MARCH 2015 / ISSUE one Global Retail Brands Vertex Best of Show The Danger of Vendor Allowances | Managing Private Labels Driving Impulse Purchases www.globalretailmag.com www.vertexawards.org VIEWPOINT / I I seldom have difficulty coming up with a topic or two for this column. There’s always something of inspiration in the issue or the industry at large that peaks my interest. This issue is certainly no exception. So why am I having such a difficult time writing this? The problem is that I feel an obligation to write about something that is not directly related to this industry or this issue. But it is related to who we are and what we stand for. It is difficult to write because it is a difficult subject. The events that took the lives of the journalists at Charlie Hebdo, the shoppers at Hyper Kacher and the Police Officer in Paris shook me to the core. The senseless and tragic loss of life reminds me that I take far too much for granted, both the good and the not so good. I suspect we all do. One minute someone is expressing their opinion at an editors meeting, or shopping for their family’s dinner, and the next minute their friends and family will never see them again. All gone in a flash. All because of a twisted, ignorant mentality and the fear of freedom and individual expression. The news cycle has moved beyond this tragic episode and perhaps it would be easier if we all did as well. But I can’t. Or rather, I won’t. In honor of those who lost their lives for simply expressing their opinion, doing their job, or shopping for their family… 4 global retail brands / march 2015 contents Global Retail Brands / March 2015 / Volume 3 / Number 1 66 Departments Columns Viewpoint / 4 Vasco Brinca / 57 The Challenge of Choice Contributors / 10 Trade Fair Calendar / 12 Notable – Research, Products, News / 14 Global Trade Fairs / 66 Advertiser’s Index / Next Issue Highlights / 70 Features Cover Story / 23 Vertex Retail Brand Award Winners Retail Feature / 54 The Danger of Vendor Allowances Jesse Moen / 58 Building a Superior Artwork Process Koen de Jong / 60 Managing Private Labels Perry Seelert / 61 The Lineage of a Brand Irene Tortorella / 62 Junk Mail vs. Junk Food Richard Kohn / 63 Let’s Try: Winning New Business 23 Jean-Pierre Lacroix / 64 Driving Impulse Purcahases 14 6 global retail brands / MARCH 2015 LIKE THE GREAT MASTERPIECES OF ART, PLMA’S “WORLD OF PRIVATE LABEL” IS UNIQUE AMSTERDAM 19-20 May 2015 To exhibit or attend, contact PLMA today. Telephone +31 20 5753032 or email info@plma.nl. For more information, visit www.plmainternational.com. MARCH 2015 / Volume 3 / Number 1 Phillip Russo Editor / Publisher phillip@globalretailmag.com Jacco van Laar European Director jacco@globalretailmag.com Let innovations breathe new life into private label brands 31st March 1st April 2015 Paris - Porte de Versailles - Hall 3 Charyliz Rodriguez Creative Director charyliz@gmail.com Andrew Quinn Digital Director andrew.quinniii@gmail.com Inta Lasmane Business Development Director inta@globalretailmag.com ContributorS Vasco Brinca Daymon Worldwide vbrinca@daymon.com Crea your te acces free s bad ge Koen de Jong International Private Label Consult kdejong@iplc-europe.com Christopher Durham My Private Brand christopher@mypbrand.com Sabine Geissler GreenTaste.it s.geissler@greentaste.it Richard Kohn richardkohn@gmail.com Jean-Pierre Lacroix Shakatoni Lacroix jplacroix@sld.com David Merrefield DRM Initiatives david.merrefield@gmail.com Jesse Moen SGK Jesse.Moen@sgkinc.com Perry Seelert Emerge perry@emergefromthepack.com Irene Tortorella i.tortorella@libero.it Published and all rights reserved by: Kent Media Group, LLC. Phillip Russo, Principal 240 Central Park South, Suite 9G New York, NY 10019 USA Tel. +1 917 743 6711 All rights reserved under the Library of Congress. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopying and recording, or by any information storage or retrieval system, except as may be expressly permitted in writing by the copyright owner. Opinions expressed by contributors are theirs alone and do not necessarily reflect those of the publisher. Global Retail Brands is published 5 times a year. Editorial Submissions phillip@globalretailmag.com Advertising Inquiries – EUROPE jacco@globalretailmag.com Advertising Inquiries – AFRICA, AMERICAS, ASIA, Australia, MIDDLE EAST phillip@globalretailmag.com, laura@globalretailmag.com Subscription Information phillip@globalretailmag.com www.globalretailmag.com Massimo Zanetti Beverage, through its dedication to vertical integration, provides the highest quality coffee and beverage products to retailers and grocers around the world. With four generations of global coffee manufacture and distribution VERTICAL INTEGRATION HAS ITS PERKS. experience, we are wholly invested in the product that will give your store brand a significant advantage and your bottom line a significant boost. GROW PROCESS TRADE ROAST PACKAGE DISTRIBUTE BREW To discover how Massimo Zanetti Beverage can positively shape your beverage experience, from our coffee farms to your branded coffee program, visit mzb-usa.com today. 2012 Award of Excellence Partnership, Grocery Program 2013 Award of Excellence Partnership, Quality Assurance Program CONTACT SUSAN LAMBERT, BUSINESS DEVELOPMENT MANAGER – CORPORATE BRANDS corporatebrands@mzb-usa.com | 757.215.7369 | www.mzb-usa.com contributors / Vasco Brinca Daymon Worldwide’s Senior Vice President of International, leads expansion and management of private brand operations in Europe, Africa, Middle East and Latin/South America. He joined Daymon in 2006 after 10 years with the Jerónimo Martins Group, both in Portugal and Poland. Vasco has vast experience in retail, including operations, category management, sourcing, as well as strategy & execution. richard kohn Richard is an expert in global marketing and an acknowledged strategic brand leader. He’s held senior management positions in A brand CPG companies and led international marketing and strategy teams across CPG, consumer durable and business services companies. richardkohn@gmail.com Jean-Pierre Lacroix As president of branding and design agency Shikatani Lacroix, JeanPierre Lacroix specialises in brand strategy for corporate, packaging and retail