PL Magazine July 2021

Private Label Magazine Producer-Retailer relationships of value: from Category to PL Selex, private label accounts for 1.4 billion euros Penny Market: a solidarity chain for suppliers

3/2021

PLM - TABLE OF CONTENTS

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Editorial 20 On-the-field Experiences PL and Covid-19 pandemic, Fairtrade, the growing a new industry-retail agreement awareness of Italian chains to rethink

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Cover Producer-Retailer relationships of value: from category to PL

16 Retail brand intenational Penny Market: a solidarity chain for suppliers

24 Interview with distribution Selex, private label accounts for 1.4 billion euros

42 Observatory QBerg, Private Labels to conquer the Italians' breakfast

28 Markets PL enriches its supply of plant-based products

48 Markets Private label supply for breakfast foods on the rise

PLMagazine Quarterly supplement of Distribuzione Moderna magazine, a media outlet registered with the Court of Milan Registration No. 52 of 30 January 2007 Editor-in-chief Armando Brescia Editorial director Maria Teresa Manuelli

Translation Jcs - Language Services info@jcslanguage.it

38 Interview with the company Subcontractor production accounts for 70% of the turnover

Scientific Committee Stefano Ghetti, Expertise on Field Managing Partner/ IPLC Italy Partner Gianmaria Marzoli, IRI Italy Retail Solutions Vice President Alberto Miraglia, Retail Institute Italy General Manager Paolo Palomba, Expertise on Field Managing Partner/IPLC Italy Partner Emanuele Plata, PLEF Co-founder, Past President & Board Advisor

Creative Director Silvia Ballarin

Contributing Authors Francesca Liistro, Fabio Massi, Luca Salomone, Fabrizio Pavone

Advertising Ufficio commerciale: commerciale@edizionidm.it Tel: 02/20480344

Editor Edizioni DM Srl - Via A. Costa 2 20131 Milano P. Iva 08954140961 Contact Tel. 02/20480344 redazionedm@edizionidm.it

There is no guarantee that we will publish the original versions or any part of submissions (texts, articles, news, images, data, charts, research, etc.) sent by authors outside the Editorial Board. Submissions may, however, be published in a revised form for editorial reasons. It should also be noted that sending a submission constitutes an automatic authorisation by Edizioni DM Srl to publish it free of charge in all its publications.

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EDITORIAL - PLM

Pl and Covid-19 pandemic,

a new industry-retail agreement to rethink A year and a half after the outbreak of the Covid-19 pandemic, access to vaccines is the main factor that marks the rhythm of people's daily routine and the world economy. Although the world GDP was expected to grow in 2021 - and these positive predictions will also be reflected on global trade - the slow trend of the vaccination campaign in the world makes it more and more unlikely to reach herd immunity by the next 12 months and be rapidly back to ‘normality’. And that's not all. Companies will also have to consider an increase in production costs: besides prices of raw materials, which should remain high, also transports will be affected. The inflationary risks were hot topics in the last few months and we are experiencing a general degradation of lifestyle, purchasing power and rise of inequalities. In this context, what’s the role of Modern Retail and how can it give its contribution through the PL supply?

We have seen how large-scale distribution helped Italy facing the crisis last year. With 425 thousands direct employees, it has been the fifth economic industry for employment growth in Italy in the last 6 years; it was the first one to experiment the implementation of COVID-19 security protocols during the lockdown, leading the way for re-opening in the following months also in other industries. It also confirmed its role in protecting consumers and implementing the Italian agri-food system. Despite the difficult period, the environmental sustainability of its own products and of the upstream processes was firmly continued. However, now it is clear that cycles going in fits and starts will continue to constrain the internal demand for the most part of the industries and new collaboration agreements between retail, industry and consumers will be needed. These agreements will be implemented especially thanks to PL. Which were the new opportunities created in this sense and which are, on the other hand, the critical issues? In the following pages we will see some answers to these questions.

Maria Teresa Manuelli Editorial director

PLM - COVER STORY

Producer-Retailer

relationships of value: from Category to PLd Growing turnover and industry size on the one hand, but competition and an approach overly single-client focused on the other, divide co-packers into those in favor and those against. The solution lies in cooperation.

Guiding and stimulating partner companies, cooperation encourages strong industrial and competitive dynamics, the adoption of best practices of social responsibility and the construction of an increasingly sustainable and circular industrial fabric. Private labels are now seen as an even more strategic asset for the development of a new model of society. However, many producers are still wondering whether entering into a partnership with a PL may damage their image and business. The study published last March by The European House-Ambrosetti, ‘From emergency to sustainable relaunch: the PL contribution’, dispelled any doubts. One of the paragraphs, in fact, was specifically dedicated to the value generated by private labels throughout the industry. According to Ambrosetti, PL's contribution to the industry over the years has been a guide and stimulus to partner companies that has strengthened their competitive industry dynamics. It was later shown that it had been the main factor in the growth of the Italian food industry. Its incidence on the total turnover of the industry was equal to 8%, a historic record. This percentage, never reached before, according to Ambrosetti explains the 78% growth of 4

COVER STORY - PLM

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PLM - COVER STORY

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COVER STORY - PLM

the food industry in the domestic market in the last 17 years. Furthermore, PLs are currently generating work for a total of 235,000 among direct and indirect employees along the entire supply chain, up 7% compared to the previous year. It involves, in fact, a network of about 1,500 partner companies (those that used to be copackers), 92% of which are Italian. Of these, 85% are small and medium-sized companies with a turnover of between 2 and 50 million euros.

STRONG BUSINESS RELATIONSHIPS FOR ABOUT 50% OF THE COMPANIES

And that’s not all. PLs’ business supply chain is based on long-term strategic collaborations: in 98% of the cases, supply relationships last for over 2 years, and about 50% of partner companies now have a supply contract with Modern Retail for 8 years or more. The analysis of the financial reports of a sample of 565 companies throughout Italy showed that PLs help strengthening the business and competitive dynamics of partner companies, supporting the growth of their turnover and added value over the years (7.3% annual average growth rate of low-performing PL partners, 6.8% growth of high-performing PL partnera and 17.2% growth of very high-performing PL partners), as well as the growth of their EBITDA (7.6% annual average growth rate of low-performing PL partners, 9.4% growth of PL partners and 16.9% of very high-performing PL partners) and employment rate (4.3% annual average growth rate of low-performing PL partners, 5.4% growth of high-performing PL partners and 11.8% of high-performing PL partners).

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Natural quality for your brand: trust the Leader La Doria is the leading European producer of private label legumes, peeled tomatoes, chopped tomatoes, pasta sauces and pestos and among the top Italian fruit juice producers.

Product quality and customer centricity, respect for the environment, traceability from farm to shelf, technological innovation and great flexibility have led us to become the preferred supplier of the major retailers looking for an alternative to branded products with an excellent quality/price ratio.

A passion for private labels since 1954.

www.gruppoladoria.it

COVER STORY - PLM

A growing local turnover thanks to ʻI nostri Oriʼ

by Conad Nord Ovest u With the aim to enhance and support local businesses, Conad Nord Ovest launched

‘I nostri Ori’, a product range that brings together, under the same brand, all the food specialties of the regions where the label is present. ‘We’ve always been committed to supporting local businesses, which are mainly small and medium producers. In 2020, the local partnership network included 1,775 suppliers, for a turnover of 570 million euros’, affirms Marco Antonio Brambilla, Conad Nord Ovest Business Manager. To ensure its product supply, Conad Nord Ovest oversees the entire production chains, by collaborating with the suppliers and reaffirming its position against labor exploitation, also through careful inspections.

