higher levels of concentration — has created larger volumes, higher service requirements, and a stronger negotiating position for retailers. This pressure can marginalise smaller producers, who often struggle to achieve the economies of scale needed to compete effectively. As retailers continue to consolidate their supply chains, the need for reliable, cost-effective suppliers becomes ever more critical. To remain relevant, medium-sized producers must build scale. Developing international supply partnerships therefore becomes essential, with mergers and acquisitions often the natural outcome. For every SKU, the question is straightforward: does this product deserve its shelf space? Medium-sized brands frequently face the classic “stuck in the middle” problem — neither cheap enough to compete with private label nor distinctive enough to challenge A-brands. They may be overly reliant on retail distribution, with limited direct consumer pull, or lack the resources to outspend A-brands on marketing and trade terms. As a result, medium-sized brands can only survive if they clearly add value to the category. They must differentiate and actively contribute to category growth. Our advice is clear: become a specialist brand. Claim and own a niche (for example, gluten-free products or premium crisps) and ensure the brand is genuinely meaningful. Bring shopper insights, propose exclusive launches, and even consider producing selected private label products without undermining the core brand. In doing so, the brand contributes to storytelling and category development for the retailer, helping to trade shoppers up from private label. The focus shifts from defensively protecting shelf space to actively building the category. The expertise a brand brings strengthens the trade relationship through credibility. Becoming a partner rather than simply a supplier offers longer-term protection. Ultimately, success depends on relevance to the multiples. This is what challenger brands demonstrate every day: the ability to be distinctive and innovative. Their success is often recognised by leading brands, which acquire them before they even reach medium-sized scale. Perhaps some medium-sized brands should reflect on those earlier days, when they themselves were the exciting challengers — and return to those roots. What Is The Alternative For Medium-Sized Brands? What is the alternative? Delisting by multiples and the resulting loss of distribution, reducing the market position to a local one, acquisition by an A-brand, or gradual disappearance driven by margin erosion. In a consolidating market, a clear strategic choice is essential to protect long-term market position. Philip HoremansManaging Director, Green Seed Belgium To get in touch with our Belgium team Contact Us
The Consumer As An Algorithm: How AI Is Changing Perceptions and Purchase Decisions
Up until now brand awareness, strategy positioning and effective communication campaigns have shaped brand value and determined market success. But this is no longer valid. What you say about yourself is no longer how people perceive and value you. Building trust has become a key success factor. Transparency, consumer testimonials and experiences create digital reputation. And that becomes the source of the AI algorithms in analysing, processing and delivering information about you or your brand. When you ask on your internet browser if you can trust brand A, the outcome does not necessarily reflect your marketing campaign or company sources. It flows from the consumer perspectives rooted in experiences that are then digested by the AI bots such as the LLM’s (Large Language Models) whose outputs are becoming ever more credible in consumers’ eyes and in guiding their future decisions. And this entails risks because the feed data can be manipulated and this for sure will affect what the AI bots write about the brand. One can be critical about the future implications of the new reality which is shaking business model foundations. But it is there and you either cope with it or face becoming a dinosaur. When considering communication processes, its purpose needs to be double faced: emotional for consumers but also logical for machines. One needs to integrate AI bots in the communication targets. SEO strategies should deliver not only to search engines but also to GEO’s (Generative Engine Optimization) which are no more than conversational models. It also means that a poorly described product or one which shows inconsistent data is overlooked by AI agents. The perception of a brand’s value today is built into forums that the brand doesn’t control, such as Reddit, social networks such as TikTok – or portals such as DECO Consumers’ Association in Portugal where consumers feed in their own evaluations. These platforms are avidly read before the potential consumers or users take decisions. There are efficient tools for omnichannel ticketing / addressing costumer complaints such as Freshdesk or Zendesk that companies cannot ignore any longer. Auditing your brand’s digital presence and integrating AI tools for digital reputation analysis will become mandatory to design any future communication strategy. One needs to be prepared for new interfaces between the consumer and selling channels whether an e-commerce platform or even the supermarket shelves. These AI agents will interact with websites and ultimately can command purchases on behalf of the consumer. Luis GarciaManaging Director, Green Seed Portugal To get in touch with our Portugal team Contact Us
A New Model of Innovation: How Social Media Are Redefining Consumption
After years marked by health crises and inflation, 2025 signals a turning point. According to Nielsen data, FMCG sales are up +2% year-to-date (08 2025 vs 2024), while the number of SKUs has increased by +3.9%. These positive signs are not merely cyclical; they reveal a new model of value creation, shaped by connected, demanding consumers and the growing influence of social media as a driver of innovation. The way new products emerge has radically shifted. Nearly one in two innovations today originates from social media, whether through a viral TikTok challenge, an Instagram story, or the endorsement of a powerful creator. The traditional launch model, based on mass advertising and brand heritage, is being replaced by a bottom-up dynamic led by online communities. These “born-online” products create demand before supply, build scarcity before availability, and rely on virality to accelerate awareness. When successful, this model generates exponential visibility and rapid sales growth. Yet it remains fragile, with almost 50% of innovations still disappearing within four years due to weak in-store execution or a lack of long-term anchoring. In this new landscape, the product alone is no longer enough to ensure success. Growth is increasingly driven by the ecosystem that surrounds it. A loyal community built through authenticity and dialogue, coherence between the influencer’s persona and the product’s values, impactful packaging designed for both screen and shelf visibility, and flawless execution in stores all combine to sustain momentum beyond the initial buzz. In this landscape, the product alone is no longer enough to ensure success. Growth is increasingly driven by the ecosystem surrounding the product. A loyal community built through authenticity and dialogue, coherence between the influencer’s persona and the product’s values, compelling storytelling, impactful packaging, and flawless implementation in stores all sustain momentum beyond the initial buzz. Social-born brands demonstrate how creators can successfully convert online influence into tangible market performance. For instance, MrBeast’s Feastables (a line of creator-branded chocolate bars and snacks) leveraged his 430 million YouTube followers to turn content into commerce, achieving €2.4 million in revenue over just three months in France. Similarly, Franui (a frozen snack of chocolate-coated berries), a chocolate brand launched primarily through social media campaigns, generated €2.7 million in sales within 3 months according to Nielsen data. Meanwhile, Lindt Pistachio a limited-edition product following the “Dubaï chocolate” trend launched through a social-driven campaign, reached nearly €3 million in revenue in three months in 2025. These examples highlight that social-born products are not only viral phenomena but also significant revenue drivers, demonstrating the concrete market impact of creator-led and socially activated innovations. Nielsen insights reveal that consumers are changing faster than brands. They are moving from influence to functionality. Shoppers still seek inspiration, but they now demand proof over promise. Composition, origin, transparency, and sustainability have become decisive factors. Influence remains a powerful lever, but it must now be grounded in authenticity and credibility. The brands that succeed are those able to blend emotion with evidence, turning storytelling into a tangible experience. In this fast-moving environment, continuous monitoring of social and market data has become essential to spot weak signals, anticipate trends, and adapt quickly. Generations Z and Alpha embody this new paradigm. Hyper-connected and fluent across multiple platforms, they grant attention only to what aligns with their values. Their loyalty is short-term and tied to experiences rather than brands. They join a trend, drive it, and move on once it fades. For marketers, the risk is no longer missing the next big thing; it is becoming invisible in a world where visibility is measured in seconds of scrolling. According to Nielsen, 70% of Gen Z consumers discover products online first, and over half expect to see digital engagement before encountering a product in stores. Despite the acceleration of digital channels, traditional retail remains essential for scaling. Social-born brands still rely on supermarkets and hypermarkets to reach mass audiences, but the sequence has flipped: audience now precedes distribution. At the same time, established FMCG players are experimenting with influencer-driven collaborations to reignite consumer engagement. This hybridization reflects a deeper shift. The balance between digital and physical, between virality and longevity, is being reinvented. The FMCG market is entering an era where success requires listening before speaking, proving before promising, and co-creating before selling. Social media have not just redefined communication; they have rewritten the rules of innovation itself. In 2025, brands no longer lead the conversation. Consumers do. Sophie DelcroixManaging Director, Green Seed France To get in touch with our France team Contact Us