clients. He has spent the past 35 years helping organisations see opportunities in the challenges versus challenges in the opportunity. He champions the roles design and branding play in building connections by studying purchase behaviours to help brands connect with consumers. JESSE MOEN Brings 10+ years of expertise in brand development/deployment and in the practice of continuous improvement and is the driving force behind the success of the SGK Continuous Improvement Practice (CIP). Jesse earned a MA from the University of California, Berkeley and holds a Lean/Six Sigma Black Belt from the University of St. Thomas. www.sgkinc.com; Jesse.Moen@sgkinc.com DAVID MERREFIELD David is principal of DRM Initiatives, Inc., a consulting group that focuses on food retailing and related issues. His experience includes many years as the top editor at “Supermarket News,” the largest trade publication of its type in the United States. He was corporate vice president of the publication’s parent company. He is based in New York City. Koen De Jong Founding director of International Private Label Consult, a boutique consulting firm specialized in strategic consult and project management support to manufacturers and retailers. With offices in France, The Netherlands, Germany and Spain IPLC helps its clients with a pragmatic and action oriented approach. Christopher Durham Founder, My Private Brand /Vice President Retail Brands, Theory House Christopher Durham is a author, consultant, strategist and retailer with close to 20 years of real-world retail and corporate experience creating, launching and building numerous billion dollar Private Brands. My Private Brand, seeks to drive the changing Private Brand landscape, focusing on the emerging art and science of Private Brand management. Sabine Geissler Has resided in Bologna, Italy, nearly twenty years. She is now a member of the Council Chamber of Commerce Bologna and has been FNAARC Bologna VP since 2008. She is the founding owner of: GreenTaste.it, an international sales and consultancy for the agri-food industry with particular attention to organic, all-natural and sustainable products. Perry Seelert A retail branding and marketing expert, with a passion for challenging conventional strategy and truths. Perry is the Strategic Partner and Co-founder of Emerge, a strategic marketing consultancy dedicated to helping Retailers, Manufacturers and Services grow exponentially and differentiate with purpose. You can contact Perry at perry@ emergefromthepack.com Irene Tortorella Born on the tip of the Italian boot in 1985, Irene spent most of her life trying to avoid conversations about the international stereotype of Italian mafia, whether she was in Korea, Japan, Serbia, Poland or an Albert Heijn in Amsterdam. She is now a Korean language speaking flight attendant for British Airways who cultivates an ill-concealed passion for social travel and creative marketing strategies. 10 global retail brands / march 2015 an event by: www.bolognafiere.it FOCUSING ON PRIVATE LABEL ALLIANCE 057/2014 MRCX14E LEADER IN THE MEDITERRANEAN AREA MARCA 2015 SPONSORSHIP With the Patronage of Show Office: event Calendar / COSMOPACK/COSMOPROF WORLDWIDE BOLOGNA March March APRIL 3–6 FOODEX Japan Makuhari Messe Tokyo, Japan www3.jma.or.jp/foodex/en/ 19 – 23 Cosmopack/Cosmoprof Worldwide Bologna (page 69) Bologna Fair District Bologna, Italy www.cosmoprof.com. 28-30 SIAL Canada (page 68) Direct Energy Center Toronto, Canada www.sialcanada.com 11 – 12 Wabel Frozen Summit (page 68) Hilton Charles de Gaulle Airport Paris, France www.wabel.com 13-18 Internorga Hamburg Messe Hamburg, Germany www.internorga.com 19 – 22 PLMA’s Annual Meeting and Leadership Conference Hyatt Regency Scottsdale at Gainey Ranch Scottsdale, AZ www.plma.com May 25 – 26 IPLS Crocus Expo Center Moscow, Russia www.ipls-russia.ru/en/ 31 – 1 April MDD Expo (page 67) Paris Porte de Versailles Paris, France www.mdd-expo.com April 21-23 Seafood Expo Global Brussels, Belgium www.euroseafood.com 19-20 PLMA’s World of Private Label (page 66) RAI Amsterdam Amsterdam, Netherlands www.plmainternational.com June 29-30 PLME (page 67) Targi Kielce Exhibition Center Kielce, Poland www.targikielce.pl. 25-26 Indian Retail Congress Hotel Hyatt Regency Gurgaon New Delhi, India www.indianretailer.com/ congress2015/ PLME 12 global retail brands / MARCH 2015 MARCH 2015 19TH-22NDCOSMOPACK BOLOGNA (ITALY) FAIR DISTRICT w w w . c o s m o p ro f . c o m Organiser - SoGeCos s.p.a. - Milan - Italy - ph. +39.02.796.420 fax +39.02.795.036 - sogecos@cosmoprof.it - company of in cooperation with NOTEable / Cisco Research Reveals Hyper-Relevance as Key to Winning the Digital Consumer Retailers who offer Internet of Everything experiences can capture a 15.6 percent profit improvement >> Cisco released survey findings from 1,240 retail consumers in the U.S. and U.K. that uncover their preferences for Internet of Everything (IoE) enabled retail experiences and provides insight to help retailers capture the new digital consumer through IoE innovations fueled by mobility, video, and analytics. The research is part of a global study that when fully completed will survey 6,000 consumers in 10 countries. Customers Want a Convenient, Contextually Relevant Shopping Experience >> Most shoppers want innovations that improve convenience and efficiency, extending beyond personalization into hyper-relevance. Hyper-relevance delivers value—such as greater savings, efficiency, or engagement—in real time throughout the shopping lifecycle, using analytics to determine the experience that best suits the customer’s context (where he is, what she is looking to accomplish in that moment). Analytics helps retailers track in-store patterns and use existing video technology to determine, for example, where shoppers are spending more time in the store and which shelves need restocking, information that can immediately be used to improve shoppers’ experience and drive better store performance. When asked to identify primary areas for in store retail improvements, 39 percent of consumers identified the process of selecting and purchasing goods - for example, having the products they want in stock and an efficient checkout process. By contrast, 13 