“The new brand strengthens and enhances ‘Consorzi Ori’ even more. These are organisations of fruit and vegetable growers created in 2010 out of Conad Nord Ovest’s idea”, explains Alessandro Bacciotti, Conad Nord Ovest Sales Manager. Up to date, the Consortia has 121 member companies. The sales share of fruit and vegetables sold under Ori brand in Tuscany, Lazio and Sardinia in 2020, for instance, accounted for over 20% of the total turnover generated by fruit and vegetables. ‘I nostri Ori’ project is part of the ‘Sosteniamo il futuro’ initiative, a series of concrete, daily actions based on participation, inclusion and economic, social and environmental sustainability.

Specifically, PLs are given credit for supporting a network of companies in the South of Italy that is increasing at a more significant rate compared to the national average (+6.37% vs +5.35%). Also, small enterprises are growing faster than those of the food industry (+8.48% vs +5.32%). Finally, PL partners that collaborate the most with Modern Retail proved to be more resilient during the COVID-19 pandemic and are expected to be among those players in the Italian agri-food chain that will emerge “stronger” from the crisis.

COPACK ERS BE T WEEN HI GHS AND LOWS

There are risks, though. In its 2018 study, entitled ‘The producer’s dilemma: Company Brand or Co-packing strategy for Private Labels’, IPLC consulting firm identified risks mainly in: the high turnover concentration for small and medium enterprises in relation to large-scale 9

PLM - COVER STORY

distribution customers; the risk of product substitutability in terms of efficiency and quality; the continuous competition with other co-packers for the same PL customer; the need for regular investments in new and more efficient plants, and finally in the optimization of production capacity. “As in any other sector, since the market is constantly changing, the economic exposure towards a customer is always a mystery - remarks Sergio Antoniuzzi, Icefor President - therefore major companies may easily be unable to keep up with it anymore. Over time, our certifications and knowhow have given us the opportunity to enter into PL partnerships with the most important clients of large-scale distribution and many others.” Innovation is key for long partnerships.

Plant-based, non-polluting and cruelty-free detergents, Rspo-Roundtable on Sustainable Palm Oil-certified, ingredients from non-human food sources, as well as, Voc-free formulae, and ‘Plastic Second Life’-certified packagings are only a small yet significant part of what makes this detergent company a reliable and valuable partner.

N&V, STRATEGIC ADVANTAGES FOR CONSORZIO C3 PARTNERS u “N&V products have always been good

value for money in almost all categories” says Alessandro Cassano, Noi&Voi Operational Manager, the exclusive brand owned

by Consorzio C3.

“The strategic advantages - he adds - are the possibilities to strengthen our business relationships, considering that almost all our co-packers (leaders in PL development) are also historic partners of the other members. Logistics companies, for instance, are a classic and clear example.” The consortium also provides its partners with support for the graphic development of their packaging, from design to sending the graphics for packaging printing.

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COVER STORY - PLM

Esselunga, over 8 billion turnover for the industry

u “The attention to the territory and

the excellence of its products and typical dishes, as well as the promotion of a short supply are essential for Esselunga’s procurement policies. Buying locally helps support the economic fabric and its small farms, a priceless resource for Italy, and contributes to preserving the Italian agricultural heritage.” In its last Sustainability Report, the chain estimated this value at over 8 billion euros in turnover, with 301 million euros in investments in the industrial segment, and 6.6 billion euros of purchases from Italian suppliers.

In 2020, the company purchased goods and services from over 2,650 small and medium enterprises for a total value of about 2.2 billion euros (29% of total purchases from Italian suppliers).

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COVER STORY - PLM

Gruppo VéGé, an all-around partner According to VéGé, a leading company in large-scale distribution, the first step towards a strong relationship with shareholders is the partnership with PLs. “Since we’re a large group scattered throughout the country, in addition to a business relationship with our brand and the possibility to develop products that, due to their volume or characteristics, can’t be part of the usual assortment - says Marco Pozzali, Gruppo VéGé PL Coordinator -, a PL producer, establishing a relationship with the headquarter, has the great advantage of getting known and embraced by all the businesses of the group.” Furthermore, if such supply, complimentary to PLs, were wide, a further step would be the signing of an agreement with the Group’s headquarter, which would regulate the general economic terms of the relationship between the supplier and the businesses. Such aspect would give them further visibility and ensure a basis on which to build single “local” relationships. “Together with these “business” advantages - continues Pozzali - the collaboration with VéGé allowed several among our co-packers, including small and medium enterprises, to have a deeper knowledge of how to approach market or product analysis, packaging design and certification, as well as pricing process. Those suppliers with a less structured business, as they are exclusively focused on production, for instance, saw such relationships as an opportunity to grow in those areas that aren’t usually part of their business reality”. VéGé group, in fact, offers significant support to their partners, providing, in particular, a thorough analysis and sharing of market data, which it receives real time, used to better understand the playing field of PL. “Also the in-depth analysis of product characteristics, compared to the other market players - concludes Mr. Pozzali - is an opportunity for co-packers to get in the game, supported by the expertise of our Quality Assurance department, which continues with recurring laboratory analysis that allows the understanding of any production deviation from the target set.

Packaging development, especially for the continuous changes in the related regulations, is undoubtedly a complex phase. Our legal department shares any implementation and interpretation with suppliers, and this often becomes an opportunity for mutual update.”

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Moroni Amato Group

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SUSTAINABILITY

Sustainability, Innovation and Market vision are three principal points of our company for the development of our Brands and those of MDD.

ZER

IMPACT 100% RECYCLED

ZERO IMPACT: the green line with 100% recycled

packaging and over 94% ingredients of natural origin. quality products, innovation and love for the PLANET.

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COCCOLATEVI: laundry perfumers with an heady and

lasting fragrance that can also be used to perfume and cleanse the whole house.

VISION

INNOVATION

Our brands

BIOXCARE: a complete range of products dedicated to skin hygiene and disinfection. Practical and effective sanitizing soaps and gels for the whole family.

RSPO-9-4082-21-000-00

COVER STORY - PLM

I NNOVATI ON I S K E Y TO COLL ABOR ATI ON

“PL production contributed to business growth thanks to the increasing market share of PL products, on the one hand, and the growing number of distributors that see Moroni Amato Group as an attentive and reliable partner ”- explains Tomas Beggio, Moroni Group Sales Manager. The company has developed several PL lines that have performed outstandingly in terms of sales. “ The best way for us is a good balance between branded products, whose success depends completely on the producer, and PL products”, says Mr. Beggio.

Active in seafood ready meals since 1861, Medusa company has been working with PLs for years. “ The advantage of producing PL products for a company like ours says Sabrina Per tot , Ces are Regnoli&Figlio (Medus a) Mark eting Manager- lies in the possibility to establish business relationships with large-scale distribution that grow stronger over the years. PLs have dedicated a place on the shelf, but, most of all, can count on the trust of loyal customers. The main risk is market competition, as those categories that don’t have a structured assortment are less performing, thus having fewer chances to compete with their own brand.” If research and development and communication investments were focused solely on their own brand, in fact, this would consolidate brand equity, but would leave the way open for other competitors to build their private brand.

“Only true collaboration - concludes Stefano Ghetti, IPLC Italy Par t ner - can dispel this doubt: those who are open to discussion with retailers reach the consumer first because they can benefit from their direct experience on the part of the brands and can discuss issues that help them in the creation of the product.”