The traditional Dutch consumer no longer exists
For many Dutch consumers, price still remains the most important factor in making food purchases. In the supermarket, price plays a key role. A whopping 81% of Dutch consumers cite this as the most important factor in a purchase, followed by quality at 61%. This is one of the conclusions of the report “Balancing between spending and saving: the hybrid consumer in 2025” by ABN Amro, in collaboration with Q&A Retail. But today’s consumer is no longer predictable. Where once there were clearer boundaries between bargain hunters and luxury enthusiasts, in 2025 we see a consumer emerge who effortlessly switches between these worlds. Sometimes they purposefully search for the lowest price, but the next day they choose a premium brand or designer product with equal conviction. This “hybrid consumer” is not consistent—they are smart, strategic, and situationally aware, seeking a balance between price, quality, brand, and convenience. In the report, recent research was used to explore the preferences of this hybrid consumer, what drives them in different situations and across various product categories, and how factors such as age and income influence this behaviour. Loyalty is under pressure It is important for retailers and suppliers to incorporate these insights into purchasing behaviour when developing brands, product concepts, promotions, product ranges and customer approaches. Loyalty is under pressure. The hybrid consumer isn’t necessarily someone from a higher income bracket with many options, but someone who uses their budget strategically. This strategic use can vary by product category and stage of life. The research was conducted in consultation with Q&A Retail among over 2,100 respondents, divided into five age categories: ranging from 18 to 26 years old to 70 to 82 years old. The five involved product categories were: Supermarket products, Clothing and shoes, Cosmetics and beauty, Home and interior, and Electronics. The conclusions below will primarily focus on food related behaviour. The research results show that 51% of the households who were willing to share this information have a gross annual income between €42,000 and €84,000. This seems sufficient to make choices, but not generous enough to always opt for luxury. Furthermore, 32% have a modal income of €42,000 or less, and approximately 17% have more than twice the average income. Nearly one in ten households has a state. It is striking that almost one in five respondents refuses to share their income level, a possible sign that purchasing power and financial status remain sensitive issues. Price and quality are most important Price and quality are by far the most important aspects for consumers when purchasing food products. Women are slightly more likely to be price-conscious, while men are more likely to choose quality or brand in some categories. But other aspects also play a role in consumer choices within each product category. Retailers must also consider this. The hybrid consumer is price-conscious, but doesn’t always go for the lowest price or a discount. Consumers have a pragmatic and goal-oriented approach to shopping. For example, 40% say they are willing to pay more for some products and specific features, but not for others. Across all product groups surveyed, the balance between price and quality clearly dominates consumer choices. Consumers are also flexible and context-driven in their choices: they alternate between inexpensive brands or private labels with expensive and well-known brands from the same category, depending on what they consider important at the time. Consider, for example, a family with an average income. They choose to do their weekly grocery shopping at a discounter to save money, but for special occasions, they choose premium products from a supermarket or luxury specialty store. This flexibility typifies the hybrid consumer: they switch when a more attractive purchase presents itself. Of the types of stores and online shops surveyed in the retail landscape—discounters, mid-range, premium/luxury—the mid-range stores are the most frequently visited by respondents. This also reflects the desire for good value for money. Quality, store brands, and convenience Price is therefore the most important aspect for supermarket customers. It’s striking that quality scores slightly higher than price in the highest income group. Brand plays a limited role, which, according to the researchers, also explains the rise of store brands in supermarkets; name brands are less important. Product availability is considered important by 28% of respondents. Furthermore, more than one in five say convenience of purchase and use is important. This is especially true for the youngest demographic. According to the researchers, this also indicates that many consumers consider online grocery shopping to be important. Proximity of a supermarket is an important aspect. “Nearly half of respondents consider proximity to the store crucial when it comes to supermarkets. This has everything to do with convenience, routine, and frequency of purchases. In those cases, proximity is convenient, and price isn’t always the deciding factor,” the report states. Millennials find sustainability important Finally, an average of 11 percent say that sustainability plays an important role in their purchases. This percentage is higher among millennials (born between 1985 and 2000) and the oldest group. “In conclusion, behaviour appears to be primarily functional and routine-driven when it comes to supermarket products.” Pim HaasdijkManaging Director, Green Seed The Netherlands Contact Us
Ready-to-Eat in Spain – a Rising Trend with Endless Development Potential
Significantly increased quality, healthy recipes, convenience, lack of preparation time, it’s “the trend to follow”, are some of the reasons we hear in surveys as to why Spanish consumers are so eagerly embracing ready-to-eat (RTE) meals. In the last ten years, Spaniards have passed from consuming 13 kilos per capita of RTE products to 18 kilos, a 38% increase, according to the consumption panel of the Ministry of Food. According to Kantar, the number of products available in mass supermarkets in Spain ready to eat and to consume at home or on the go (20% of the occasions and growing), has increased by 48% in the last 2 years with a significant penetration (1/5 of the population) already regularly consuming RTE meals. As regards availability of those products, not only the deli and gourmet shops are developing increased offers but importantly big supermarket chains as Mercadona or Carrefour are also devoting increased space to RTE products on the shelves of ambient, chilled and frozen sections. But the differentiator concept is to also have special zones with the RTE meals of the day to take out being cooked at the moment. Mercadona has 1,200 of these in 75 % of their shops (out of 1600 stores) and Carrefour does thes same in 200 of their big supermarket and hypermarket stores. Ambient, chilled and frozen solutions are being consumed across all Spanish households and quoting Grupo IAN (one of the main players in this league) a significant 95% of shoppers add a RTE product to their shopping basket. The big question is:Is the kitchen is starting to lose its central position of being the heart of the home? What are the strategic implications for other food and beverages offerings? Antonio Obieta Managing Director, Green Seed Spain
Low Prices Are Not Enough
In Sweden, discount retail has long been a growing trend through good times and bad: consumers are drawn to chains like Lidl, Rusta, Normal, Dollarstore and Willys. The idea that discount retail equals “low-end” is long outdated. Modern consumers expect more than just low prices. They expect quality, convenience, and a shopping experience. Today’s successful discount chains are retailers that manage expectations while delivering value. Take Willys, a pioneer in this transformation, introducing Modern stores, wide and varied assortments with well known brands, and strong private labels. Lidl has followed a similar path. Once a European chain, it now boasts stores that rival traditional supermarkets in design, experience, and even loyalty. ÖB (Överskottsbolaget), once a powerhouse in Sweden’s discount space, now finds itself adrift. Its brand still resonates with consumers as a low-price leader, yet its turnover has remained flat for a decade. The issue is relevance. The same stores, the same assortment, the same positioning since its start – it’s as if the chain has frozen in time. Meanwhile, competitors have expanded their ranges, reimagined their formats, and repositioned themselves as more than just discount destinations. For ÖB, maintaining a strong price image hasn’t been enough to drive success. We see the same for Danish discounter Coop365 that has copied its competitors but not been able to make the concept relevant even though they have modern stores and a sustainable assortment. They miss out on bringing in major brands and their range is not varied enough in my view.. A good price image might get customers through the door, but it won’t keep them coming back. In today’s market consumers want their discount experience to be efficient, enjoyable, and aligned with their lifestyle. They want stores that understand them. Chains like Dollarstore have responded by broadening assortments and catering to a wider range of needs. Biltema has evolved from a specialist in car parts to a one-stop family destination. And Lidl is no longer just the place for bargain groceries- it’s becoming a reliable weekly staple, building loyalty in a space once dominated by impulse-driven visits. Retailers who fail to evolve will find themselves outpaced not because consumers no longer care about price, but because they care about much more. In the Nordic markets, the future belongs to those who understand that low prices are a must but not enough. Winning means staying relevant, agile, and attuned to a shopper whose expectations never stop changing. If you do not develop continuously the danger is that consumers will leave you for another alternative around the corner – and there are plenty of them. Jakob True Managing Director, Green Seed Nordic
The boom in plant-based foods – What opportunities still exist?