percent chose a more personalized shopping experience. Digital Consumers Exhibit Strong Interest in IoE-Enabled Experiences, Creating Savings, Efficiency and Engagement >> To help provide guidance to retailers on where and how to make their strategic innovation investments, Cisco tested 19 different shopping concepts with consumers in its survey. Together, these provide a snapshot of consumer receptivity to new IoE-enabled innovations in the shopping experience. These use cases are at the heart of the IoE value that is up for grabs for retailers in terms of revenue uplift and employee productivity. For an illustrative $20 billion retailer, these use cases drive a total gross annual value opportunity of $312 million and a 15.6 percent improvement in profitability. “If a retailer thinks that at some point this is going to slow down, and that they have time to wait and then jump 14 global retail brands / MARCH 2015 By Implementing Key IoE-Enabled Solutions, Retailers Can Generate Potential EBIT* Gains of ~15.6%** For an illustrative omnichannel retailer… $142M $20 billion revenue 7% EBIT margin + $170M Gross annual value opportunity 113 million square feet of retail selling space OpEx reduction = $312M - 900 stores 120,000+ employees Revenue $93M Annual enabling costs = $219M Net annual EBIT opportunity *Earnings Before Interest and Taxes **Based on 19 IoE concepts featured in IoE Retail Survey, January 2015 © 2014 2015 Cisco and/or its affiliates. All rights reserved. Cisco Confidential Public 21 Technology and Evolving Consumer Behaviors Are Reshaping the Retail Landscape Mobile Social Mobile commerce grew 47% in Q2 2014, far outpacing e-commerce (10%) and total retail (3%) 94% of U.S. omnichannel retailers had a company Facebook page as of Q1 2014 [comScore, 2014] [the e-tailing group, 2014] Apps Big Data 64% of U.S. shoppers use a mobile retail app while shopping at least once a week 88% of retailers foresee significant growth of data captured by their networks [Cisco Consulting Services, 2015] [Cisco Consulting Services, 2014] © 2015 Cisco and/or its affiliates. All rights reserved. Cisco Public IoE-Enabled Retail Solutions Offer Rich, Context-Aware Shopping Experiences Illustrative Examples © 2015 Cisco and/or its affiliates. All rights reserved. Cisco Public in, they’re wrong. Because these rates of adoption — the speed at which technology is moving — is becoming more exponential and will continue to do so.” Doug Stephens, Founder, Retail Prophet For more information sarahb@mix-pr.com GRB 12 4 NOW AVAILABLE ON AMAZON.COM The groundbreaking first book from My Private Brand founder Christopher Durham. The book features private brand strategy and insight with profiles of the 52 best retail owned brands in the United States. NOTEable / Will You Survive Retail Consolidation? According to a story in My Private Brand (www.mypbrand.com), “While retail mergers and acquisitions are not a new phenomenon, the speed and scope at which they occur seems to be picking up steam. McCormick to Buy Italian Spice Maker Drogheria & Alimentari The Baltimore Business Journal’s James Briggs reported that, “McCormick & Co. Inc. is adding some Italian flavor to its portfolio of spices. The Sparks-based company on Friday announced it has agreed to acquire Drogheria & Alimentari for $97 million. The deal, which is expected to close in May, will expand McCormick’s presence in Europe. Drogheria & Alimentari is a private company that manufactures spices in Florence, Italy, and has annual sales of $57 million. It does 80 percent of its business in Italy and generates 20 percent of its sales through exports to 60 countries. The company controls about one-third of the spice and seasoning market in Italy, McCormick CEO Alan Wilson (shown above) said in a statement. “We anticipate strong growth for these premium products, particularly in the U.S. and key international markets where consumers are seeking unique and authentic ethnic flavors,” Wilson said. The deal comes as McCormick has been growing its international sales. McCormick’s net income in 2014 rose 12.6 percent to $437.9 million thanks in part to to strong sales in Europe, the Middle East, Africa and especially China. GRB 16 global retail brands / MARCH 2015 According to a PwC’s U.S. Retail and Consumer Deals Insights 2014 report, the volume of acquisitions was up 52%, with the value of these transactions up 104%. Consider the major purchases, acquisitions, take-overs or closings that occurred in the past years: Albertsons and Safeway, Kroger and Harris Teeter, Office Depot and Office Max just to name a few. And with the recent acquisition of Family Dollar by Dollar Tree and the announcement of Staples purchasing Office Depot Max, 2015 is promising to be another year of shifting retail landscapes”. Retail consolidations are changing the face of today’s competitive retail landscape, and there is no sign of letting up. With these challenges also come opportunities. For the complete story, visit www.myprbrand.com GRB UL ClearView® Introduced According to a company press release, “Information & Insights a division of the global safety science leader UL introduced UL ClearView® an online platform designed to help dietary supplement manufacturers drive the recognition of their quality assurance programs to facilitate faster, easier and more informed buyer acceptance of their dietary supplement products. This online proprietary platform: Emphasizes regulatory compliance of finished products; Highlights quality assurance programs to prospective clients and Showcases compliance to retailer programs. The global economy and increased overseas sourcing has created complex and opaque supply chains just at a time when heightened regulatory and media attention and consumer awareness are holding dietary supplement producers to higher standards. UL ClearView’s supply chain validation and independent audits help to mitigate the complex realities of today’s volatile world and safeguard laborers and the public. “Voluntary self-regulation and visibility into a quality assurance program can help mitigate oversight and ultimately increase consumer confidence “ says Michael O’Hara, General Manager of Global Nutraceuticals for UL. “UL ClearView is designed