One in Four Germans Buys Household Staples Online

Last year, 23% of Germans aged 16 to 74 years old said they had bought products like food, detergents, or cosmetics online in the last three months. Online purchases have become particularly popular in the 65 to 74 age group. Here, the proportion of those who shopped online rose from nearly 55 percent in 2021 to almost 62 percent two years later.

 

Customers Are Eschewing Ultra-Processed Foods

A survey by trade magazine The Grocer of 1,000 adults shows a great leap in the importance of health. No less than three million consumers in the UK have started avoiding ultra-processed foods (UPFs) in the past three months.

Research from the EIT Food Consumer Observatory, combining a survey of 10,000 consumers from 17 European countries found that 65% of European consumers believe that ultra-processed foods are unhealthy, and that they will cause health issues later in life.

More than two-thirds of consumers (67%), for example, believe UPFs contribute to obesity, diabetes, and other lifestyle-related health issues.

Furthermore, 67% of European consumers state that they do not like it when their foods contain ingredients they do not recognize, and four in 10 (40%) do not trust that ultra-processed foods are regulated well enough by authorities to ensure these foods are safe and healthy in the long term.

UPFs include packaged snacks, soda, sugary cereals, energy drinks and chocolate bars, as well as foods such as ready-made sauces and dips, ready meals, and salad dressings.

Despite consumers’ health concerns, 56% admit to eating UPFs at least once a week, citing convenience, price, and taste as motivations.

Private Label in US Produced Record-Setting Sales

In 2023, own brands continued to be the brightest light in US grocery food and nonfood. 

Unit sales were nominally even, off by only 0.1%, compared to national brands which shed 2.8%. Own brand unit share came in at 20.7%, an improvement of 0.5 points from 2022 and setting a record. Dollar sales rose by 4.7%, compared to a gain of 3.4% for national brands. Own brand dollar share moved up to 18.9%, ahead 0.2 points from 2022, likewise a new high. 

In arguably the most important metric, annual private label dollar sales moved ahead to $236.3 billion, an increase of $10.1 billion from the previous year and establishing another all-time mark.

Private label in the US is on a four-year winning streak. Compared to 2019, annual dollar sales in 2023 increased by $60.2 billion, a gain of 34%. Own brand dollar share rose 1.2 points to a record 18.9%. During the same period, Private label unit sales were ahead by 500 million and unit share improved 0.8 points to 20.7%, also a new high,

The data comes from PLMA's just-released 2024 US Private Label Report, now available here.

'Smart' Shopping Carts Being Trialled

In Germany, Rewe is testing tablets attached to carts with an AI powered system that allows customers to scan their shopping list. The system can then navigate them to the desired products. On the way there, the screen shows discounted items and special offers.

Conad is testing a project that it calls ‘Genio nel carrello’ (genius in the cart). The smart trolley is able to recognize the items that are placed (or even thrown!) inside. The trolley, thanks to 8 cameras on board, and hardware inside the installed tablet, is able to recognize products with around 95%. Payment with the trolley can take place in three ways: passing through the traditional checkout, using the self-payment area, and the Pass Pay lane – passing without stopping for customers registered with a form of digital payment on the app.

Rise of Chemicals in Fruit & Veggies in Europe Detected

Europeans are increasingly exposed to PFAS, or ‘forever chemicals’, through their food. PFAS are deliberately sprayed on crops to increase the effectiveness of pesticides, although farmers are not always aware of them because they are not always explicitly stated on the products they use.

‘Forever chemicals’ are almost impossible or very difficult to break down in nature or in our bodies. Some PFAS can damage the immune system and cause cancer and have a harmful effect on the environment. As part of the Green Deal, the European Union wants to phase out the use of PFAS chemicals.

Of the 20 EU countries surveyed, PFAS chemicals were found most often in Belgium and the Netherlands. The volume of fruit contaminated with PFAS grew by 220% between 2011 and 2021.

EU Updates Cybersecurity Regs for Supermarkets and Suppliers

To help mitigate the risks of cyber threats to retailers and other industries, the EU has updated its cybersecurity regulation, Network and Information Security (NIS), to NIS2. This EU-wide initiative delivers the framework needed to build better cybersecurity structures across industries that provide essential functions.

The food sector in the European Union is one of the largest and most important industries, covering every aspect from farming to food processing, packaging, transportation, and retail sales. NIS2 now categorizes the food sector as an “important entity that provides essential functions” and includes food retailers and processors and producers.