Maria Teresa Manuelli

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PLM - RETAIL BRAND INTERNATIONAL

Penny Market:

a solidarity chain for suppliers The retailer ’s response to the crisis, caused by Covid-19 pandemic, helped the economic recovery of those small local producers that made history in the Italian agri-food specialties.

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reated in 2020, ‘Abbracciamo l’ impresa italiana’ (‘Let’s embrace the Italian companies’) campaign was the concrete response given by Penny Market Italia, Group Rewe food discount, to react to the difficult situation caused by Covid-19 pandemic and the related economic consequences in Italy.

The main goal was to help the restart of the Italian agri-food industry, which includes the main Pls of the brand, such as Natura è, Vicino, Cuor di Terra, My BIO, Free, etc. The first concrete result immediately recorded by the initiative was the widening of its offer of Italian local products, and, also, the promotion of food and wine products that before ‘Penny’s embrace’ were often not sold in the mass consumption segment. Thanks to this initiative, hundreds of producers were able to restart, with the support of the retailer, especially because of the privileged access to about 400 stores all over Italy. Local and regional high quality products that will be added to the Made in Italy specialties that already account for 70% of national stores’ assortment. We interviewed Paola Monica Dimaggio, PL Manager & Sustainability Coordinator, and Marcello Caldarella, Communication Manager to talk about these topics.

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TRETAIL BRAND INTERNATIONALO - PLM

‘ABBRACCIAMO L’IMPRESA ITALIANA’ 2.0 IS ON ITS WAY Launched in 2020, with the 2.0 version of its ‘Abbracciamo l’impresa Italiana’ campaign, Penny Market gave an even bigger embrace to socially-committed volunteer associations, starting with its historical partners. With Banco Alimentare Onlus, it will be possible to increase and promote new initiatives to fight food waste on the national territory; with Mission Bambini, Penny will help young people in need between 18 and 25 years of age by offering them training and courses to introduce them to the world of work; with Fondazione Progetto Arca, the brand is already working in the Milanese area, together with the volunteers of the association, to guarantee food to families in need.

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PLM - RETAIL BRAND INTERNATIONAL

How many people joined the initiative?

256 small and medium local entrepreneurs asked to join the initiative, 196 were the entrepreneurs contacted and more than 50 companies now have reached our 400 stores. Among these products of absolute excellence, which are also easy to recognise from the campaign logo, there are for example Salumificio Da Pian Grilled Prosciutto; Cavallaro Sicilian Honey; Caseificio Russo Seasoned Pecorino; Cooperativa Acli-Racale New Potatoes; Pastificio Strampelli of Amatrice Spaghetti, Bucatini, Mezze maniche; Il Grillo of Santa Tresa Sparkling Wine. Real and concrete help that embraces traditions, values and people of a country, Italy, that is eager to restart.

What are the tangible advantages?

Purchases allowed small suppliers to have a direct access to buyers, Logistics encouraged agreements with small local transport companies that had been active in other sectors before and that had to stop their activities due to the health emergency. Logistics also granted support to local transport companies through Penny Cargo logistics synergy system.

Furthermore, our Quality Function implemented simplified and dedicated supplier verification systems, as well as the optimization and acceleration of quality verification processes; our Legal and Public Affairs Office contacted SME category associations and institutions to ensure a shared and broader support network.

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TRETAIL BRAND INTERNATIONALO - PLM

Also from the communication point of view?

Supporting communication is just one of the actions we put in place. There are so many successful stories to tell and Penny wanted to help entrepreneurs through a studied communication plan based on direct experiences and story-telling of those who have already experienced the crisis, first, and then the recovery, also thanks to the support of ‘Abbracciamo l’impresa italiana’ campaign.

How much is private label an important driver for your offer ?

Being a discount chain, private labels have a key role, because in some categories they account for about 85% of our offer and, for this reason, are a strong factor to build customer loyalty. To better suit our consumer’s needs, we are considering further expansions in new categories. For instance, we are launching a line of barbecue products in August, which will include about thirty references of ‘barbecue’ products: fresh meat, seasoning, sauces, fruits and vegetables, but also non-food, such as aprons, branded t-shirts, and barbecue tools. That’s the reason why the line will be called ‘ Voglia di griglia’ (‘Craving for barbeque’). We will also continue with the relaunch of our historical brands and we will develop new ones in line with the current trends.

Maria Teresa Manuelli

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PLM - ON-THE-FIELD EXPERIENCES

Fairtrade,

the growing awareness of Italian chains After more than 25 years of collaboration with large-scale distribution labels in Italy, the international certification takes stock of relationships and initiatives during the most difficult year of all times.

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s much as 436 million euros is how much Italians spent on products with at least one Fairtrade certified ingredient last year in Italy. In addition to fresh fruit, such as bananas and pineapples, coffee, chocolate, breakfast cereals, bars, cookies, dried fruit, cut flowers, cotton clothing and many more can also be labelled with Fairtrade Marks. This has emerged from the annual report by Fairtrade Italia ‘Fairtrade’s response to the challenges of change’, a snapshot of global certified fair trade in 2020.

Thanks to Fairtrade sales in Italy, farmers' and workers' organizations in Asia, Africa and Latin America have received over 3 million euros to be invested in technical and productive development, such as the purchase of fertilizers or other products and machinery for agriculture, as well as, for the construction of classrooms and school facilities, clinics, and so on. In the large-scale distribution channel, Fairtrade products have consolidated their presence thanks to its historic collaboration with Coop Italia, which, in 2020, doubled the assortment compared to the previous two years. Moreover, the discount chains that are Fairtrade partners have shown great dynamism and growing commitment: Lidl, In's Mercato and Aldi have collectively added dozens of new products. Other brands in the retail sector are working to widen the range of products offered and increase sales. We spoke about it with Thomas Zulian, FairTrade Commercial Director.

Can you take stock of 2020 with respect to your collaboration with Gdo? 2020 was a difficult year for consumers and companies in our country. However, our partners had the courage to further bet on Fairtrade, significantly expanding their product supply. This makes us happy and confirms that a proposal of strong social value is increasingly in line with the demands of a growing number of citizens, and an opportunity for companies to develop their business.

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ON-THE-FIELD EXPERIENCES - PLM

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PLM - ON-THE-FIELD EXPERIENCES

Which suppl y chains have grown the most ?

2020 was a difficult year for consumers and companies in our country. However, our partners had the courage to further bet on Fairtrade, significantly expanding their product supply. This makes us happy and confirms that a proposal of strong social value is increasingly in line with the demands of a growing number of citizens, and an opportunity for companies to develop their business.

And which ones have struggled?

Bananas are still the top product by volume. But after growing steadily over the last 15 years in terms of volume, for the first time in 2020 recorded a -15% drop equal to 13,500 tons of sales. The losses in the away-from-home industry were not offset by the increase in sales in retail. However, the first 2021 forecasts give us hope for a return in the current year to the figures recorded before the crisis.

How do you think the relationships with distributors are?

Sensitivity for people and the environment is in some distributors’ DNA, others are catching up by quickly changing attitudes, while others see it as an empty word. The collaboration is going well with the first two ‘categories’, both with the historic brand and with the FSI Mark, which, being so handy, has favored the use of Fairtrade raw materials: cocoa, for example, has been used in many recipes for products such as breakfast cereal, snacks, ice cream, cookies and many other references. In some cases, we have seen the conversion of entire lines of PLs. This has significantly expanded the range of Fairtrade products in distribution, making them easier to find for consumers, something we’re very proud of.