to help drive transparency in dietary supplement programs by providing a window into product and supplier compliance to regulatory and retailer requirements all in one place, online. Through this single source of information UL ClearView helps facilitate faster data exchange to open lines of communication while enabling commerce.” GRB NOTEable / The Best Private Brand Packaging Company You’ve Never Heard of? Your Premium Brand Deserves a Better Cup of Coffee Jupiter Prestige Group (JPG) is a global leader in developing and producing private brand packaging for both food and general merchandise. Massimo Zanetti Beverage knows how to please the most discerning coffee consumer, so it’s no wonder that their latest offering, The Filter Cup™, is the preferred single serve packaging*. The Filter Cup™ features an open-filter design so you can enjoy more coffee aroma and richer flavor. And it’s made with 37% less plastic than the traditional K-CUP®**, making it the smarter choice for our environment. Quite simply, it’s A Better Cup by Design™ that delivers quality coffee cup after cup. They provide original brand design, structural design, packaging graphics and photography as well as manage digital artwork production, print processes while color managing brands for some of the world’s largest retailers and brands. They become their client’s “Brand Champion,” making certain that their brand not only stands out on the shelf, but is also consistent across program rollouts. They tailor their services to each customer to ensure consistency, streamline processes and save time and money. The result is outstanding brand quality and continuity no matter where in the world the package is produced. Clients range from the largest retailer in the world to small start up companies. No matter the customer, their goal is always the same - to provide the highest quality brand standards in packaging so customers can focus on their core business. One of their customers recently told them that they thought our JPG was “the best private brand packaging company that they’d never heard of.” They’d like to change that. You can visit them at jpgglobal.net to learn more. GRB Since its introduction, the Filter Cup™ has become the consumerpreferred package and, in a recent study, was chosen 3:1 over traditional K-CUPS®**. Consumers have expressed an affinity for the eco-friendly packaging and the resealable foil bag which stores, preserves and guarantees freshness of the coffee.* This new single serve format is leading the growth in this dynamic category, up 82% in year over year dollar performance.*** Massimo Zanetti Beverage offers the Filter Cup™ single serve packaging in a wide variety of premium flavored, origin and certified single serve coffees. Contact Susan Lambert at 757-215-7369 or email slambert@ mzb-usa.com | mzb-usa.com GRB *The Fryman Group in Home Study of Current K-CUP® users, October 2013. **Keurig is a trademark of Keurig Green Mountain, Inc. Massimo Zanetti Beverage Filter Cups™ are not affiliated with Keurig Green Mountain, Inc. ***Nielsen US Food – Latest 52 weeks ending 1/17/2015. 18 global retail brands / MARCH 2015 FROM BACK OF THE NAPKIN TO FRONT OF THE AISLE You have to start with a great product—and no one knows that better than Daymon Worldwide, a leader in branding, sourcing and cultivating relationships since the 1970s. But what makes it to your shelf is the culmination of a finely-constructed process. To be really successful in this environment, you need the kind of strategy, insight, consumer engagement—brand building—that Daymon offers under one company. Tools and relationships that we’ve developed over decades, building brands for retailers across continents. You need the power of Daymon’s unique combination of five distinct companies, working for you, on your brand. Even if all you bring us is your napkin sketch. YOUR GLOBAL RETAIL PARTNER. PRIVATE BRAND DEVELOPMENT // STRATEGY & BRANDING // SOURCING & LOGISTICS RETAIL SERVICES // CONSUMER EXPERIENCE MARKETING 6 continents 50 countries 14 channels of trade 3,000,000 consumer events www.daymon.com 1 Daymon NOTEable / Book Preview During the private label show in Paris: MDD Expo, Koen de Jong will present his new book: Managing Private Labels, sharing knowledge from research and practice. Managing Private Labels is likely to be the most comprehensive publication on retailer brands published to date. Many years of working in the international private label industry as well as extensive research lay at the basis of this book. It shares practical knowledge and experience that will provide a deeper understanding of the complexity of running a private label business in an extremely competitive market. Special attention is given to the discounter retail format and recommendations for mainstream retailers to counterbalance this phenomenon. Other topics include taking steps to improve supplier-retailer relations, the role of packaging design and private label in emerging markets. Hard cover book is full color, 205 pages including over 180 photos; only available via: www.iplc-europe.com In our next issue, we’ll cover the book more extensively. GRB 20 global retail brands / MARCH 2015 More than 37,000 trade visitors from 141 countries Visited ISM 2015 Around 37,000 trade visitors, an increase of 6% over 2014, came to experience and learn at the 45th gathering of the world’s largest and most important trade fair for sweets and snacks. Foreign visitors remained stable at 67%. “This year the ISM has once again made it clear how important the fair is for the confectionary trade both nationally and internationally,” commented Katharina C Hamma, the managing director of Koelnmesse GmbH, referring to the positive results of the ISM 2015. This is because the fair was also able to record some modest growth in the number of exhibitors. According to exhibitors, the quality of the trade guests at the ISM was consistently high. This is also confirmed by the visitor questionnaires as well as registration details. Top purchasers again came from abroad from large trading companies and importers. German trade was also strongly represented once again. As one supplier confirmed: “at ISM in Cologne we reach our important trading