I started working here at Green Seed Germany 18 years ago. Ever since then, plant-based has been a focus category for our office, even if this food category did virtually not exist as such back then. Today, the German market for plant-based food products is worth over €2bn. A large amount of food start-ups – 1,987 to be precise – are in business in this segment. Meat alternatives (approx. € 1bn) and plant-based milk (approx. € 800m) are the most important and competitive sub-segments, but increasingly saturated. Many brands have come and gone. Nevertheless, international companies are still interested in entering the plant-based market – we are contacted for help on a regular basis. Apart from “how long does it take to get on shelf?”, most questions are centred around these topics: 1. Which are the current trends and drivers we can make use of? 2. Yes, we are late to the party, but is there still room to grow? 3. We know Germany is difficult, but how can we enter and develop this market successfully? A detailed answer to these questions would obviously go beyond the scope of this article, but let me at least share a few insights: Current trends and drivers The continuous growth of plant-based products in Germany can be attributed to several key factors: Health Consciousness: An increasing number of consumers are adopting plant-based diets due to the associated health benefits. This trend has started well before the pandemic. Environment: Germans have always been very environmentally conscious. Plant-based is seen as a way to reduce greenhouse gas emissions, conserve water and lower land use. Animal Welfare: Ethical concerns regarding the treatment of animals in industrial farming have driven a significant portion of the population to turn to plant-based alternatives. Innovative Products: The market has seen an influx of those. They cater to diverse taste preferences and dietary requirements, making it easier for consumers to make the switch. A restriction to the above is price. Overall, Germans are once again focussing stronger on price and are not open to expensive, new innovations. Room for growth in the plant-based food market As the plant-based food market is continuously evolving, there are several opportunities for growth and expansion. Although plant-based food products are becoming more mainstream, they are often priced higher than their animal-based counterparts. German consumers are very price sensitive, i.e. making these products more affordable and accessible is vital to achieve wider acceptance. Many players are focussing their efforts on economies of scale and continued innovation in production processes. Even in the largest sub-category, meat alternatives, there is still potential for expanding product variety, with improved taste, texture and a cleaner ingredient list. Within dairy, cheese alternatives are still underrepresented as well as plant-based spreads or desserts – getting the flavour right will open doors. In virtually every food category you can find a few blank spots to fill a gap, if you analyse the segment and examine the existing product ranges closely. However, wait a bit until you launch frozen meat alternatives. Recent listings and tests from Quorn and Like (Livekindly) have not been encouraging. It will be interesting to monitor the impact that new technologies and processes such as cell-cultured, 3D print and fermentation will have on the plant-based market. Practical advice We are all in agreement that Germany is a difficult market, but many companies have managed to succeed. Here some hands-on advice how to overcome a few barriers based on observation as well as experience: Carefully analyse your competitionYou might not be able to play on the same USPs like in your domestic or other export markets. Send only final versions of plant-based food samples If you are currently improving taste and texture, finish developing this 2.0 version. Only then send samples to buyers. Otherwise, you will risk that they reject your product based on taste and texture performance. It is difficult to get a second chance in the short-term. Financial muscle for the German market Ensure you have a solid financial strategy to be able to maintain the momentum once you achieve listings. You need a budget to support your products on shelf and to keep your listings, in particular with the Edeka and Rewe independents, which require a field sales force. If you are a brand, you need enough financial scope for substantial brand building. Timing is everything As in any other category, buyers and consumers alike need to be open for new concepts. Mycoprotein-based products have been around for decades in the UK. In Germany, this ingredient is becoming increasingly important as a sustainable source of protein, particularly in the area of meat alternatives. This advice is obviously valid beyond the plant-based food category. If you have any questions or want to obtain more insights, please get in touch with me: nguenther@greenseedgroup.de Nicole Guenther Managing Director, Green Seed Germany Source market data: Lebensmittel Zeitung January 17, 2025
America’s #1 Natural Products Trade Show: Expo West 2025: Key Themes and Insights
Expo West, the premier natural foods expo, took place from March 4-7, 2025, at the Anaheim Convention Center in California. This year’s event drew over 65,000 attendees and featured more than 3,200 exhibitors from around the globe. The expo served as a dynamic meeting ground for brands, retail buyers, investors, media, and industry leaders within the CPG ecosystem. The combination of new ideas, great food and beverages, emerging trends, and the Southern California sunshine made it an inspiring experience. Trade show attendance is a critical component of the trade marketing plan when launching in the US market. Our Green Seed sales and marketing team support our client brands exhibiting at the show, making introductions to important retail buyers and facilitating networking opportunities that help drive US business growth. Personally, having attended Expo West for 13 consecutive years (with the exception of 2021 due to COVID), I wanted to share key observations from this year’s event: 1. A New Era of Discipline A noticeable shift in industry dialogue defined this year’s show. Brands are increasingly focused on unit economics, retailer profitability, and strategic scaling. The once-prevalent “growth at all costs” mindset has been replaced by a more disciplined approach to expansion. With a sharper focus on differentiated value propositions, consumer engagement, and financial sustainability, this newfound discipline is setting the stage for a stronger generation of brands in the years ahead. 2. Navigating Uncertainty with Agility Economic uncertainty, influenced by shifting government policies, was a major talking point across the show. From tariff fluctuations to rising commodity costs, brands are no longer viewing these challenges as uncontrollable forces. Instead, they are actively scenario-planning, developing agile responses, and adjusting strategies in real time as new clarity emerges. This proactive approach underscores the industry’s resilience and adaptability in a rapidly evolving marketplace. 3. The Rise and Rise of Insurgent Brands One of the most inspiring aspects of this year’s Expo was the continued rise of insurgent brands—companies that have been quietly refining their craft and are now emerging as category leaders. Brands like Rip Van Wafel, Goodles, and Violife exemplify this trend, continuously innovating and strengthening their core offerings while strategically scaling through consumer engagement and selective distribution expansion. These brands are proving that sustained success comes from balancing innovation (on their core and new items) with disciplined execution. 4. Protein in Everything The demand for high-protein products has been growing for years, but the rise of GLP-1 drugs is pushing this trend into overdrive. From protein-dense desserts and yogurts to snacks and ready meals, Expo West was packed with new offerings in this space. A standout newcomer is David, the latest venture from RxBar founder Peter Rahal, which delivers 28g of high-quality protein with only 150 calories—a testament to the continued opportunity for innovation in this category. 5. A Thriving Community Beyond the product trends, one of the most valuable aspects of Expo West remains the connections forged at the event. The show continues to foster a dynamic community where brands, retailers, and industry veterans come together to exchange ideas, offer support, and provide alternative perspectives. The level of engagement from retail buyers this year was particularly notable, signaling that they, too, are prioritizing brands with strong fundamentals and compelling, differentiated offerings. Expo West 2025 reaffirmed that while the natural foods industry continues to evolve, its foundation remains rooted in innovation, discipline, and community. As brands refine their strategies in response to market dynamics, those who embrace financial discipline, strategic agility, and authentic consumer connections will be best positioned for long-term success. Looking forward to seeing how these themes unfold in the coming year! If you have interest in building you US business, exhibiting in any US trade show and would like some inside advice, please email me: sanjay.panchal@greenseedgroup.com Note: All data and observations are based on the Expo West 2025 event held in March 2025.
Who Wins, David or Goliath?
When the office of one of our smaller markets – Green Seed Nordic, based in Denmark – shared their outrage at Donald Trump demanding Greenland, the Green Seed Group WhatsApp group went into overdrive. As a close international network, we share clients and ideas, and support one another in many different ways. We even considered renaming ourselves the ‘Greenland Group’ for a day in solidarity! This made me think about how little v large operates in the food and drink industry and whether, and if so, how size matters. Markets Firstly in choice of export markets. If there’s one clear lesson we can draw from our experience it’s that size of market does not necessarily equal sales potential. A decade or more ago it was fashionable to chase BRIC markets and UK government initiatives and subsidies focused much more on markets like China than those nearer home. Yet our exports to markets like little old Belgium were still greater than the total shipped to Brazil, Russia, India and China. And trade focused smaller countries often punch above their weight with their own exports too – The Netherlands being an excellent example. Geographical proximity helps. One of the key arguments put forward against Brexit was that countries naturally tend to do much more business with closer markets (whatever the potential attractiveness Trans Pacific trade partnerships). It’s easier to understand markets and customers you can visit in hours, and easier for EU retailers looking for innovation to take a look at what’s new in in the UK to identify trends and source potential suppliers. Direct supply to end customers can also be possible, leading to stronger relationships and more competitive pricing. Better to take a laser-like focus on a niche opportunity and execute well, than be seduced by markets with much bigger populations, but a harder to reach target demographic. Brands Turning to brands, in the UK recent history for smaller challenger brands has been, appropriately, ‘challenging’. But their prospects might be improving. Pre pandemic, legacy players found organic real growth hard to come by. New brands began to pop up offering ranges with a greater emphasis on sustainability, clean ingredients, health and plant-based solutions, highlighting their credentials vs the less than ideal propositions of the Goliaths in their category. And they could fight on a more level playing field of social media and direct consumer engagement, which began to assume greater importance over traditional and costly advertising. Covid came, which boosted online sales for many. But more impactful was the real hit to hard won retail distribution gains as supermarkets delisted smaller companies while boosting order volumes of larger brands to ensure product availability. Since then inflation and cost of living pressures have been the dominant themes in grocery, putting more pressure on (often) higher priced products from challengers. But things are beginning to change: retailers have realised that fighting on price alone just plays into the hands of the discounters, that they need to show they offer something different and communicate that to their shoppers. This is where challenger brands can begin to help them to attract new shoppers to their stores with innovation or better for you solutions. What’s more, after some criticism of earlier versions producing very few permanent listings, there now seems to be some momentum behind incubator and accelerator schemes offered by the multiples to help brands develop and learn how to do business effectively, and retailers to test innovation, suggesting it’s more about longer term business development for all, than just a PR tool for big retail. 2025 will be the year of the challenger brand – or so believes YF, a consultancy previously called Young Foodies. Whether that’s a well calculated prediction or just an expression of determination, we’ll have to wait and see. For those that have something genuinely different, can demonstrate agility and powerful consumer connections – and with a strong financial base – it just could be. Size alone won’t be the deciding factor. Simon Waringswaring@greenseedgroup.co.uk
Don’t forget about us! Underexploited opportunities for food brands.