What chains have you established the closest/most effective relationships with?

The first Fairtrade certified coffee was in our market more than 25 years ago thanks to the still fruitful collaboration with Coop Italia. Since then, we’ve pursued our mission to improve the living conditions of those who work in the fields by entering into partnerships with most PL brands, such as Conad, Selex, Carrefour, Despar, Pam, Lidl, In's Mercato, Aldi and others, exceeding 2,500 certified references. We’d say we’re on track.

What is the Fairtrade Premium?

In order to certify their products, companies using our brands commit to pay the organizations of agricultural producers, with no additional profit margin. That is the Fairtrade Premium, whose use is decided collectively by the workers. This year, Nova Coop, one of the cooperatives of the Coop system in the Piedmont Region, received the Fairtrade Best Partner 2020 Award for its commitment to the banana supply chain.l Francesca Liistro, economic journalist specialising in food.

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ON-THE-FIELD EXPERIENCES - PLM

Fairtrade

What does guarantee to the labels that choose to develop PLs together?

The creation of a PL with a solid and credible image is the result of a long, articulated and expensive process where the label risks it all to win consumer’s trust. Sustainability is increasingly becoming an essential element to gain trust. At the same time, when being a mere marketing gimmick with no real change, sustainability may also lead to a rapid and fatal loss of reputation. As Fairtrade, we’ve been working every day for more than 30 years to promote a model of sustainable agriculture through the most rigorous international economic, social and environmental standards. But, above all, we carry out strict inspections through an independent certifier and measure the environmental impact so as to make the change generated for people and the environment clear and traceable.

Thanks to this way of working, we offer a simple and reliable tool that allows brands to put themselves out there in a serene way, a tool that responds to the growing demand for sustainability of those who buy in stores. In Italy, the Fairtrade Mark inspires confidence in 4 out of 5 consumers and is number one among ethical brands in this specific ranking (Nielsen, 2021).

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PLM - FROM THE DISTRIBUTION’S POINT OF VIEW

THERE'S LUCA VACCARO, PL DIRECTOR, TO TALK WITH PL MAGAZINE.

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FROM THE DISTRIBUTION’S POINT OF VIEW - PLM

Selex, private label accounts for 1.4 billion euros

The group is the second largest player in Italian large-scale distribution, with 3,200 points of sale, a 360 million euro investment plan and a PL share of nearly 28%.

Selex Gruppo Commerciale - with a 16.15 billion turnover, up 10.3% in 2019, is the second largest player in Italian large-scale distribution, with 3,200 pos, and a 360 million euro investment plan for 2021 that, when fully operational, will lead to 72 new openings and 135 restructurings. Since January 1,6 new -members have joined Selex - the Sicilian CDS and the 5 companies of Consorzio Sun - for a total number of 18 companies. In this respect, what is the impact of PL? We asked Luca Vaccaro, PL Director.

Let 's start with the key figures ...

In 2020, our private labels grew by 10% over 2019, with sales revenue of €1.4 billion and a share that reached peaks of 28% in several regions. The introduction of Consilia, Sun's private label, which joined the other main brands, such as Selex and Vale, obviously contributed to this trend.

How many references are there?

We’ve exceeded 7,500. In points of sale the number varies depending on the format and, of course, on the size. However, the average range is between 800 and 2,000. Within our wide range of products, the Selex brand is the one that benefits from the most extensive market segmentation, as well as the one that covers the largest number of categories.

What 's new?

We’re definitely focusing on high-end, fresh and extremely fresh, organic and health products. Among the leading brands are Saper di Sapori (typical and local products), Vivi Bene (wellness and free from) and Natura Chiama (organic, ecological, controlled supply chain).

Looking to respond to our consumers in a targeted manner with a precise and dedicated supply, for some years now we have covered categories also with fictional brand names. This is how the cosmetic line, Armonie e benessere, which features both a classic and an organic line, was created. But, the most significant launches in 2020 concerned fruit and vegetables of Saper di Sapori brand, and cold cuts and cheeses in the deli counter. As a result, we’re now dominating the scene of over high-growth markets and even closer to our Members, who provide us with the best specialties of their territory. In addition, we’re covering the 'antibiotic-free' market, both in meat and eggs, strictly from free-range farming. Here, our Natura Chiama brand controls the entire supply chain. All the lines I’ve mentioned, together with ecological detergent products, will be key to our strategies.

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PLM - FROM THE DISTRIBUTION’S POINT OF VIEW

Turnover

16.15

Total PL references

7,500 2021 Investments

360

+10.3% THE KEY FIGURES OF SELEX GRUPPO COMMERCIALE

million euros PL turnover (2020)

1.4

billion euros

Turnover 2020 vs 2019

billion euros

1964

in Founded

2021 Expected turnover trend

+4% Total pos

Total members

3,207

18 Does sustainabilit y match PL? Of course. In Selex we’re working on a variety of objectives, some of which have already been achieved. Let's talk, in the first place, about sustainability at work. All our suppliers in the agricultural, fruit and vegetable sector are enrolled in the Protocollo del Lavoro Agricolo di Qualità (Agricultural Labor Quality Protocol) or equivalent certification. In other categories, we’ve required the use of Grasp, the module of Global Gap, or SA8000 certification. Moreover, we privilege the use of Italian raw materials, included in over 500 references. As already mentioned, we said ‘no’ to cage farming, and not only for the eggs sold as they are, but also for those used as ingredients in industrial processing. In the world of detergents, we have eliminated parabens and microplastics and are now in the process of eliminating matting agents. Going back to food, in collaboration with Catholic University of Piacenza, we’ve launched the website 26

FROM THE DISTRIBUTION’S POINT OF VIEW - PLM

‘comemangio.it’, a real food education portal based on the principles of proper nutrition, Mediterranean diet and food pyramid. On the website, you may also learn how to properly read product labels.

What about packaging?

This is another very important issue. So, we’ve carried out large-scale analyses of the materials used in our brand packaging. For about 18 months, we conducted a series of inspections and interviews with recyclers and disposers, to understand what really happens to our packaging after consumption. The first thing we did was to reduce packaging, which resulted in a 9% container weight loss and an environmental saving of 49 tons of plastic. We replaced 30% of virgin material with recycled material in the target categories. Over 273 tons of non-recyclable packaging was replaced with recyclable materials. We’re currently working on overpacking in our rice category by eliminating the external cardboard box, saving 155 tons of packaging. That’s not it, thanks to new technological solutions and the commitment of our suppliers, who are increasingly sensitive to the subject, our analysis and operations continue.

On average, how long do your relationships with suppliers last ?

Getting longer and longer. As for Selex, that’s about ten years. Over time, largescale distribution has made a significant change in this sense and therefore the turnover of suppliers has been greatly reduced, in order to make room for a true collaboration. Since the PLs are important, we must find the courage to invest in their supply chain, to build a relationship based on respect, fairness and trust, while banishing auctions, but also the idea of low prices as the only point of discussion.

Let 's wrap up with your best sellers ....