partners, whether from Germany or one of our many export markets”. As ever, there was demand for innovative products and marketing concepts, which the branch once again had on offer for its purchasers. The diverse range of offers at the ISM 2015 was underscored by, amongst other items, the special presentation “New Product Showcase”, at which around 90 businesses participated. New product segments for the themes of snacking, breakfast and coffee were on display at the ISM for the first time. These segments were received very positively by both exhibitors and visitors alike. “The range of offers has expanded, providing new possibilities for presenting and purchasing,” notes one exhibitor displaying in Cologne for the first time as part of the new product segments. “The response in trade was resounding,” adds another supplier. “We are already planning our next appearance at the ISM.” GRB Record Attendance at 2015 MarcabyBologna Fiere MarcabyBolognaFiere enjoyed record numbers at its 11th edition held at the Bologna Fiere on 14 and 15 January, with 6,886 trade visitors (+4.3% on the last edition), and 481 exhibitors (+6%). Exhibition space was decidedly up too, with a 9.5% increase on 2014. These figures confirm the growing importance of MarcabyBolognaFiere as the place where industry professionals and market leaders can enjoy two days of exchange, business, workshops and debates, an opportunity for manufacturers to meet with the Italian and international retail system. “MarcabyBolognaFiere traditionally opens the BolognaFiere season, and did so this year with great success,” - said Duccio Campagnoli, BolognaFiere Chairman (Shown above at the International Buyer’s Lounge, along with Patrick Capriati, Promotion Manager, Italian Trade Agency, Chicago Office) – “especially with an increase in the presence of international buyers of major retailers from USA, Russia, Germany and Canada. Of particular note were the 564 B2B meetings between exhibitors and highly qualified foreign Buyers. Large retailers included Doyle Importation Inc. (Canada), Seventh Continent Jsc (Russia’s fifth largest chain store), X 5 Retail Group, Azbuka Vkusa, Bahetle, Norman-viviat, H-E-B, Raley’s and Daymon (USA),, Müller Moers GmbH&Co.KG and Aktiv Markt (Germany). The 11th Private Label Report on the Italian retail market, developed by Adem Lab-Parma University, was presented by Guido Cristini, the scientific coordinator of the Private Label Observatory for the Italian market. Gianmaria Marzoli, Vice-President of IRI, the world-class provider of massmarket information also gave a presentation. The report underlined how in Europe private label products had a 30-point price advantage over industry brands and that Private Label market share was stable at around 18%. Moreover, private label products had bucked the trend of overall decline, with premium products growing 7.1% and organic products 8.5% in value. The product categories continued on page 65 >> www.globalretailmag.com 21 NOTEable / Protection of Food Specialties: The Different European Approach It is well known that the system chosen by Europe to protect its most significant and valuable food specialties is based on protection of Geographical Indications (GIs): that is, every quality production, which complies with given criteria such as strict quality standards, territorial manufacturing and a longstanding tradition is recorded as a PDO (Protected Denomination of Origin) or a PGI (Protected Geographical Indication). Such a protection is given not to a single brand, but to the product itself (Parmigiano Reggiano, Prosciutto di Parma, Aceto Balsamico di Modena or Camembert), and it protects all manufacturers of that given product. Protection is very broad, and it shields from imitations, counterfeiting and evocation: this means, as an example, that in Europe no producer can manufacture a cheese called ‘Parmesan’ since it reminds ‘Parmigiano Reggiano’ in the consumers’ mind. As a reward for such a protection, manufacturers have to maintain and certify their products to stay within high quality standards, sourcing ingredients in restricted areas, using traditional manufacturing systems, and submitting all their production to very strict checks by Control Authorities: a costly system, aimed to guarantee that GIs always guarantee a superior quality. All GI products must carry the words ‘DOP’ (PDO) or ‘IGP’ (PGI) on their packaging, and more and more of them are also carrying the flashy European logos (yellow/red for PDOs, yellow/blue for PGIs, shown above), so now consumers can more easily identify them on shelves. The US intellectual property system is somewhat different, and while strong protection is given to brands, a much feebler, or no protection at all is offered to GIs: try to imagine what kind of strong protection is enjoyed by some famous names, such as ‘Coke’ or ‘Philadelphia’ (this last by the way being a cheese spread with no actual ties with the town in Pennsylvania), while there are only a few attempts to protect denominations like ‘Idaho potatoes’ or ‘Kona coffee’ from Hawaii. 22 global retail brands / MARCH 2015 Such a difference between the European and US systems creates a different treatment of products: what in Europe is considered a counterfeit, and insofar banned from commerce, in the US is legitimately on market, so some great confusion might arise. In the example made before, a cheese called ‘Parmesan’ is in fact present on the shelves of many US stores, and consumers can buy it, making reference to Parmigiano Reggiano in their mind. Many of them might not even know that the product in their hands is not the original one, however they for sure would taste a huge difference in a comparative tasting. TTIP Treaties between the US and European Governments >> These differences among legal systems have been noted, and a brisk political discussion is under course, in the socalled TTIP treaties between the US and European governments: nevertheless, it is my opinion that US Supermarkets should be increasingly aware of the superior quality offered by GIs products: they are multi-certified, and their quality is assured by the system,not only by manufacturers. There is a positive trend toward private labels, and within private