A recent GFK study in Belgium showed that 59% of all consumers are over 50 and responsible for 62% of total FMCG sales value, and they drive the value and volume growth. In the coming decades the population will age further making these older consumers even more important. Whilst this is a Belgian study, this trend is valid for many Western countries. But has this group become the key audience for food producers? New product launches are still aiming predominantly at Millennials or families with children. Product launches are supported on the latest social media channels, not exactly where the older generation is most active, and start-ups often focus on the newest and trendy product for the 18-35 year group. A growing consumer group combined with a buying power which is often higher should make these senior citizens an interesting target group. Obviously, over 50 is too large a group to capture as one consumer. The 50 – 75 bracket has different needs than a senior of 85+. The food and drink industry is witnessing a significant shift in consumer demographics, with the ageing population representing a growing and influential market segment. As the global population continues to age, there is an increasing demand for products that cater to the unique needs and preferences of older consumers. Product development in this sector is not only essential but also an opportunity to enhance the well-being, satisfaction, and convenience of older adults. Older consumers often face changes in their dietary requirements due to health conditions, reduced mobility, or altered taste perceptions. Nutritional needs may shift towards products that support bone health, heart health, cognitive function and digestion. Furthermore, many older adults have specific dietary restrictions due to medical conditions such as diabetes, hypertension or lactose intolerance. As a result, there is an increasing demand for food and drink products that are low in sodium, sugar or fat, and that are fortified with essential vitamins and minerals. Companies must innovate to create more user-friendly options, such as ready-to-eat meals, snack packs and liquid supplements. But don’t only focus on the functional part of food and drink. This age group wants to enjoy life, to eat quality and tasty products and is prepared to pay for it. For retailers these products can offer healthy cash margins. And why not premium indulgence products? All year round, not only at Xmas. Packaging and labelling will need to follow. Clear, easy-to-read labels with simple nutritional information and instructions can significantly enhance the shopping experience for older consumers. The need for product development aimed at older consumers is not merely a matter of addressing health concerns. It’s about improving their quality of life and ensuring they can continue to enjoy food and beverages without compromising their well-being. By investing in research and development, food and drink companies can better serve this growing demographic, create new market opportunities, and build a loyal customer base. So, to food and drink producers and their NPD team: the development of flavourful, yet healthy options, is welcomed. The mature consumer such as the undersigned will thank you. Happy New Year! Philip Horemans To get in touch with our Belgium team Contact Us
The latest sales trends and developments
Distrifood magazine provides a monthly overview of supermarket figures based on data from market research company GfK. This includes developments such as total supermarket sales, online sales, Sunday and evening sales and the share of private label. So far this year, supermarket sales have grown moderately. There have even been periods where sales have been lower than last year. This is problematic in the light of food inflation. Periods 6 and 7 have been the weakest so far for Dutch supermarkets and the impact of the tobacco ban, which came into effect on 1 July, is clearly reflected in the figures. However, a slight recovery in sales can be seen in period 8. Online sales as a proportion of supermarket sales have started to rise again, peaking at 8.7% in January. For the current year, this share has fluctuated between 7.9% and 8.7 %. The online share has increased from 7.7 % a year ago to 8.0 % now. With a revenue share of 7.9 % up to period 7 and several times above 8 %, Sunday shopping is becoming increasingly important in the sector. Conversely, the importance of promotions in supermarket sales has decreased compared to last year. Period 6 had the lowest share, while it increased slightly in periods 7 and 8. The share of private label continues to grow, exceeding 50 % in 2023. In addition, the importance of evening sales increases, reaching 8.3% in the current year to period 8 inclusive, and a peak of 8.7% last summer. To get in touch with our Netherlands team Contact Us
Frozen Foods, a category with a real future
The Frozen Food retail sector in Portugal increased by 13% in value to £1.57 billion over the last year, and by 6% in volume. Consumers recognize that frozen foods can last much longer if kept under correct conditions while also saving them time by reducing the frequency of shopping trips. Moreover, we have to add that they are now often more fresh, sustainable and packaged in an eco-friendly way. For example frozen fish certifications such as the MSC (Marine Stweardship Council) reassure consumers that catch practices are sustainable. And these combined with FAS practices (Frozen @ Sea) provide evidence that the fish they will eat is safe and as fresh as it gets. In terms of preservation, blast freezing processes retain the freshness of the foods from the collection point or production date. The growing concerns with eco-friendly packaging have driven manufacturers and retailers to demand FSC Certification. Another increasingly hot topic today has to do with food waste. Recent research demonstrates that it is possible to refreeze the product after thawing, provided adequate defrosting processes were used, which is particularly important for raw products. So, consumers have enough time to consume due to longer shelf lives and can refreeze part of the raw ingredients which have been thawed. A great advantage when compared to chilled foods as far as food waste is concerned. Other than the traditional categories such as raw foods, ice cream or vegetables, ready meals and meal components are increasing their share in the frozen aisle. The challenge for manufacturers is that the freezer cabinets are not easy to expand and new items will come at the expense of the space of existing ones. Other than a few leading powerful international companies, it is the retailer who is taking the lead in terms of innovation and assortment. That is why private label is almost a pre-condition to do business in the sector. And the PL sector is increasingly segmented allowing the development of specific niches that cater to consumer clusters. So, despite the above restrictions there could be opportunities for smaller players if they can cope with retailers’ demands and offer the required quality and differentiation at the right price. To sum up, frozen foods will continue to expand as a sector within the supermarkets and so will the space allocated to it. We will also see the development of shops that will only sell frozen products either generic or specific to a category. That will be the case with premium meat retailers, as is already taking place in the US. The major drawback is still the consumer’s journey back home which can affect the products’ condition due to the lack of suitable bags combined with weather conditions and longer journeys. This is something that retailers need to address – with home delivery being one solution. Or indeed by designing containers that provide safe transportation and can be returned to the shop once used. Luis Garcia, MD Green Seed Portugal To get in touch with our Portugal team Contact Us
Consumer behaviour highly resilient in the face of changing market situations
Over the last few years we have seen turmoil in the international political and economic environment which has directly impacted the short- and mid-term behaviour of both consumers and trade. One only needs to think of the conflict in Ukraine and the dramatic influence on raw material prices leading to huge price inflation in and outside the food sector. Or more recently the very high impact of exploding worldwide cacao prices. Despite all of the above it is interesting to see how in time consumers seem to be highly flexible and strongly resilient in the way they adapt to the new situation. The Dutch branch of consultancy Deloitte have identified top trends among consumers in their latest annual consumer behaviour report with some interesting findings: Reducing concerns about increasing prices Where in 2023 89% of Dutch consumers claimed to be very worried about increasing food prices this percentage decreased for 2024 to 83%. While still high in absolute terms, shoppers explain their reduced worries due to changes in behaviour by their ability to buy cheaper products e.g. own label products and products more often on promotion. Increasing use of loyalty cards The percentage of people using loyalty cards is growing. Some 69% of consumers say they use a loyalty card at their primary food retailer, but even 49% now use a loyalty card at their secondary choice store (and even 39% at their third). Retailers are growing their insights into the buying needs and behaviour of their different consumer groups. High penetration of self-scan Self scanning has a high penetration in Dutch food retail but this penetration is growing further. 81% of consumers are using now self-scanning vs. only 74% 2 years ago. Already 9% are using their mobile phones to do so. Minimum order amount for online delivery is less of a barrier The online share of the Dutch Food retail sector keeps growing. This is caused by several reasons but an important one is that for more and more consumers the required minimum order amount for home delivery is less of a barrier allowing more consumers to star using this service. Reduction of meat consumption is losing popularity The percentage of Dutch consumers claiming to reduce their meat consumption has decreased from 38% (last year) to 33%. At the same time consumers are also buying fewer meat alternatives (from 40% last year to 34%). In an era where plant-based and Vegan are so strongly promoted this is quite an outcome. These trends in consumer behaviour show that consumer shopping and consumption habits change both in line (but sometimes contrary) to overall market and social developments. Let’s not underestimate their resilience. Pim Haasdijk, MD Green Seed The Netherlands To get in touch with our Netherlands team Contact Us