The last year has been - do I really need to say it? - absolutely atypical and has brought success to products such as disinfectants, antibacterials and detergents in the broadest sense. It is also well known that, in the food sector, packaged products, imposed weight products and long-life products performed better than others, and this is true both for private labels and for the brand industry. But from a long-term perspective, our real best sellers are all the specialized and highend products, which PL has made truly accessible. A great asset of Selex is the wine department, where our brand, Le vie dell'uva, counts over 70 labels in red, white and sparkling wines. In the wine market, the introduction of large-scale distribution has represented an important moment of clarity and loyalty. This is particularly true for Selex that, thanks to 18 members, widespread throughout the territory, captures all the richness of Italian food and beverage.l

Luca Salomone, professional journalist specialising in consumer goods, distribution, shopping centres and finance.

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PLM - MARKETS

PL enriches

its supply of plant-based products

The pandemic pushed the consumption of vegetable substitutes, from drinks to meat substitutes. A chance taken by different labels to meet the consumer’s needs.

T

he growing attention of the consumer towards health and environmental sustainability consolidated during 2020, a year strongly influenced by the Covid health emergency. These issues are driving the sales of plant-based products, from drinks to meat substitutes and other animal proteins. The market of vegetable drinks, for example, according to IRI data, reached 204 million euros of sell-out last year, growing +10.7% compared to 2019, and developing more than 95,000 tons (+11.1%) of volumes.

Vegetable substitutes for meat, such as ‘plant-based’ burgers and croquettes, have recorded almost 2,900 tons (+7.3%) of sales, that is almost 40 million euros (+9.8%). Large-scale distribution labels are trying to meet the healthy and eco-friendly needs of consumers, providing a richer supply, in terms of selection, convenience and quality.

PRI VATE L ABEL S, THE GROWI NG ROLE OF PL ANT-B A SED DRI NK S In the last few years, Italy has experienced an exponential growth of plant-based drinks, and their main sales drivers were well-being and sustainability. “VerdeMio Biologico plant-based drinks, available exclusively in Sigma, Sisa and Coal supermarkets - states Roberto Romboli, D.it PL Manager - recorded a great positive trend (+15% value) in the last year. In fact, within our sales network, for this category, PL products are leaders in the organic market segment. These references perfectly meet the needs of consumers, either of those with food intolerances, but also, and above all, of those who are more attentive to their physical well-being and that of our planet. Made with raw materials from certified organic agriculture, they are, in fact, highly digestible, nutrient drinks (source of calcium), with low-fat content.”

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MARKETS MERCATI

D.It

D.It is aiming at the vegetable drinks and it’s introducing several new products, with new flavors and new packaging. “We’ve recently decided to enrich our plant-based drinks with VerdeMio Biologico brand – explains Roberto Romboli – with the launch on the market of new two flavors: oat and spelt, to complete our supply. We can say that the main sales are still focused on rice drinks, followed by soy drinks, also because they can benefit from a good number of consumers that are by now loyal and consolidated. Generally speaking, we can say that we’re working a lot on sustainability, to reduce the environmental impact of our packaging, by decreasing the use of plastic and laminated materials and, when possible, by recyclable packaging.”

MORE CONSUMERS GO F OR MI LK SUB STI T UTES Plant-based products concern an increasingly high number of people (10 million households in Italy, equal to 22 million consumers, according to estimates). This number includes not only vegetarians and vegans, but also the so-called ’flexitarian’ that include all those with a flexible food approach, who choose low animal protein consumption and have an eco-sustainable sensitivity. “Substitutes for milk drinks are part of a dynamic market - affirms Luca Vaccaro, Selex PL Director - that both lactose intolerant consumers and vegan consumers have approached in the last few years. The segment has recorded a +8.6% growth. In the meantime, private labels, especially thanks to a wider product range, are growing by 9.5% with a market share that has already exceeded 35% of the total. Our PL products have performed excellent results, with +42% in terms of value from the beginning of the year, in line with the positive trend of 2020.”

P L A N T- B A S E D D R I N KS

+10.7%

u Sales in terms of value: 204 million euros

+11.1%

u Sales in terms of volume: 95 thousands tons

Source: PLM elaboration on IRI data, 2020.

New tastes and new packaging for

- PLM

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CHEESE FROM BAVARIA. se: elkä SE. m m i sc h TEN Bl au G AND IN e, slightly s N e STRO blue che istakable or green veins.

An unm e with blu crumbly

Knowhow from the past and plenty of innovation.

The perfect combination of traditional cheese-making recipes, new-gen technologies and a top-quality ingredient.

So many different variations of the same delight to satisfy even the most discerning palates.

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flavour

d ovia re gion, it cow’s milk recalls s well-ro walnut unded s.

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www.bavieraallitaliana.it

GENUINE

MARKETS

- PLM

Vegetable substitutes to meat

+9.8%

Sales value: about million euros

40 +7.3%

Sales volume: about

2,900 tons

Source: PLM elaboration on IRI data, 2020.

SOY I N SOME DI FFI CULTI ES According to Massimo Gorini, Penny Market Cheese and Dairy Products Senior Buyer, within the vegetable drinks category, 2020 ended with a negative delta of -20% compared to the previous year, a trend that reflects the difficulties encountered, especially in the case of soy, which accounts for almost 50% of the total: “ The rest of the segment, so that of the ‘other drinks’, despite growing, didn't balance the negative trend. This performance seems to be in line with the national market, estimated with a negative trend of -11%, while vegetable substitutes such as burgers and croquettes recorded a slight decrease in 2020, even though our label manages only products under the supplier 's label.”

Since the beginning of the year, the products of the Selex lines are performing +42% in value, in line with the positive trend of 2020.

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ADVERTISING

ANDRIANI

doing business conscientiously

Andriani’s business activities revolve around people’s wellbeing: that of its consumers, employees and stakeholders, and of the Planet too. To satisfy the needs of increasingly knowledgeable consumers, the company invests considerable resources in R&D, conducting stringent checks on food safety, selecting only the finest raw ingredients and devoting the utmost attention to the supply chain, also regarding sustainability.

A NEW FOOD AWARENESS Choosing to produce pasta made from legumes and cereal grains is, indeed, the sign of a clear commit-

ment to a new food awareness that has positive repercussions at every level, and that is why the company, combining innovation and sustainability, is working to help reaching the Agenda 2030 Sustainable Development Goals. Andriani has chosen to embark on a journey of continuous improvement, certified and shared through the annual Sustainable Development Report - the 2020 Report has just been published - which combines the concept of Natural Innovators with that of Open Innovators. It has taken this decision, fully aware of the responsibility of doing business conscientiously, influencing the market and inspiring the entire supply chain by promoting a new awareness of sustainable development matters at every level.

THE DECISION TO ELEVATE AND TO SHARE THE KNOW-HOW In order to reach this goal, Andriani has chosen to leverage its knowhow in order to implement virtuous, innovative processes both internally and in favour of external subjects.

The concept of interdependence, in Andriani’s view, underpins that transformative process of growth

which the business world can no longer avoid, but must, on the contrary, embrace and promote.

TO BECOME A BENEFIT CORPORATION The decision to become a Benefit Corporation underlines Andriani’s commitment to operating for the greater good and not only with a view to profit, as it strives to create value for the benefit of all stakeholders. After all, for a company like Andriani, which operates on the global market, exporting its products to over 30 countries around the world, a virtuous strategic approach based on transparency and interaction is synonymous of a guarantee of stable, homogeneous value.