labels there are some emerging trends toward a quality segmentation: buyers should know that focusing on PDOs and PGIs products will surely increase the quality of their overall offer, and the image of their own brand. GRB Cesare Mazzetti is the President of Fondazione Qualivita, an Italian Foundation which has been established to sustain, support and distribute information about the GI product. Every year, the Qualivita Atlas of Italian Food Specialties reports about the status of all the Italian GIs (both in wine and food sectors), which are over 700. Qualivita supports the GIs system at a political level, taking part in discussions in the highest ltalian and EU meeting rooms Winners edition Brought to you by + www.globalretailmag.com 23 T H E W INNERS A RE . . . T The response to this year’s Vertex Awards was overwhelming with more than 250 entries from 21 countries and 55 retailers. This year’s winners included the first ever entrants from Asia and Africa joining a truly global list of entrants from Angola, Australia, Brazil, Canada, China, Denmark, Hong Kong, Italy, Malaysia, the Middle East, The Netherlands, New Zealand, Poland, Portugal, Singapore, Spain, Taiwan, the United Kingdom and the United States. We saw exciting growth in the New Brand, Brand Redesign and Packaged Goods categories as well as in the Licensed or Co-Brand, Beverages: Alcoholic, Pet Products, Home Décor, Entertainment and Health Care categories. Fred Richards, Kevin Shaw, Zhou Wenjun and Adrian Whitefoord. Qualifying designs must have been introduced in-store between November 2013 and November 2014. Judges scored each entry on five criteria: design, information architecture, originality, Take a look and you will discover outstanding structure, and x-factor. An overall numeric score design from all around the world. Retailers are was then assigned to each entry. Gold, Silver and playing to win and creating compelling customerBronze Awards were focused brands. awarded based on In particular, we would the numeric score, like to congratulate the as a result, there Retailers are playing to overall “Best in Show” are some multiple winner Eroski and their win and they are creating winners at a given agency, Supperstudio, level. compelling customer focused brands. both hailing from The scoring system Spain. Their work was developed to reward the best Private Brand proves that great Retail Brands are engaging, package design in the world, not mediocrity. entertaining and truly special. We also call your To protect the integrity of the process, judges attention to our Publisher’s Choice, the stunning were not allowed to vote on work by their own redesign of Mannings-Guardian’s Distilled Water by agency. All voting was done online and votes were Passionfruit, Hong Kong. collected and tabulated independently, by VOCCII. We would like to thank our esteemed panel of This competition has been a labor of love. We know design experts from around the world who took you will find inspiration in the winners and we hope their charge to heart and devoted their time and to see your entry next year. energy to selecting the best of the best: Rick Barrack, Maggie Bean, Paula Bunny, Thank You, Don Childs, Maria Dubuc, Masanori Eto, Ruth Galloway, Jean-Pierre Lacroix, Loe Limpens, Angelo Morano, Glenn Pfiefer, Gustavo Piqueira, Christopher Durham Phillip Russo Founder, My Private Brand VP of Retail Brands Theory House Founder, Global Retail Brands Principal, Kent Media 24 global retail brands / MARCH 2015 B EST O F S H O W Eroski CATEGORY: Best of Show & B1. New Brand RETAILER: Eroski COUNTRY: Spain AGENCY: Supperstudio www.globalretailmag.com 25 P U B L IS H ER ’ S C H OI C E Mannings Water BEFORE 26 global retail brands / MARCH 2015 CATEGORY: B2. Redesigned Brand & G12. Beverages: Non-Alcoholic RETAILER: Mannings-Guardian COUNTRY: Hong Kong AGENCY: Passionfruit Asia As the agency built for retail, we create innovative brand strategies that identify high-value opportunities with shoppers and address critical marketing challenges. We power those brands with breakthrough creative, portfolio strategy, naming, package design, in-store experiences, social media and activation platforms. THE AGENCY BUILT FOR RETAIL theoryhouse.com +1 704 576 6059 vertex winners... Eroski Childrens Cereals CATEGORY: G9. Packaged Goods RETAILER: Eroski COUNTRY: Spain AGENCY: Supperstudio Eroski ICE CREAM CONES CATEGORY: G9. Packaged Goods RETAILER: Eroski COUNTRY: Spain AGENCY: Supperstudio 28 global retail brands / MARCH 2015 Eroski Nappies CATEGORY: P5. Health Care RETAILER: Eroski COUNTRY: Spain AGENCY: Supperstudio Eroski juices CATEGORY: G12. Beverages: Non-Alcoholic RETAILER: Eroski COUNTRY: Spain AGENCY: Supperstudio www.globalretailmag.com 29 vertex winners... HUB - Exclusively at Woolworths CATEGORY: H17. Electronics RETAILER: Woolworths COUNTRY: Australia AGENCY: Marque Brand Consultants Easy Hear & Easy Wear CATEGORY: P5. Health Care RETAILER: Hans Anders COUNTRY: Netherlands AGENCY: OD 30 global retail brands / MARCH 2015 Brigaderia Gelado CATEGORY: G10. Frozen RETAILER: Brigaderia COUNTRY: Brazil AGENCY: Casa Rex Jumbo Paper Toy Chips CATEGORY: G9. Packaged Goods RETAILER: Jumbo Supermarkets COUNTRY: Netherlands AGENCY: OD www.globalretailmag.com 31 vertex winners... Viñas Altas - Toro Wine CATEGORY: G11. Beverages: Alcoholic RETAILER: El Corte Inglés COUNTRY: Spain AGENCY: Supperstudio Brittains Vodka CATEGORY: G12. Beverages: Alcoholic RETAILER: Fortnum & Mason COUNTRY: United Kingdom AGENCY: Storm Brand Design 32 global retail brands / MARCH 2015 BEFORE Waitrose Pure CATEGORY: B2. Redesigned Brand & P6. Body Care RETAILER: Waitrose COUNTRY: United Kingdom AGENCY: DewGibbons + Partners Continente 100% National Meat CATEGORY: G8. Fresh RETAILER: Sonae MC COUNTRY: Portugal AGENCY: Sonae MC’s Design Team www.globalretailmag.com 33 vertex winners... First Class MIx Ice boxes CATEGORY: G10. Frozen RETAILER: Dagrofa COUNTRY: Denmark AGENCY: Kontrapunkt Oink, oink CATEGORY: G9. Packaged Goods RETAILER: Young and Beautifood COUNTRY: Spain AGENCY: Supperstudio 34 global retail brands / MARCH 2015 Brands aren’t built ’ they’re grown. Put our green thumbs to work for your brand and watch it blossom. From strategy to shelf, MBD