Why a sizeable number of Italians will buy branded products only when they are on promotion
52% of Italians say they buy branded products only when they are on sale, on promotion or discounted, while private labels are gaining ground precisely because, for 55% of the population, they are better value. Furthermore consumers plan to buy more private label in the future, especially in the home care (50%) and packaged food (33%) segments. This trend is revealed by data from the EY Future Consumer Index, which surveyed the opinions of 23,000 citizens around the world on several topics. The reader should bear in mind that the sample in Italy totals 500 individuals and that therefore the results should be read in terms of the trend illustrated rather than the precise percentage. It is also confirmed by what we see on weekly basis in the negotiations with retailers where there is an increase in the demand for promotions (in store and on line) and for extensive price cuts. One of the trends that emerges from the survey and that is linked to the area of spending is the contribution of influencers, creators, bloggers or vloggers (now increasingly regulated by law) in purchasing decisions. These figures have a significant role in the decision-making process, so much so that 51% of respondents rely on products recommended or promoted by influencers, while 43% admitted to having made a purchase exclusively on the basis of such a recommendation or promotion. This is taken in considerations and included in the marketing budgets allocated on all brands we deal with at Green Seed Italy. Tools and technologies are also changing the spending scenario. Consumers’ preference – especially Millennials and Gen Z – for using shopping apps is transforming the retail landscape, also generating new opportunities for brands. Amongst the main reasons for using apps includes the desire to access exclusive discounts and offers (50%), greater convenience (45%), and attraction to promotions or offers reserved for app users (34%). This data highlights a significant change in consumer purchasing behaviour, as they feel increasingly comfortable sharing personal data in exchange for personalized experiences and recommendations on possible alternatives. However, despite the enthusiasm for new technologies, people remain cautious about the security of their personal information: 62% of respondents are concerned about how their data is managed while 63% fear a breach of their data and hacker attacks and 70% fear identity theft or fraud. Economic accessibility is the dominant priority, in line with the behaviour highlighted above. However, the survey also shows that sustainability remains a key area of interest for consumers, especially Italians. This leads 95% to make an effort not to waste food and 58% to regularly recycle or reuse products after use. 35% of consumers are increasingly oriented towards purchasing second-hand items (a growing market), and 74% will try to repair, and not replace, if possible to do so. As for attention to health and well-being, which is also on the podium of priorities, 73% expect to be more aware and attentive to this issue in the long term, for example by preferring the purchase of healthy products (42%), but also by reducing the purchase of alcoholic beverages (51%) or tobacco in the coming months (46%). Sauro Musiani, MD Green Seed Italy To get in touch with our Italy team Contact Us
The global decline in innovation: a threat to the attractiveness of retail markets?
Innovation has been a key driver of growth and diversity in global markets for many years. However, a significant decline in innovation in the food industry is now threatening the wealth of choice available to consumers and the economic vitality of SMEs. Last year in France, according to Circana, new products accounted for just 0.6% of food sales in retail, 4 times less than five years ago. Innovations, levers for development In 2023, according to ProtéinesXTC, despite a slight recovery, global food innovation grew by only 3.9% (VS -12.7% in 2022), well below expectations, while in France, it grew by 8.2% (VS -23.3% in 2022). In France, “pleasure” is by far the most important aspect of food innovation at 61% and continued to gain ground in 2023 with +3.8 pts whereas the rest of Europe is “only” at 54%. This means that bringing pleasure to consumers must be a key factor in the development of innovations. Health is in second place at 17% but lost interest with a drop of 4.1 pts. French people are not as much interested in the health aspects as the rest of the Europe (24.2%). Ethics and convenience round out the reasons for purchase, with an average of 7% each and a fairly stable trend in France, rates that are similar to the rest of Europe. The main barriers to innovation The barriers to innovation are numerous and often interdependent: Financial risks: Innovation is costly; commodity prices have risen sharply as a result of a number of crisis (Covid-19, geopolitical conflicts, climate change), making R&D investments riskier than ever. Whereas before 2022, the one-year mortality rate for food innovations was 80%, “non- essential” innovations are now simply no longer being launched. Consumer demands: Consumer expectations are increasingly high. They are indeed more concerned about the costs of their purchases with inflation, as they still want quality products at the lowest price possible. This increases the complexity and cost of developing new products, which are on average 30% more expensive. The impact on SMEs According to Circana, the ranges of national brands fell by 2.9% compared with the previous year, while the range of value line products rose by 7.7%. Small and medium-sized enterprises (SMEs) were particularly hard hit, with their shares of supply falling to 3.9%. Unlike large groups, they have limited resources to invest in long-term projects with no guaranteed return on investment. As a result, SMEs risk losing competitiveness and, in some cases, disappearing from the market. Consequences for the market and consumers The decline in innovation has a direct impact on the diversity of products available to consumers. Less innovation means less choice, which can lead to a uniformity of products on supermarket shelves. Manufacturers, on the other hand, tend to focus their innovations on those that have the best chance of success. Moreover, the gradual disappearance of mid-range products in favour of low-cost or premium ranges is further limiting consumers’ options. Products whose positioning is not clearly fixed at one end or the other might no longer emerge. Conclusion To revitalise the market and meet consumer expectations, it is crucial that brands and retailers return to innovation. This will require both incentive policies and a stable economic environment. Innovation is not only essential for economic growth, but also for maintaining a diversified and attractive offer for consumers. Without this revitalisation, markets are likely to decline, to the detriment of the entire value chain. The future of innovation will depend on how to overcome these challenges and create an ecosystem where innovation can once again flourish, ensuring renewed diversity and attractiveness in global markets. The impact on SMEs According to Circana, the ranges of national brands fell by 2.9% compared with the previous year, while the range of value line products rose by 7.7%. Small and medium-sized enterprises (SMEs) were particularly hard hit, with their shares of supply falling to 3.9%. Unlike large groups, they have limited resources to invest in long-term projects with no guaranteed return on investment. As a result, SMEs risk losing competitiveness and, in some cases, disappearing from the market. Consequences for the market and consumers The decline in innovation has a direct impact on the diversity of products available to consumers. Less innovation means less choice, which can lead to a uniformity of products on supermarket shelves. Manufacturers, on the other hand, tend to focus their innovations on those that have the best chance of success. Moreover, the gradual disappearance of mid-range products in favour of low-cost or premium ranges is further limiting consumers’ options. Products whose positioning is not clearly fixed at one end or the other might no longer emerge. Conclusion To revitalise the market and meet consumer expectations, it is crucial that brands and retailers return to innovation. This will require both incentive policies and a stable economic environment. Innovation is not only essential for economic growth, but also for maintaining a diversified and attractive offer for consumers. Without this revitalisation, markets are likely to decline, to the detriment of the entire value chain. The future of innovation will depend on how to overcome these challenges and create an ecosystem where innovation can once again flourish, ensuring renewed diversity and attractiveness in global markets. Sophie DelcroixManaging Director, Green Seed France To get in touch with our France team Contact Us
Is price finally becoming less important?