MARKETS

- PLM

GRE AT AT TENTI ON TOWARDS SUSTAI NABLE FARMI NG Especially for this segment, which includes plant-based products in line with a sustainable diet and attention to physical well-being, large-scale distribution labels expect precise and accurate performances from their manufacturers for their private label lines. “ When it comes to suppliers - continues Massimo Gorini from Penny Market - in addition to traceability, our label is informed about every single action taken by our partners for the improvement of the qualitative process on sustainable cultures. Precisely for this reason, we require the conformity of the productions obtained with organic methods, and the Utz quality standard for our cocoa drink a certification applicable to all those organizations operating in the agricultural chain of tea, coffee and cocoa, which aims at promoting environmental sustainability and the working conditions of the workers.”

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Plant-based drinks with

D.It brand recorded a really positive trend the last year: in value.

+15%

millions consumers in 2020 in Italy

+9.5% PL plant-based product trend in 2020 in Italy

More than

35%

PL Plant-based product share of the total 35

PLM - MARKETS

Selex focusing on healthy products

T

here are lots of PL products by Selex dedicated to the natural and healthy world, to meet the nutritional needs of an active and dynamic consumer in every moment of the day. “We have decided to oversee the segment through the Vivi Bene Selex brand - explains Luca Vaccaro - our line of healthy products for feeling good and fit every day. The range includes seven references, with different tastes and sizes: there are organic products, enriched with calcium and vitamins, and cocoa drinks for a younger target.

We’re also thinking of developing new references with other flavors, adding more sizes, such as 500ml.”

COMPARING PR I VA T E L A BE L S

+

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MARKETS

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AUDI T AND PANEL TEST ON ALL SUPPLI ERS’ PRODUCT S D.It current 190 co-packers are all accurately selected through a process based on document analysis of the necessary requirements.

“Our standards vary based on reference category and certification of production processes - explains Roberto Romboli - and, where possible, we privilege Italian raw materials. We appoint external laboratories to carry out audits in our suppliers’ companies and panel tests on products analyzed that may potentially be added to an already existing range, as well as, on those already on the shelf. As for our PL, the whole development process is Iso 9001 certified.”

NON-NEGOTI ABLE CONDITIONS: CERTIFICATIONS, I TALI ANNES S AND RECYCL ABI LI T Y For all the Selex product lines, Selex has established several non-negotiable conditions with its suppliers. “ The protocol is standard, regardless of the category - explains Luca Vaccaro usually we foster long-term relationships with all our suppliers. There are some fixed terms in the research and development of new products: certified partner companies, Italian raw materials, recyclable packaging with low environmental impact. We often test the new references with 150 families throughout the country to receive feedback on the category leaders with the aim of verifying the organoleptic aspect of our products.” l

Fabio Massi, journalist specialising in retail and mass market issues.

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PLM - FROM THE INDISTRY’S POINT OF VIEW

THERE’S LUCA CUCINIELLO, MARKETING DIRECTOR, TO TALK WITH PL MAGAZINE

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FROM THE INDISTRY’S POINT OF VIEW

- PLM

Deco Industrie:

subcontractor production accounts for 70% of the turnover A highly diversified group, from detergents and personal care to cookies, bread substitutes and piadine, 65% of its revenues come from distributor brands.

D

eco Industrie of Bagnacavallo (Ravenna), which this year celebrates 70 years since its foundation, is a highly diversified group: from cleaning and personal care products to cookies, bread substitutes and piadine. It counts 560 workers - most of them members, being a cooperative - and a turnover of over 180 million euros. PL Magazine asked Luca Cuciniello, Marketing Director, to trace this all-Italian success story.

What have been the most important steps of your company ’ s growth?

It’s a matter of both consistent organic growth and development through external lines.

The first step of this story was in 1951, when the 'Lughesina' cooperative for the production of laundry powders was founded. The first major acquisition was in 1995, when the group took over Ravenna’s Cofar & Pineta, specialized in cookies, which then became our leading brand in this sector. Another strategic move was the acquisition in 2003 by Deco Industrie of Scala of Frosinone, an important brand, which we still own, operating in many segments of the detergent industry. Moreover, in 2013, from Italiana Biscotti Ferrara, we took over the industrial plant of Bondeno producing more than 15,000 packages of cookies every year. Finally, in 2016, the group acquired Packaging Imolese, which opened the doors to the world of cosmetics and personal care, in addition to further expanding in detergents and home care. All this has been accompanied by a continuous growth in employment and marketing activities, innovation, studies and research, development of new products and new technologies. If you also consider its strong diversified portfolio, it’s easy to see why Deco Industrie is today an excellent go-to company for corporate customers too.

Subcontractors? Yes , but not onl y....

That's very true. As I mentioned, we own several brands: Scala, Green Emotion and, for confectionery, Pineta, Saltari and Fornai e Pasticceri, which account for 15-20% of our turnover. As for our revenues, 60-65% are due to private labels, while 15-20% are represented by industrial, national and multinational customers, active in the food, home care, laundry and personal care industries.

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PLM - FROM THE INDISTRY’S POINT OF VIEW

What ’ s more impor tant : food or non-food?

There is an almost perfect balance between these two core businesses, and, in both, the lever of success, even with third-party customers, is the ability to be at the forefront. In laundry, for example, we anticipated the boom of eco-friendly detergents by launching, as early as in 2014, the Green Emotion brand. This has given us a significant competitive advantage. Another example: more than a decade ago, we developed the healthy cookie sector. Essentially, we have worked on our know-how, something that has given us credibility both with the end consumer and with corporate customers.

And abroad?

At the moment, it represents a marginal part of our total turnover and is made up of holiday sweets under our 'Fornai e Pasticceri' brand. The project of further development is certainly still there, just postponed, in light of the catastrophic events linked to the pandemic.

How has subcontracting changed over time?

Even though the relationship between industry and distribution has always been unbalanced and in favor of the latter, the scenario has definationately improved. Today, highly organized companies in particular are called upon to provide high value-added services and managerial skills that range from market research, innovation proposals, up to the development of a 'turnkey' product, from production to packaging design and packaging phase. This process has been boosted by the arrival of high-end private labels, thanks to which the most qualified companies, keeping pace with market developments, have.

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FROM THE INDISTRY’S POINT OF VIEW - PLM

You have recentl y stepped into the world of confectioner y again. Why this choice?

Actually, as we’ve seen, we entered the confectionery industry back in 1995 with Pineta and then, in 2012, with Saltari di Bondeno, which boasts a zero kilometer production and locally-sourced ingredients. At the end of 2019, the brand ‘Fornai e Pasticceri’ was relaunched, with a line of pastry cookies that includes canestrelli, crumiri, chocolate cookies in addition to festive products. However, we have recently taken over the distribution in the Italian market of some products of the English company Burton's Biscuits - including Burton's Digestives and Maryland Cookies - a selected assortment of classic and tasty recipes from the British tradition. Almost at the same time, although there is no link between the two events, Burton's was taken over by Ferrero through the Belgian holding company, Cth. If you asked me the reason for this development, I’d say that, especially following the outbreak of COVID-19, Italians have rediscovered the pleasure of breakfast and of some delicacies that they had not enjoyed outside their homes for a long time. Not to mention the hard work done before the pandemic in the world of gourmet cookies, especially by Ferrero, with Nutella Biscuits, and by Barilla, with Bisco Crema Pan di Stelle.

Let ’ s end with a word on the year 2020...

Deco Industrie operates for the most part in large-scale distribution and we all know that this has been an exceptional year for this channel. So, for us too, it was a good year from the point of view of volumes, even if it was very hard, given the convulsive pace of demand. But what makes us most proud is that we have, once again, remained true to our identity as a company. We are a work cooperative and therefore our mission is to generate work for employees who, for the most part, are also members. But that's not all: in addition to social sustainability, we are at the forefront of environmental and economic sustainability, as shown in our Sustainability Report, now in its eighth edition.