is uniquely qualified to help you realize your private label brand vision. www.mbdesign.com Boston | San Diego | Phoenix | China vertex winners... Viñas Altas Cariñena wine CATEGORY: G11. Beverages: Alcoholic RETAILER: El Corte Inglés COUNTRY: Spain AGENCY: Supperstudio Created by Jamie CATEGORY: B3. Licensed or Co-Brand RETAILER: Woolworths COUNTRY: Australia AGENCY: Marque Brand Consultants 36 global retail brands / MARCH 2015 Tesco Kids Tissues CATEGORY: P5. Health Care RETAILER: TESCO COUNTRY: United Kingdom AGENCY: Pemberton & Whitefoord LLP Belle body lotions CATEGORY: P6. Body Care RETAILER: Eroski COUNTRY: Spain AGENCY: Supperstudio www.globalretailmag.com 37 vertex winners... GESTUS CATEGORY: B1. New Brand RETAILER: Dagrofa COUNTRY: Denmark AGENCY: Sunrise Reklamebureau A/S NEU CATEGORY: B1. New Brand RETAILER: Foodstuffs Own Brands COUNTRY: New Zealand AGENCY: Brother Design Ltd 38 global retail brands / MARCH 2015 The evolution of private label brands Discover how we evolved packaging and brand identity of one of the largest private label personal care brands in North America. desig n i ng compel l i ng at-pu rchase moment s t hat con nec t i n t he bl i n k of a n eye www.sld.com www.sldesignlounge.com vertex winners... Fresh & Easy Sriracha CATEGORY: G9. Packaged Goods RETAILER: Fresh & Easy COUNTRY: United States AGENCY: The Creative Pack Refreshe ICE CATEGORY: G12. Beverages: Non-Alcoholic RETAILER: Safeway COUNTRY: United States AGENCY: Anthem Worldwide 40 global retail brands / MARCH 2015 Pams Confectionery CATEGORY: G9. Packaged Goods RETAILER: Foodstuffs COUNTRY: New Zealand AGENCY: Brother Design Ltd CRYSTAL MOIST Stop & Shop 100th CATEGORY: B2. Redesigned Brand RETAILER: Hong Kong COUNTRY: Mannings China (Dairy Farm) AGENCY: Innovation Kitchen CATEGORY: G9. Packaged Goods RETAILER: Ahold USA COUNTRY: United States AGENCY: Group360 www.globalretailmag.com 41 vertex winners... Jumbo Pet Food Gestus Fresh Juice CATEGORY: G13. Pet Products RETAILER: Jumbo Supermarkets COUNTRY: Netherlands AGENCY: OD CATEGORY: G12. Beverages: Non-Alcoholic RETAILER: Dagrofa COUNTRY: Denmark AGENCY: Kontrapunkt Brava Nina Ottosson for Petco CATEGORY: B1. New Brand RETAILER: Academy Sports + Outdoors COUNTRY: United States AGENCY: Academy Packaging Design CATEGORY: B3. Licensed or Co-Brand RETAILER: Petco and Unleashed by Petco COUNTRY: United States AGENCY: In-house creative packaging team 42 global retail brands / MARCH 2015 Irresistibles Life Brand CATEGORY: B2. Redesigned RETAILER: BrandMetro, Super C, Food Basics COUNTRY: Canada AGENCY: St. Joseph Communications CATEGORY: B2. Redesigned Brand RETAILER: Shoppers Drug Mart COUNTRY: Canada AGENCY: Shikatani Lacroix Archer Farms Inspire - Exclusively to Woolworths CATEGORY: B2. Redesigned Brand RETAILER: Target COUNTRY: United States AGENCY: Pearlfisher CATEGORY: H16. Home décor RETAILER: Woolworths COUNTRY: Australia AGENCY: Marque Brand Consultants www.globalretailmag.com 43 vertex winners... Kroger Cheese Snacks Continente’s Potatoes CATEGORY: G9. Packaged Goods RETAILER: The Kroger Co. COUNTRY: United States AGENCY: The Kroger Co. CATEGORY: G8. Fresh RETAILER: Sonae MC COUNTRY: Portugal AGENCY: Sonae MC’s Design Team 7-Select Go!Yum F&E Take & Bake Pizza CATEGORY: G9. Packaged Goods RETAILER: 7-Eleven COUNTRY: United States AGENCY: Brandimage CATEGORY: G8. Fresh RETAILER: Fresh & Easy COUNTRY: United States AGENCY: The Creative Pack 44 global retail brands / MARCH 2015 Tesco Meats SELECT BEVERAGES CATEGORY: G9. Packaged Goods RETAILER: Tesco COUNTRY: United Kingdom AGENCY: Pemberton & Whitefoord LLP CATEGORY: G12. Beverages: Non-Alcoholic RETAILER: Safeway COUNTRY: United States AGENCY: Anthem Worldwide Meijer Mix 6 Pack Viñas Altas rioja CATEGORY: G11. Beverages: Alcoholic RETAILER: Meijer COUNTRY: United States AGENCY: Meijer Packaging Design CATEGORY: G11. Beverages: Alcoholic RETAILER: El Corte Inglés COUNTRY: Spain AGENCY: Supperstudio www.globalretailmag.com 45 vertex winners... Pams Pasta & Sauces CANVAS CATEGORY: G8. Fresh RETAILER: Foodstuffs Own Brands COUNTRY: New Zealand AGENCY: Brother Design Ltd CATEGORY: B1. New Brand RETAILER: Canadian Tire COUNTRY: Canada AGENCY: Jackman Reinvents WinCo Foods Master Cuisine CATEGORY: B1. New Brand RETAILER: WinCo Foods COUNTRY: United States AGENCY: Marketing by Design CATEGORY: H16. Home décor RETAILER: Big Lots! COUNTRY:United States AGENCY: Big Lots! In House Design 46 global retail brands / MARCH 2015 Woolworths Essentials Daily Chef Organic CATEGORY: H16. Home décor RETAILER: Woolworths COUNTRY: Australia AGENCY: Marque Brand Consultants CATEGORY: B1. New Brand RETAILER: Sam’s Club COUNTRY: United States AGENCY: Rouge 24, Inc. HeadRush F&E Protein Powder CATEGORY: H17. Electronics RETAILER: The Source COUNTRY: Canada AGENCY: The Source: In-house CATEGORY: P5. Health Care RETAILER: Fresh & Easy COUNTRY: United States AGENCY: The Creative Pack www.globalretailmag.com 47 vertex winners... HemisFares Continente’s Cured Hams CATEGORY: B1. New Brand RETAILER: The Kroger Co. COUNTRY: United States AGENCY: The Kroger Co. CATEGORY: G8. Fresh RETAILER: Sonae MC COUNTRY: Portugal AGENCY: Sonae MC’s Design Team MAXIMUM Giant/Stop & Shop Pasta CATEGORY: H15. Home Improvement RETAILER: Canadian Tire Corp. COUNTRY: Canada AGENCY: Perennial Inc. CATEGORY: G9. Packaged Goods RETAILER: Ahold USA COUNTRY: United States AGENCY: Group360 The Snack Artist 7-Select Holiday Popcorn CATEGORY: B2. Redesigned Brand RETAILER: Safeway COUNTRY: United States AGENCY: Anthem Worldwide CATEGORY: G9. Packaged Goods RETAILER: 7-Eleven COUNTRY: United States AGENCY: Brandimage 48 global retail brands / MARCH 2015 vertex winners... Jumbo Snacks Womo Travel Diaries CATEGORY: G10. Frozen RETAILER: Jumbo COUNTRY: Netherlands AGENCY: OD CATEGORY: P7. Beauty RETAILER: Womo Srl COUNTRY: Italy AGENCY: CBA Italy Cape Covelle Moia CATEGORY: B1. New Brand RETAILER: Topco Associates LLC COUNTRY: United States AGENCY: Topco Associates LLC CATEGORY: P7. Beauty RETAILER: Eurocash COUNTRY: Poland AGENCY: Galileo Global Branding Group P$$T... WomO CATEGORY: B1. New Brand RETAILER: The Kroger Co. COUNTRY: United States AGENCY: The Kroger Co. 50 global retail brands / MARCH 2015 CATEGORY: P7. Beauty