Companies covered will have the duty of care and duty to report. Duty of care includes a risk assessment with consequential measures to be taken to guarantee continuation of services as much as possible. Duty to report involves reporting incidents that (can) significantly disrupt the provision of the essential services to the supervising authority within 24 hours. Organisations covered by the NIS2 directive will be under supervision.

The NIS2 directive also encourages supply chain management as an essential component of cybersecurity. This will require food sector organizations to ensure that their suppliers and partners meet the same cybersecurity standards that they themselves are required to comply with.

The NIS2 directive will come into effect by mid-October 2024.

Russian Barebones Discounter Returns to Western Europe

Mere, the hard discounter from Russia, seems to be in the middle of a relaunch in Western Europe. The chain opened two stores at the end of last year and a third last month in Spain. The company plans to open another six new stores in Spain this year. In Belgium, it opened three stores under the ‘MyPrice’ banner with plans for another three here this year. The discounter announces the opening of eight or nine stores under the MyPrice banner in Germany this year.

It is a remarkable move for a company that did an earlier push into Western Europe a few years ago. The discounter opened one store in Belgium in 2022 and pulled the plug after a few months It similarly entered and left the UK, Germany, Austria, France and Spain. At the time, it was said that there were supply issues and a lack of interest of the West European consumer.

The Mere and MyPrice banners belong to the Siberian group Svetofor. In Russia the retailer trades under the Svetofor name and is among the top ten food retailers. In East Europe, it has stores under the Mere banner, amongst others, in Czechia, Serbia and Lithuania.

The retailer works with a super simple concept in order to cut costs wherever possible. It sells a changing range of unknown brands displayed on pallets. The stores look like bare containers without any decoration. Goods are sold at prices that are 20 to 30% lower than those of other discounters. The stores operate with a limited workforce and are located at cheap locations outside the cities. It remains to be seen whether the concept will appeal to consumers this time.

Meanwhile, the Belgian Economic Inspectorate is conducting an investigation into the MyPrice chain. It will be examined, among other things, whether it complies with European sanctions against Russia.

 

France Reserves Familiar "Meat" Names For Meat Only

The French government has published a decree with a list of names reserved for animal products. From now on, it is forbidden to use these names for vegetable protein products. The list includes names like ham, sausage, bacon, steak, prime rib and filet.

The ruling is a response to a long-standing complaint by the meat industry that terms like vegan steak or vegetarian bacon is confusing for consumers. It only applies to plant-based food produced in France: producers elsewhere in the EU can continue to sell vegetarian food with meat names in France.

French producers have one year to clear their existing stock. After that, companies breaking the labelling law can be fined up to 7,500 Euro.

The Italian lower house passed a bill last November to ban the use of meat-related names, such as 'salami' or 'steak', for plant-based meat products. After a wave of outrage in Italy, the third-largest vegan market in the EU, the government the bill was postponed.

In EU Law, there already exists a ban on certain terms including “milk” and “yoghurt” for plant-based dairy, even if they are accompanied with qualifiers such as “plant-based” or “vegan”. However, until now, the EU refrains from regulating the use of ‘meaty’ names.

The Changing Dynamics of European Retailing

Consumers remain cautious in their buying behaviour yet still demand product innovation. Retailers, in turn, are divided between declining margins and the pressure to increase investment. It is predicted that more will turn to Artificial Intelligence for help. Judith Kolenburg discusses the implications for private label and what to expect from grocery retailers in Europe. In other news, NoLo drinks – alcohol-free and low-alcoholic beverages – are getting attention. Hans Kraak reports on this upward trend which aligns with consumers’ shift towards healthier lifestyle choices.

AI Seen as Inevitable for Retailing

AI is the central digitalisation trend in the industry, according to an EHI survey among German retail marketing managers. 82.4 of respondents see AI as an important marketing trend which has the greatest potential in marketing.  

AI is already used in personalizing communication with customers, for example through chatbots that respond to individual wishes. In addition to creating texts and images, artificial intelligence can also analyze and link customer data. As a result, 
the programmes offer increasingly better opportunities to analyze and predict customer purchasing behavior in order to optimize sales. With over half of respondents say that marketing is moving increasingly towards customer centricity, tools to help focus on individuals become all the more important.

Finally, more than a third of the retail managers feel that AI could change jobs or create new ones, although that would require (new) employees familiar with generative AI.