To conclude, I’d like to recall our latest initiative on this very topic, the launch of a Scala limited edition product. In fact, the classic lemon dishwashing detergent celebrated Deco’s 70th anniversary by thanking consumers with the motto: "For 70 years, together, with you, we have been creating job opportunities and protecting the environment."l

Strategic areas:

food, detergents, cosmetics

1

million Consumers per day

300

million Products sold per year

Type of Company:

Joint-stock cooperative company

DECO INDUSTRIE’ INDUSTRIE’S DETAILS Date of birth: 1951

180

over Turnover (million/euros)

560

Head office:

Bagnacavallo (Ravenna)

6

Total production facilities of which 4 food and 2 non-food

Employees

by Luca Salomone

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PLM - QBERG OBSERVATORY

QBerg:

Private Labels to conquer the Italians' breakfast

With a 50% PL share, the United Kingdom is becoming a leader in product development and innovation. However, on the other hand, PLs are used by distributors to compete in terms of prices.

Q

Berg, the Italian Research Institute, leader in price intelligence services and analysis of cross-channel assortment strategies (flyers, physical stores, e-commerce and newsletters), has analyzed, together with IRI, the phenomenon of Private Labels in Hypermarkets, Supermarkets, Superettes and Websites, and compared their 2021 performances to 2020. Specifically, it focused on the competition between Private Labels and Top 5 Vendors and showed that the Breakfast product segment is one of the most affected by such a phenomenon. The Families analyzed are: Coffee (in pods/capsules, in filters, in beans, ground, soluble, barley and derivatives), Milk (fresh, UHT), Tea (in filters, powder, loose), Fruit drinks, Spreads (jam, sweet creams), Cookies, Cereals, Melba toasts, Yogurt (split cups, classic, functional). The parameters used are: QP4* and Display Share. *The Qp4 is the main indicator of flyer visibility. It is strategic because it takes into account factors, such as the number of points of sale, each weighted with its own sell-out potential, and the duration of the flyers. By doing so, the Qp4 does not only represent the visibility of a certain product (of a brand, of a producer, of a category, etc.) but, rather, a real measure of "reachability" of the goods promoted by the consumer.

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QBERG OBSERVATORY - PLM

T

he analysis of the promotions on flyers in the first months of 2021 versus the same period in 2020 highlights that Breakfast products offered by Private Labels are taking hold, compared to Branded products. QP4 share in YTD 2021 equals 19.19% for Private Labels and shows significant growth (+1.08%) compared to YTD 2020. The Top 5 Vendors have also recorded a positive trend, going from 22.71% in 2020 to 23.32% in 2021, with a 0.6% Qp4 Share increase.

Flyer Qp4 share of visibility of PL vs Top 5 for the Breakfast section

u The analysis of the different sectors of Italians' Breakfast shows that Private Labels recorded the highest increases in Qp4 Share in subcategories such as: Tea (in filters, powder, bulk) with a 32.7 delta percentage in YTD 2021 compared to YTD 2020; Coffee (in pods/capsules, in filters, in beans, ground, soluble, barley and derivatives) with a 19.3 percentage delta increase in YTD 2021 versus YTD 2020, as well as in Spreads (fruit jam, sweet creams) with +16.8% Qp4 Share percentage delta.

The Qp4 share increase was to the detriment of the Top 5 vendors, with lower flyer visibility in terms of percentage delta, respectively, of 6.4% for spreadable products, 4.6% for tea products and 2.1% for coffee-related products.

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PLM - QBERG OBSERVATORY

Conversely, two product subcategories bucked the trend:

•

Yogurt (split cups, classic, functional), which recorded a slight Qp4 share de-

•

Cereals/ Melba toasts recording a significant reduction in Qp4 Share (-13.8%

crease, falling from 15.4% in 2020 to 15.2% in 2021, and a 1.4% reduction in percentage delta. This lower flyer visibility of private labels was offset by the higher flyer visibility of the Top 5 vendors (+2.5%). percentage delta) in YTD 2021 compared to YTD 2020. However, Branded products did not benefit from such reduction, as they experienced a 1.4% decrease in Qp4 Share too.

Flyer Qp4 share of visibility of PL vs Top 5 for the Breakfast Sub-category

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QBERG OBSERVATORY - PLM

A

s for the Web, there was a growth in Display Share for Breakfast products of 0.64%, from 19.76% in YTD 2020 to 20.40% in YTD 2021, thus bypassing the Top5 Vendors. In fact, the Top 5 Vendors lost almost as much Display Share as Private Labels, going from 20.74% to 20.09% of YTD 2021 (-0.65%).

Display WEB share of PL vs Top5 for Breakfast segment.

(YTD 2020@Apr, YTD 2021@Apr: Display WEB share; Display WEB share delta)

PL’s best Web visibility performance in YTD 2021, versus YTD 2020, came in Breakfast product categories, where they were marginally outperforming the Top 5 Vendors. Indeed, the highest increases were achieved by the Coffee sub-category (which rose from a Display Share of 11.9% to 15.4%, with a 29.0% increase in percentage terms) and the Cookies sub-category (which rose from a Display Share of 14.7% to 16.6% in YTD 2021, with a delta percentage increase of 12.9%).

On the other hand, Yogurt went from 19.1% Display Share in YTD 2020 to 18.5% in YTD 2021, with a decrease of 3.1%.

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Distribuzione Moderna.

Retail in real time.

The first online newspaper for suppliers and retailers.

www.distribuzionemoderna.info

QBERG OBSERVATORY - PLM

WEB display share of PL vs Top5 Breakfast subcategories (YTD 2020@Apr, YTD 2021@Apr: Display WEB share; Display WEB share delta)

CONCLUSIONS: In Italy, PL products do not have a share of flyer and web visibility and especially of sales comparable to other European countries. Italy is still lagging behind in Europe, where about half of the countries’ on-shelf availability is higher than 40% of the total number of products on display, although PLs are starting to gain more and more visibility, often at the expense of the Top 5 Vendors. More specifically, in QBerg analysis, in YTD 2021, only in some categories of Breakfast products, mainly related to milk and derivatives, the visibility of Private Labels appears to be decreasing compared to YTD 2020, while in almost all the others promotional presence and web visibility have shown significant improvement. The presence in multiple Breakfast product categories together with the considerable wide range provided, all combined with competitive prices for the final consumer, suggests that in Italy there is still ample room for further advancement of PLs within large-scale distribution. However, it’s important for large-scale distribution to continue to offer quality PL products for Breakfast, to reinforce the image of these types of products and to entice consumers to buy more and more PL products.

Fabrizio Pavone, Marketing and Business Development Manager of QBerg 47

PLM - MARKETS

Private label supply for

breakfast foods on the rise

Customers have rediscovered their love for homemade breakfast food. The product categories that recorded the highest increase were melba toasts, cereals, jams and spreads, together with hot drink The health emergency mixes caused by the COVID-19 pandemic in 2020 not only revolutionized some consumption dynamics, but also became an opportunity for many to change their breakfast routine. Based on recent research carried out by Istituto Piepoli - the independent Marketing Research Institute in Italy - one out of five consumers admits having changed their breakfast habits in the last year, dedicating more time to it, eating at home and privileging healthy products. Based on IRI data, in 2020 the breakfast food market

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generated a turnover of about 10.5 billion euros, with a growth of +6% compared to the previous year. Some of the most dynamic value added categories were hot drink mixes (+10.8%), UHT milk (+11%), sweet spreads (+11.2%) and jams (+10%).

