IN CASE YOU MISSED IT

In a PLMA Lunch & Learn presentation, Circana’s MaryEllen Lynch revealed new sales data about today’s cost-conscious consumer. Free to PLMA members.

IDEAS AND INNOVATION
  • Target has introduced “dealworthy,” a new low-priced brand of 400 everyday basics. Prices start at less than $1, with most items under $10. Target has also reformulated 40% of its “up&up” private brand products to meet new, higher quality standards. It also has added hundreds of new products to the line. The line now spans 2,000 items, with most under $15.
  • Lowes Foods, Winston-Salem, N.C., has introduced a dipping sauce line to complement its Chicken Kitchen prepared chicken. Flavors include Buffalo Wing, Sweet & Smoky and Zesty Kickin’.
  • Publix Super Markets has added a new flavor - vanilla shortbread cookie - to join six other annual limited-edition ice creams, including Bananas Foster and Irish Crème Salted Caramel. Each is now available in half-gallon sizes.
  • Marinated frozen salmon is now being sold at Weis Markets, Sunbury, Pa., under the Weis by Nature brand. The salmon comes in four flavors, including pepper and wild garlic.
     
NOTABLE QUOTABLE

92% of shoppers trust store brands just as much as or more than national brands, and that’s up 3 points since 2021.

Chelsey Capps, Director of Thought Leadership, Daymon, in a PLMA panel discussion. Watch here.

Trend Alert: Advancements in Non-Dairy Cheese
Wegmans

The vegan industry has seen improvements in the taste, texture, and meltability of dairy-free cheese. Take the new line of dairy-free cheese at Wegmans Food Markets. Selections include cheddar-, mozzarella-, Parmesan-, American- and Provolone-style. Each is sold under the Wegmans Food You Feel Good About store brand, which contains no artificial colors, flavors or preservatives. Each variety is sold in a resealable 8-ounce bag. “Melts Great” is printed on the front of the package.

More Retailers Are Adopting AI

A rising number of grocers are using AI to help customers save time and have a better shopping experience. Among other examples, chatbots are already in use at Walmart to increase the speed and convenience of shopping.

And Amazon has released a new generative AI-powered shopping assistant, called Rufus. Rufus is built on a large language model that’s trained on Amazon’s expansive product catalog, customer reviews, community Q+As, and the broader web, according to Andy Jassy, Amazon’s President and CEO.

“It’s an exciting next step in the Amazon shopping experience and I look forward to seeing how it helps customers make better, more informed, shopping decisions,” Jassy wrote in a LinkedIn post.

Grocers plan to increase their 2024 artificial intelligence budgets 14% to 37% this year, according to a Grocery Doppio report. Nearly three-quarters (73%) of grocery executives expect AI capabilities to be embedded in most or all of their technology by 2025.

Albertsons’ Brown to Keynote PLMA Conference, March 20-22

Registration is open for The PLMA 2024 Annual Meeting & Leadership Conference, March 20-22, at the Hyatt Regency San Antonio Riverwalk. The impressive list of speakers includes Brandon Brown, SVP, Own Brands, Albertsons. Plus, hear from Cogknition Analytics, Daymon, dunnhumby, Kerry, McKinsey and many others. Additionally, the Private Label Hall of Fame Class of 2024 will be inducted at a special dinner.

The conference offers sponsorships of food and beverages offered at the conference. Company sponsorship will be acknowledged during the event with signage.

Click here to register for PLMA’s Leadership Conference. For more information, contact PLMA at info@plma.com or 1+212-972-3131.

YouGov Buys GfK’s Consumer Panel

Research and data analytics group YouGov has completed the acquisition of the Consumer Panel Services from GfK. The Consumer Panel is an established leader in household purchase data, and it operates across 18 European countries, comprising over 100,000 homes. It helps the FMCG sector get insight into consumer behaviour by capturing and analysing consumer purchasing data.

According to YouGov, the deal builds on its long-term growth strategy and expands its presence in the FMCG sector. For GfK, the divestment of its Consumer Panel  addresses competition concerns by the European Commission and was a condition for the combination of NIQ and GfK. GfK says that irrespective of the divestment of its consumer panel business, the combined entity NIQ-GfK will continue to focus on consumer and retail measurement analytics.