One of the main challenges of entering the German market is the notoriously low price level. Today, food prices in Germany have reached a new peak. Does this mean it has now become easier to get on shelf for international food & drink producers? The Federal Statistical Office of Germany Destatis recorded an inflation rate of 3.8% for January, which was lower than in previous months. However, measured against the starting point in 2020, the index now stands at 133.3, i.e. an impressive increase of 33.3%. That is a new record value. Prices are therefore stabilising at a high level. This is a good sign. It will hopefully lead to more appreciation for food and drink. Unfortunately, this increase does not apply to all product prices. We are observing an unhealthy gap between brand and own label products, and it keeps on growing. Aldi and Lidl are lowering prices of many own label products, while prices of branded products are increasing. This puts manufacturers of branded products under even more pressure. Negotiations on further price increases with trade customers are ongoing but manufacturers have little hope for understanding from retailers – no matter the reason for these necessary increases. What will be the effect? It will probably further increase the already large gap between brand and private label products. This significant gap is creating a special challenge: Many brands are offered with an unusually deep discount. The mistrustful German consumer perceives this as deception. Even retailers admit that the price difference is difficult to explain. If products are offered at a discount of over 60% (20% would be standard), the standard shelf price appears to be completely out of proportion. Consumers do not view them as a benchmark anymore and do not buy the products at the high standard price. This messes up retailers’ calculations, which require a stable standard business to sustain margins. How can this be solved? We have heard about the odd manufacturer of branded products that – of their own accord – has suggested a lower recommended retail sales price to reduce the price gap. Not such a good idea and certainly not feasible for many brands. A step in the right direction is taken by retailers that create awareness for products that are not on promotion by featuring them in the sales leaflets with “from our range”. Another positive occurrence is the usage of FSDUs or off-shelf placements, even if the product is not currently on promotion. These measures are a welcome change, as they do not focus on price. Something that more retailers should have done a long time ago: focus more on reasons for consumers to buy a product that are not based on a low price. The results from the shopper trend survey carried out with app users by Bring Labs show that German consumers are currently paying even more attention to quality and animal welfare than to the cost of products when shopping for food. Together with the mega trend of sustainability, as identified by consumer research institute Gfk, I would like to be cautiously optimistic that price is finally starting to lose some of its power and that consumers are shifting for good towards quality. No matter how all this will pan out, food & drink companies that want to enter the German market will still need patience, perseverance and a good plan after analysing the competitive set, fine-tuning USPs, adapting packaging weight and creating a bespoke German range. Nicole GüntherManaging Director, Green Seed Germany To get in touch with our German team Contact Us
The United States of Easy
Developing a food business in the US has never been easier when operating from overseas. With online customer driven technological advances and online marketing, starting up and building a US food business has become more straightforward over the 25 years I have been living and working in the US. As the US is such a huge market and a physically large country, even back in 1999 when I first set up the Quorn foods US business, I noticed cultural differences with UK and European markets. Even back then, in the US people depended on fewer face to face meetings, relying on telephone conference calls to get things done. Remote located sales teams were commonplace allowing closer proximity to retail customers. Today this is even more so the case. It’s possible to start up your business by registering your US limited liability company located from overseas, no US citizens are required. Video conferencing with a retail buyer has become the norm since the pandemic, straightforward to join from overseas. Although you will need to have some local representation with a sales agent or broker to pick up day to day matters. Also, you’ll need to ensure samples are smoothly distributed state side, with tracking to manage timeliness. Supply chains importing and distributing products are very well established with online data and tracking that enables easy overseas management. US banking can be set up with online visibility, and in the past decade, finally most US customers are sending money transfers rather than an old-style paper check! Customers now provide online portals for suppliers, allowing visibility to sales, promotions, payment and deduction management. Trade and consumer marketing activities are almost completely online with websites, social media and digital couponing overtaking traditional physical media. So how do you start the process doing business in America? First, I would recommend you set up a video call with Green Seed North America to discuss the viability of your brand and the US specific trends in your category. Ask the locals if there is a gap for your product. Then I would arrange a market trip, to a bigger city like New York or Chicago and visit some supermarkets to look at your product within the context of the category. Do you have a point of difference and how does the pricing look? Then I would suggest buying market data to understand the national picture and determine the size of the prize, to help you develop a market entry plan. Also consider attending one of the bigger US trade shows like Expo West or Fancy Food, to get a closer look at the competition. The US market today is structured in a way that it can be overseen and managed remotely from your home market. You will need some local advice on planning and you will have to set up US based third party relationships covering key business processes. In short, a US retail food business can be managed with just one trip a year, and plenty of video calls and emails. David WilsonFounder and Partner, Green Seed North America To get in touch with our North America team Contact Us
Have we now passed ‘peak purpose’ for food and drink brands?
For some years now, brands with a clear message about their purpose and commitment to meaningful change had something distinctive to lift them above the fray. But today being purpose-driven is the expectation, brands have to offer more to succeed. Pre pandemic, legacy brands were finding growth hard to come by, while startups began to carve out a role for themselves in the grocery arena. SMEs with a clear message about ethical ingredient sourcing, minimal processing and environmental responsibility exposed the sometimes less than optimal approaches taken by their bigger brand competitors. Their messaging chimed with consumers, and buyers took notice. Many invested a significant amount of their seed funding in branding and often skilfully took advantage of the rise of social media to engage with shoppers – often so much more authentically than the big beasts they were up against, whose traditional approach to big marketing investment to preserve and grow share had served them well to date. Retailers gave full listings to some and trial exposure to others, via initiatives such as Future Brands from Sainsbury’s, with brands ranged on a special fixture in a limited number of outlets. B Corp Many have gone through the B Corp certification process. Of the now 1400 B Corps in the UK, some 200 are food and drink businesses (The Grocer July 2023). The vast majority of these are SMEs and startups. While achieving this accolade is of course a source of pride and a great story for customers and suppliers, another key benefit is joining a close-knit community and advisory network. But many in the B Corp community were less than happy when Nespresso became accredited, citing parent company Nestle’s human rights record – and were also concerned that multinationals could now achieve the same recognition as purpose driven startups. Others (including in the B Corp community) would equally argue that the best way to effect global change and for business to be a power for good is to have big companies on board. Investment Climate The investment climate has also changed significantly since the heady days when DTC growth surged, low interest rates seemed like they might last forever and new food brands with a compelling growth story (never mind the non-existent profits) could readily find investors. Nowadays, however purpose driven brands may be, if they cannot demonstrate a resilient business model, combining strong sales growth with a clear route to profitability, they will not pass the test. Topline growth is all very well but without gross margin and a focus on EBITDA investors will look elsewhere. Challenger brands do not have it easy. There are few markets as competitive as UK grocery, so it’s hard enough in the first place to get the attention of buyers, assemble the right commercials and marketing mix to win limited space available away from established brands – and then to stay listed into the medium term with constant sales growth. Throw in a pandemic – when retailers paused or delisted many in favour of their bigger suppliers able to guarantee levels of stock – and a more discerning investment community, and things are harder still. Brands who realise that purpose and sustainability are table stakes and who have a clear-eyed plan for profitable growth will be the ones to attract buyers and investors – and likely still be on the shelves in the years to come. To get in touch with our UK team Contact Us
A cry for innovation
Retailers are rationalising their assortments and FMCG producers are launching fewer innovations. The result is an erosion of the consumer offer. According to the research company Circana in 2022 carried out in 6 major European markets (UK, Germany, France, Spain, Italy and the Netherlands), a drop of over 16.5% was noticed in new product launches – and in France the decrease was even over 30%. Both retailers and producers are concentrating on their core ranges to safeguard their market share. Cost price increases have dominated the retail debate for the last 24 months. The P&L has come under scrutiny especially on production costs, the retailers are wanting to safeguard their margins and the consumer has become even more price conscious due to a reduction of buying power.Bigger brands in particular launched fewer new products onto the market. Medium and small sized companies were the innovation drivers: 75% of new launches and 68% of innovation turnover was generated by SME’s. The tough retail stance vs low rotation products has made it even more difficult for newcomers to succeed. New product launches need time to be picked up by consumers, time which is no longer given by the multiples. This is proving to be short term thinking. Sustainable growth is only possible with a good degree of innovation. New products drive consumer demand. Brands need new product launches to grow and protect their market share. The alternative is a fight for market share on price. And in the end only those retailers which have price as a key cornerstone of their business, soft and hard discounters, are the winners. Mainstream retailers with a DNA of originality, quality and differentiation lose in the end. And with them the suppliers. Supermarkets become too much of the same and the curious consumer, often a food lover, feels abandoned. Medium and smaller companies are more flexible, more entrepreneurial and often more creative. But their inventions need to get the chance to get onto the shelf. With an overly conservative retailer attitude, these innovations simply don’t get the chance to prove themselves. It is a killer for the start-ups and puts medium sized food companies under serious pressure, jeopardizing future innovation. Companies with a drive for NPD should be supported. Retailers should shift their focus back to dynamizing their categories in store. Margins, healthy rotations and innovation can go hand in hand. It simply needs a bit of courage. To get in touch with our Belgium team Contact Us
Should we worry for the future of International A-brands?