In this market, consumers preferred PL products of large-scale distribution brands, which are now offering richer assortments of higher quality, also thanks to partnerships with supplier companies.

D.It

In 2020, in stores an exponential growth is recorded in the sales of base products such as flour, sugar, butter, eggs and yeast.

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PLM - MARKETS

SKYROCK ETI NG PURCHASES OF BASE I NGREDI ENT S One of the most interesting trends of the last year was the rediscovery of breakfast homemade foods. “ We recorded an exponential growth especially in some base products such as flour, sugar, butter, eggs and yeast - said Rober to Romboli, D. it PL Manager - which were mainly used to prepare homemade sweets to eat as an alternative to traditional breakfast. In Sigma, Sisa and Coal points of sale, the categories with the highest growth were melba toasts, cereals, jams and spreads, together with hot drink mixes, linked to purely indoor consumption.”

BRE AK FA ST AT HOME , STI LL THE MOST BELOWED The health emergency was undoubtedly the main factor behind the growth of purchases in the breakfast food sector, and the trend seems to continue. “Our PL recorded significant improvements throughout 2020 - comments Francesco Iuculano, Todis Sales Manager - with breakfast products increasing in both value and volume by over 8%. This confirmed the revamped desire of Italians to eat breakfast at home due to what experienced during the most critical months of the pandemic. This consolidated in the first months of 2021. In fact, we are now seeing a substantially equal trend in terms of volumes and turnover (+0.2%).”

D.IT IS WORKING TO OFFER A NATURAL BREAKFAST D.It breakfast food supply is widening with the addition of healthier and more sustainable products. “The choice of gourmet raw materials and short labels will continue to play a major role - explains Roberto Romboli. Such labels are characterized by few, yet good and simple, ingredients (clean labels). We’ve been working on such aspects for years, not only for our Sigma, Sisa and Coal mainstream lines, but especially on our VerdeMio (organic), Gusto&Passione (premium) and Equilibrio&Piacere (functional/healthy) lines, with the aim to offer a range of products that have more distinguishing features and higher quality.”

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MARKETS

A DYNAMI C YE T NOT HOMOGENEOUS MARK E T According to Luigi Borrelli, Despar Italia Food Product Manager, after a significant increase in the breakfast food market recorded last year (+20%), the stable turnovers as of April 2021 is an extremely positive piece of data for labels’ PL. “Specifically, the turnover generated by cookie sales is stable, while cereals, in particular those of the healthy product line ‘Vitale Scelta Verde’, are increasing. Similarly, melba toasts in 2020 almost doubled their turnover. Whereas, a slightly negative trend was recorded for baked snacks (especially croissants). As for the market of ready-made cakes, it is witnessing a constant increase, recording a growth of over 50%.”

- PLM

u Last year, Todis PL for

breakfast foods increased by over 8% in terms of value and volume compared to 2019 and consolidated in 2021 as well (+0.2%). u In 2020, the turnover

generated by Despar melba toasts almost doubled compared to 2019, while the ready-made cake trend reached a percentage of over +50%.

CO M PARING PR IVA T E L A B EL S

+

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PLM - MARKETS

A WI DER R ANGE OF HE ALTHY PRODUCT S The increasing attention of consumers towards health and well-being can also be seen in the breakfast food market. “ There’s no doubt that all those months of isolation at home due to the pandemic - stated Samanta Brasiello, Iper La grande I PL off -theshelf buyer - led many people to value the benefits of the most important meal of the day. Analyzing both market trends and our data, we found a preference for healthy products. For this reason, we’re working to widen the range of our fresh-squeezed juices, plant-based drinks and to add new flavors to our Greek yogurt.”

Todis, an all-round supply

W

ith its all-round lines, Todis is the leading brand in the breakfast food market. “Our historic brand, ‘I Tesori del Forno’, includes cookies, snacks and croissants - explains Francesco Iuculano - our ‘Canaria’ brand includes a wide variety of fruit juices, while our ‘Colle Maggio’ brand includes yogurts, fresh, UHT and organic milk. Finally, there are the jams of our ‘La Valle delle Delizie’ line and hazelnut jams of our ‘L’Arte delle Specialità’ line. We’re developing products with a strong emphasis on Italian raw materials and we’ll continue to offer organic and healthy foods, such as the ones of our ‘Solo Sano’ line.”

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MARKETS

- PLM

Most performing added value segments

+10.8% Hot drink mixes +11% UHT milk +11.2% Sweet spreads +10% Jams Source: PLM processing based on IRI data, 2020.

A TRUE PARTNERSHI P WI TH THE I NDUSTRY According to Francesco Iuculano from Todis, to develop complete product ranges under the label’s brand, a true partnership and collaboration with the industry is essential. “Following the market’s trends, we’re convinced that you can achieve good results only if you join forces under a ‘value for money’ point of view, which has to be seen in both product price and quality, using signature and sustainable packaging. We constantly work with our suppliers to develop products with healthy raw materials of certified origin and to offer a quality and sustainable private label with great value for money.”

THE HI GH-END, ALWAYS THE QUALI T Y REFERENCE F OR PL S Also Despar has a consolidated relationship and partnership with its suppliers. In fact, it organizes regular meetings with them to discuss and analyze product ranges and turnover trends. “We work with the most important Italian and foreign producers - explains Luigi Borrelli - who are regularly audited and monitored to ensure that they meet all the quality standards required for PLs. To develop our PLs, the quality reference is always the high-end of the market, not only for our premium, but also for our core line, so as to offer our consumers quality products at a fair price.”

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PLM - MARKETS

AUDI TS AND PANEL TESTS FOR ALL SUPPLIERS’ PRODUCTS D.It current 190 co-packers are all accurately selected through a process based on document analysis of the necessary requirements. “Our standards vary based on reference category and certification of production processes - explains Roberto Romboli - and, where possible, we privilege Italian raw materials. We appoint external laboratories to carry out audits in our suppliers’ companies and panel tests on products analyzed that may potentially be added to an already existing range, as well as, on those already on the shelf. As for our PL, the whole development process is Iso 9001 certified.”

A year of innovations for Despar lines In the next months, we will see many new products for breakfast on Despar shelves. “We constantly check our assortments and develop new products - explains Luigi Borrelli - to follow the new market trends. We’re currently working to revolutionize our PL supply of trancini (sweet baked product), which will be completed by the end of the year. We also plan to renew our cookie supply with the addition of new references to be launched in the next months. Finally, by the end of 2021, we’ll widen our breakfast food supply in terms of ready-made cakes and cereals. So much is yet to come!”

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MARKETS

- PLM

WATCHWORD: SHARED VALUES WI TH PARTNERS Iper La grande I private label brand development involves sales, marketing and quality assurance departments. “We work to offer quality products with good value for money. For this reason, we always aim at establishing long-lasting relationships with our partner suppliers - explains Samanta Brasiello sharing with them our same values to ensure quality, traceability and sustainability. This means choosing products made using Italian raw materials and limiting the use of food additives and colorants where possible. For the development of our PL lines, we require safety legal requirements, but, above all, compliance with food safety international standards.” l

by Fabio Massi

+6% Added value breakfast food sales: 10.5 billion euros

Source: PLM processing based on IRI data, 2020.

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