Mixed Feelings on Cultured Meat Abound in Europe

Countries in Europe have different attitudes towards cultured, cultivated, or lab-grown meat. As the first country in Europe, the Netherlands proudly announced that it is allowing cultured meat tastings. While tastings within companies were already allowed, companies can now apply for external tastings. An independent committee with a toxicologist, microbiologist, doctor, and ethicist will assess applications. Once an application is accepted, companies have the possibility to test whether their ‘meat’ works in a restaurant, or it can have it tested in taste test panels. It is seen as a first step towards towards laboratory meat in the supermarket.

Cultured meat is grown in the laboratory from animal stem cells. The stem cells of only one animal are needed for thousands of kilos of meat. Cultured meat is marketed as being a sustainable and animal friendly alternative to meat.

On the other hand, other countries, for example Italy, Austria and France, do not see lab-grown meat as a sustainable alternative to original agricultural production. They say studies show a poor carbon footprint of laboratory meat due to the energy-intensive process. Italy is banning artificial meat altogether, to ‘protect tradition and culture’. France banned it from company canteens. On the contrary, in the US and Singapore, cultured meat has already been approved for sale.

Before a cultivated meat product can be sold in the EU, it needs to receive pre-market approval by regulators in a process governed by the Novel Foods Regulation. Once EU regulators approve a cultivated meat product, it can be sold across all 27 EU countries. The approval process will include a thorough and evidence-based assessment of the safety and nutritional value of cultivated meat and is estimated to take at least 18 months.

Aldi Nord Centralises Purchasing and Combines Own Brands

Discounter Aldi Nord has been restructuring its purchasing organisation. In this remarkable step towards a modern and lean category management, the company is doing away with the separation between category management and purchasing, which was introduced five years ago.

More power will be given to the ones responsible for the category: They are to manage the product range and can make binding agreements with suppliers. The move should make the buyers more involved with the store. In addition, lengthy coordination processes and sometimes conflicting interests between the person who decided on the listing and the person who negotiated the purchasing price are avoided.

In addition, Aldi Nord is standardising its range across countries. Before, 50 to 70 percent of the range was centrally bought, and thus part of the range in stores in all countries. In the future, up to 80 percent of items will be purchased centrally across countries.

Another advantage is that the new structure better matches the buying organisation of Aldi Süd. The companies are in the process of deepening their cooperation. This includes combining their own brands. The retailers will typically first combine own brands in a category in Germany and then slowly spread the new uniform private label over the countries where they operate. At the same time, private label names are changed to internationally ‘understandable’ names.

There is no doubt we will be seeing more synergies among the two Aldis in the future.

No Surprise, Private Label Sales Set New Record

In 2023, sales of private label in Europe hit the 340 billion € mark, an all-time record. Private label now makes up 38.5% of the total grocery market value. Private label turnover increased by +13% last year. In the same period, manufacturers’ brands sales grew by less than half that much, at +6%.

More details about private label performance can be found in the new edition of PLMA’s International Private Label Yearbook, for which NielsenIQ surveyed 17 European markets: Austria, Belgium, Czechia, Denmark, France, Germany, Greece, Hungary, Italy, Netherlands, Norway, Poland, Portugal, Spain, Sweden, Switzerland and the UK,. The analysis includes some 500 retailers and hundreds of food and non-food supermarket products.

As trade publications and industry experts have been predicting for months, in 2023, consumers massively switched to private labels, as many worry about high inflation rates. In addition, as has happened before during crises, once they found that the quality of the products was equal to or better than familiar manufacturers’ brands, they have stuck with the retailers’ own brand products.

Another 2023 presumption was confirmed: Overall, the grocery market, private label and manufacturers’ brands combined, lost a mere -1% in volume (units). In the majority of the countries, consumers bought less products than in the previous year. Despite the challenging market situation, private label managed to achieve a volume growth of +2%. Manufacturers’ brands registered a decline of -3%.

From a value perspective, the Yearbook clearly shows the impact of inflation. Turnover of all items – brands and private label – increased by 72 billion €, almost 9%, despite the -1% decrease in unit volume sales in Europe. Private label is a true driver of growth: 54% of the total market growth is attributable to private label sales.

In the coming months, food inflation is expected to remain high. As soon as inflation starts to fall and households have more breathing space, it will be the question  whether volumes, which have been under pressure in the past two years, will pick up again. Some experts believe that even then, consumer buying behaviour will remain cautious and frugal.