It looks like leading International A-brands in particular are currently becoming more and more under siege. A development that is of potential concern given that the NPD power of these type of brands is highly important for the general future of the food sector (both for retailers and for suppliers). Should we therefore worry? In these times of high inflation and tight budgets, consumers are exchanging A-brands for Private Label products on a large scale. This is also influenced by the fact that more often independent product tests by local consumer organizations show private label products as the clear test winner which each time puts further pressure on the perceived intrinsic value of competing A-brands. The actual rise of new, modern, more intensive and effective, cross border, buying organizations is a further threat for suppliers of leading International A-brands. The main reason why leading Dutch retailers like Albert Heijn and no 2 Jumbo Supermarkets recently announced becoming members of different modern International buying groups (Albert Heijn in Eurelec, together with Rewe and E. Leclerc: and Jumbo in Everest, together with Edeka) is fundamentally to increase their commercial position vs. the leading A-brands. The fundamental answer that A-brands could give to these threats is to develop real innovations. However, A-brands are facing two main issues here. Firstly major innovations often take place in chilled and, apart from categories like dairy and meat replacers, often A-brands do play a more limited role in these categories as retailers increasingly claim these categories for private label. Secondly, once innovations are being launched they very soon get duplicated by a private label or budget brand. This has had a negative impact on the real NPD launches undertaken by A-brands in the last few years. Looking at innovations at the last Anuga most of these could be summarized as “more of the same”. Most of these could be clustered for a number of years under trends like “more healthy, clean label and plant-based” but nothing fundamentally beyond that. Real fundamental innovations like in the past Yakult and Becel Pro-Activ are missing in the current climate but would be vitally important for the food sector (retailers and Industry together) to drive the future volume growth in the food sector but also in order to safeguard the future profit contribution potential of the sector. It therefore is a very fine balance which international retailers are facing in dealing strategically with A-brands. On the one hand the increasing trading friction leading to further promotion of PL’s and stronger international negotiations vs. the need for A-brands to maintain substantial minimum volumes in order to finance the much needed core R&D investments.
New food and drink concepts post Covid which are here to stay
Diversification of food sources and primitivism as opposed to mass supply Today, 75% of foodstuffs come from just 12 plants and 5 animal species. In the quest for differentiation, the food industry is bringing new species of plants and seeds to market and expanding the horizons and experiences of consumers, in addition to recovering old processes or varieties in traditional plants deemed healthier or tastier. An opportunity to bring back lost flavours that new systems and processes are able to recover. Saving the planet, speaking the truth More than ever, people realize things must be done to slow the destruction of the planet taking place. Environmental free solutions, regenerative agriculture, industrial processes, ingredients and offsetting carbon emissions are key communication elements to secure consumers’ trust. Brands need to be more transparent than never, straight and objective. Buying / eating local is just a reflection of this trend. Eating and drinking healthier Living longer and healthier goes hand in hand with having good food and leisure habits. Health and environmental concerns are boosting veganism. But to be successful for a wider population, foods must taste as close as possible to the replaced products. While plant based is perhaps the best example of this, not all vegetable origin alternatives are more environmentally friendly than the traditional food stuffs they intend to replace. Also, some categories like canned foods that were thought dead a while ago, are coming back due to their perceived benefits such as preserving ingredients for longer and because of their convenience and potential for sharing. Another examples are de-hydrated fruits richer in antioxidants, mushrooms of all kinds, seaweed, non-alcoholic drinks with hydration benefits or fermented drinks such as kefirs or kombuchas to go with foods. All traditional categories need to be reinvented to address trends. De-construction of traditional meals The traditional paradigm of breakfast, lunch and dinner is over. The food and drink industry needs to take into account the changing lifestyle of consumers to be there at the time they are needed. Hence the potential for development of the snacking / food to go. Food platters and communality After being shut at home for so long, people are coming together celebrating life and partying more than ever which means sharing platters and buying products which suit that purpose. This is driving a demand for more innovation to surprise friends through new formats, cuisines or proteins. Suppliers cannot overlook these trends when designing strategies for the years to come, while retailers are on top of the game, by being closer to consumers with the ability to amass significant purchase data, which will inspire an increasingly relevant private label offering. To get in touch with our Portugal team below Contact Us
How artificial intelligence is already changing grocery retail
The tools offered by artificial intelligence for supermarkets are transforming how these businesses are managed in many parts of the world. This technology is capable of providing detailed information about consumers. From age, gender, tastes, and mood when visiting the store. In addition, it automates all processes to reduce the time it takes to be served and make purchases. As a result, it has become a crucial part of retail strategy and a growing trend that adds value. Artificial intelligence-based technology for supermarkets offers many benefits for both the consumer and the retail sector. Here are some of them: Personalized offers Retailers can make personalized promotions by possessing relevant information about consumers walking through the grocery aisles. They know their food preferences, whether they have food allergies, and what motivates them to buy a particular item. In addition, analyzing user behaviour allows them to organize products more efficiently. Consumers learn through various channels what the offers are and when it is convenient for them to buy. This approach creates a pleasant experience and attracts shoppers to the store. Monitor of inventory Artificial intelligence can also help supermarkets to monitor their inventory in real time. Robots solve problems related to goods, preventing them from running out of stock. Reduced theft Another benefit of AI is reducing shoplifting in retail stores, as it can detect unusual and inappropriate behaviour -whether among people visiting the store or the employees themselves. As a result, more and more businesses are incorporating computers that help security managers identify theft attempts. People flow control Future supermarkets will also control the number of people inside the store, thanks to this technology. Through special tracking sensors, they monitor the flow of people to avoid crowds that might bother shoppers. Currently, some retailers use intelligent traffic lights to direct the passage to certain areas. For example, a red light goes on when the number of people exceeds the pre-established limit. This is a signal that there is no access until the area is cleared. The green light indicates that there is sufficient free space or clearance. And it opens the door for other consumers to enter to view products and make their purchases. Payment optimization Retailers equipped with these tools offer streamlined checkout processes for all customers. Artificial intelligence can identify products placed in the shopping cart and automatically calculate the amount to be paid (like Whole Foods in the US).It then charges it to the user’s bank card, thus avoiding the need for them to wait in line to be served by a cashier. This does not necessarily make shop workers redundant as they can be redeployed as for example, as a host or advisor, so that consumers feel better served. The supermarket of the future? Today, many businesses are trying to adapt to this new trend to become more efficient and improve sales. Although online shopping has become commonplace, most people still prefer to look at items and touch them personally. For this reason, they continue to visit physical grocery stores. Retail Managers are looking to satisfy both types of customers. And the best way to do that is to provide them with good service and convenience when shopping in person. But there are challenges for the sector Implementing this kind of solution is a massive challenge for the industry because of the costs involved. The cost varies depending on the type of software, amount of data it processes, quality, level of intelligence, and accuracy of predictions. On the other hand, you need to hire the right talent and demonstrate that the data collected by AI will not be compromised. Abuse or lack of transparency regarding the use of customer data could affect your relationship with customers. In addition, many employees still fear being replaced by machines. Conclusion Despite these challenges, it is a fact that artificial intelligence for supermarkets is here to stay. The supermarkets of the future will be more innovative. Well-known grocery stores and grocery chains have already successfully integrated this technology. In Italy, for example, Esselunga and Conad have already implemented some of the solutions indicated in the article
Horeca and out-of-home consumption threatened by retailers in Spain
After the pandemic challenges faced by the 300,000 horeca outlets of Spain a new significant threat overcasts the out-of-home consumption industry. Four out of ten of out-of-home consumption occasions in Spain are no longer taking place in a food service establishment, bar or restaurant outlet. According to a newly issued Kantar survey, those occasions are taking place in the modern retail trade channel which was normally the one used to shop only for in-home consumption. Carrefour, El Corte Ingles or Mercadona supermarkets are the new competitors of the Spain’s 300,000 bars and cafeterias with their new “ready-to-eat” offerings booming in the last 4 years, representing already 3% of the total retail chains’ turnover. We have just learned (through Alimarket magazine in May 23) that Mercadona (the leader in retail with a 26% market share) already has 1,000 stores servicing ready cooked and ready to eat food. This business unit has achieved more than 1% of total Mercadona turnover at €323m in 2022. The ready-to-eat offer in supermarkets is increasing at a rate of 10% at the expense of decreasing sales mostly in the big fast-food chains, according again to the same Kantar survey. The paradox in this new pattern of consumption is the counterbalance in terms of sales switching from other out-of-home outlets which are not significantly being hurt by this trend, due to the appearance of home delivery operators (Glovo, Uber Eats, Just Eat, Deliveroo, etc.) who are dynamising the sector and have already reached a penetration of 3 million Spanish households in a short space of time. Quoting a survey recently conducted by Deloitte and other sources, the food-to-home delivery business could double in the next four years in Spain, helping the traditional food service outlets and restaurants to compensate for the decline in out-of-home consumption occasions produced by new social trends such as stricter drink drive enforcement, cable tv offers, increased average meal prices, etc. This transfer of locations and consumption occasions from one channel to the other and vice versa brings enormous challenges and has to clearly be tackled in order to benefit from all the opportunities arising. To get in touch with our Spain team Contact Us
Food innovations in freefall in France and around the world
The number of new food product launches has fallen by 12.7% across the world and by almost double this level (23% )in France, where the number has dropped from 3093 new products listed in 2021 to 2374 in 2022. This is according to the 26th Global Food Innovation Barometer conducted by ProtéinesXTC, after 18 months of the Covid crisis, followed by a considerable rise in inflation throughout 2022, in the context of the war in Ukraine causing supply difficulties. Furthermore over the last 6 years, the number of innovations has fallen by 33% worldwide. This decline is particularly marked in Europe, less so in the USA and Asia. Faced with the very uncertain context linked to Covid and then to inflation, manufacturers have been content to expand their ranges. We are now witnessing sharper sales decreases in national brands than in private labels. Nor have sales of new products performed strongly. According to Circana/IRI, in 2017 in France, the average turnover of an innovation was €503,000. In 2022, it fell to €363,000, a drop of 28% in 6 years. But what does the future hold for food innovations? At present, negotiations from both buyers and suppliers are almost exclusively focused on price. But what about the customer experience? In an inflationary context where innovation is blocked by price increases, national brands are focusing more on extending their ranges, a less costly process, rather than developing new products. However, if supermarket chains no longer offer innovations for all shoppers who are keen on new products, it is likely that they will seek them through other distribution channels. Offering new products at reasonable prices is therefore essential for retaining and developing customers. Moreover, we are aware that the last few years, a post-Covid context and the Ukrainian war period have left a strong and indelible mark on everyone’s mind. It is therefore important and necessary to ask ourselves how this context has had a deep impact on our way of life and what kind of new consumer trends will emerge. Today, the retail sector is being transformed by the rise of plant-based foods, food traceability and the adoption of advanced technologies to optimise the supply chain and reduce food waste. Importantly, a return to simple, healthy products seems essential so that these products are not just reserved for the highest social categories. The food industry has to strive to make the internal innovation process more efficient, to reduce production costs in order to be able to offer simple, healthy products at a reasonable price. And those retailers who are able to adapt to these trends will be in the best position to meet consumer expectations and thrive in an ever-changing and evolving market.
Closure stirs emotions
Last month Danish COOP decided to close Denmark’s oldest retailer: Irma. We saw consumers protesting, and the media reported that COOP had proved totally unable to run the Irma chain which it took over some 40 years ago. Two former Irma directors pointed out that COOP itself has driven Irma into a slump. On the other hand COOP´s own MD pointed out that quite frankly, there was no basis for continuing the Irma chain. His explanation for the decision appeared to be leadership. “Many mistakenly believe that Irma customers are just the kind of rich people who don’t care about prices and only shop in Irma. That is simply not the case. Irma shares the most customers with the discount stores, and the discount share among Irma’s customers has just grown and grown, so that an average good Irma customer now shops twice as much in discount stores as in Irma, which has become a supplementary store”. As someone who has written a thesis about Irma in particular, I can add some more personal views: Over the last 40 years there have only been a few profitable enough to build any reserves and Irma could not have survived this time period without COOP. When COOP bought Irma no other chains or groups wanted to take over Irma as discount was emerging. Various Irma managements since then have not been able to reformulate Irma into a long-lasting chain concept. Irma benefited from COOP’s economies of scale in logistics and purchasing volume but were not creative enough to set out a direction for a positioning that could lead to the chain’s survival. The iconic Irma director Børge Olsen, who developed the Irma chain to 160 stores (today 70 stores) instinctively understood “Mrs. Jensen´s ” shopping habits but. Irma has never tbeen he same since. Irma’s concept fits a different era, while consumers’ shopping habits have long since moved on. Perhaps because the business base was vanishingly small. Irma tried several times to open stores outside Copenhagen without success. if there are not enough customers for a given concept in an industry where margins are low and you are dependent on a large turnover, it unfortunately makes no sense to continue. And certainly not in a country that has among Europe’s largest coverage of grocery stores. A sad day, but an inevitable one too. To get in touch with our Nordic team Contact Us
Bye bye low prices!
Discounters are on the rise. Once again. It’s always the same old story in Germany when you look back over the last decades: in a recession, discounters gain ground and manage to keep that level until the next slump, moving up yet again, and repeat. The novelty this time is the parallel growth in private label across all channels and significant price increases, of course. 20% inflation on food and drink in Germany – this is unheard of! Notoriously low price levels of food products have always been a challenge for most exporters, for which we develop a market entry strategy here at Green Seed Germany. Will this change now? In light of rapidly soaring cost of living and higher food prices, Germans spent their money more carefully in 2022 and purchased to an increasing degree products on promotion as well as private label value products. The discount store format profited from this in particular, as consumers traded down to premium private label such as Lidl Deluxe in the run up to Christmas. Now is the time for manufacturers to explore private label opportunities in the land of discounters! Discounters now account for 43.7% of grocery retail turnover (IRI) or 36.9% if you include e-commerce and specialist trade (GfK). While the discounters will certainly maintain their strength once again, full merchandise stores still remain relevant to consumers. Another opportunity here, for brands: get innovation on shelf. Easier said than done. Instead of retailers and suppliers working jointly to get new products on shelf, retailers are lost in price battles with suppliers and aggressive price promotions with consumers. How much innovation will this cost us? One of our clients told me they had pushed through no less than five price increases for their branded products in the last 14 months in their domestic market. With German buyers even a single price increase usually results in a fierce battle. Retailers view themselves as guardians of prices and noble advocates of consumer protection. They accuse some suppliers of passing on higher price increases than necessary. In the last half of 2022, negotiations on price and conditions led in a few cases to the delisting of renowned brands. The example of Kellogg’s shows what kind of effect this can have on an entire category: Movement of shoppers (Käuferabwanderung) but also reinforcement of private label. In Germany, Kellogg’s generates 25.6% of turnover with Rewe (retailer No. 3). An analysis of Smhaggle, a price transparency app, shows that in a certain period in 2022 the number of shoppers in Rewe’s entire cereal category decreased by 12.1%. The Kellogg’s brand lost 19.4% in volume, while Rewe’s private labels increased by 17.2% and competitor Nestlé gained 2.2%. This clearly shows even to grocery retailers that brands are needed, despite the steady rise of private label. However, brands need to be careful not to lose the momentum. Now is the time to review brand strategies and fine-tune propositions, and to communicate with the objective to maintain loyal consumers and convince more shoppers to buy their products. Brands need to be ahead of the game more than ever. Several recent studies show that German consumers are less willing to pay for environmentally friendly food. This is obviously a side effect of the current crisis and will surely be only a temporary phenomenon. Germany has always been advanced regarding sustainability topics and brands need to invest now, even if it hurts, in building credibility in this area while proving the general value of the brand itself remains an ongoing task. Yes, this will be reflected in a higher shelf price, but consumers will have to come to terms with price increases in general, driven by climate change, raw material, energy and labour costs. In the end it boils down to this: German consumers (as well as some retailers) should really stop complaining. We will never return to our former low price levels, and this is a good thing. Nicole Guenther Managing Director, Green Seed Germany nguenther@greenseedgroup.de