RETAILER: Womo Srl COUNTRY: Italy AGENCY: CBA Italy JENNY CRAIG Good Livin’ CATEGORY: G9. Packaged Goods RETAILER: Jenny Craig COUNTRY: United States AGENCY: Brandimage CATEGORY: G9. Packaged Goods RETAILER: Mapco COUNTRY: United States AGENCY: Galileo Global Branding Group La Collezione Sorbets Raley’s frozen pizza CATEGORY: G10. Frozen RETAILER: Metro, Super C, Food Basics COUNTRY: Canada AGENCY: St. Joseph Communications CATEGORY: G10. Frozen RETAILER: Raley’s COUNTRY: United States AGENCY: Galileo Global Branding Group SPAR DINDA CATEGORY: G9. Packaged Goods RETAILER: SPAR Netherlands COUNTRY: Netherlands AGENCY: Yellow Dress Retail CATEGORY: G9. Packaged Goods RETAILER: Cotia COUNTRY: Angola AGENCY: Galileo Global Branding Group www.globalretailmag.com 51 vertex winners... Kero Winn-Dixie OJ CATEGORY: G11. Beverages: Alcoholic RETAILER: Kero COUNTRY: Angola AGENCY: Galileo Global Branding Group CATEGORY: G12. Beverages: Non-Alcoholic RETAILER: Winn-Dixie COUNTRY: United States AGENCY: Galileo Global Branding Group Viñas Altas Lambrusco Pams Feminine Hygiene CATEGORY: G11. Beverages: Alcoholic RETAILER: El Corte Inglés COUNTRY: Spain AGENCY: Supperstudio CATEGORY: P5. Health Care RETAILER: Foodstuffs Own Brands COUNTRY: New Zealand AGENCY: Brother Design Ltd MOOV Our Family Cheese CATEGORY: P7. Beauty RETAILER: Eurocash COUNTRY: Poland AGENCY: Galileo Global Branding Group CATEGORY: G8. Fresh RETAILER: Nash Finch COUNTRY: United States AGENCY: Marketing by Design 52 global retail brands / MARCH 2015 Th e Ju d g e s Maggie Bean Creative Lead, Theory House North Carolina, United States The former principal of Karro Bean Design House, she has 20 years of creative development and strategy experience. She has worked on campaigns for The Fresh Market, Food Lion, and BB&T, and strives to bring fresh creativity to everything she does Adrian Whitefoord Co-founder, Pemberton & Whitefoord, London, England Whitefoord believes the best design requires a combination of emotion and logic. Pemberton and Whitefoord clients include Tesco, Nestlé, Starbucks and Seicomart. Jean-Pierre Lacroix President, Shikatani Lacroix Toronto, Canada Lacroix is a visionary design thinker, author and speaker, and serves as a board member with the Packaging Association of Canada. Over the past 20 years, he has built a reputation as an innovator, passionate about packaging design and branding. Loe Limpens Managing Partner, Yellow Dress Retail Amsterdam, Netherlands Limpens studied Fashion design at the Academy of Applied Arts in Maastricht, Netherlands, and Design Management in Rotterdam, Netherlands. For twenty years he has been working for Private Label manufacturers, design agencies and leading retailers. He has experience in the creative and strategic side of Private Label packaging and is a leading expert in retail design. He is co-author of “Private Label Uncovered”, a 2011 released overview of major Retail Brands developments. Maria Dubuc Director, MBD Vice President, Big Red Rooster Massachusetts, United States A 25 year pioneer in creative management, Dubuc’s key talent is to combine a career’s worth of branding experience into something personal and unique for each and every client. Smart & Final, The Home Depot, WinCo Foods and PriceSmart are among the retailer programs she currently runs. Masanori Eto Creative Director, ADBRAIN, Inc. Tokyo, Japan A board member of the Japan Package Design Association, Eto has over 25 years of package design and advertising experience. His designs have been recognized nationally in Japan and globally. He has also served on jury of the A’Design awards and competition (2014), Japan Package Design Award (2014) and The Dieline Awards(2015). Glenn Pfeifer Executive Creative Director, Galileo Global Branding Group Connecticut, United States Pfeifer is responsible for brand and creative development for packaging and shopper marketing clients. He brings a unique perspective to his work, having worked on marketing creative for a diverse global client list, including Citigroup, Sony, Bacardi and ESPN. Paula Bunny With nearly 25 years of experience, Childs has created award-winning, category-changing design, earning nearly 200 awards for his design, including two gold CLIOs. He believes design doesn’t just create value, but shapes culture and impacts lives. Fred Richards CCO & Partner, Kaleidescope Chicago, United States Richards has over 20 years of creative experience in branding and design, with MLR Chicago, FutureBrand, Interbrand and The Brand Union. He has led creative development initiatives for clients including P&G, Bayer, Wrigley and Unilever. Kevin Shaw Creative Director, Brother Design Auckland, New Zealand Founder, Stranger & Stranger San Francisco, United States Prior to returning to New Zealand to manage the Foodstuffs New Zealand’s Pams brand, Bunny crafted private brand design for global companies including Johnson & Johnson, Gillette, and Kraft Foods. In 1994, Shaw created what would become one of the world’s leading drinks packaging companies. He believes products need to stand out rather than fit in, and that packaging is key to communicating brand stories. Rick Barrack ZHOU Wenjun Chief Creative Officer & Managing Partner, CBX New York, United States Founder, Creative Director & Architect, 524 Studio Beijing, China Barrack has twenty years experience in consumer and retail branding, and is the creative vision behind U by Kotex and the rebranding of Duane Reade’s private label portfolio. Wenjun is a Cube-awarded member of the Art Directors Club, and focuses on product design, art and photography. His work has earned numerous awards including, One Show Design Pencil, Red Dot, Cannes Lions and HKDA Global Design. His work has been published and exhibited globally. Gustavio Piqueira Principal, Casa Rex São Paulo, Brazil Piqueira is the most recognized graphic designer in Brazil, receiving over 200 international design awards and serving as consultant to major global companies as a leading trendsetter. He has designed typefaces, illustrated children’s books and written 13 books on various topics. Angelo Morano Designer/Art Director, Morano Design Toronto, Canada Morano is an award-winning registered graphic designer and principal of Morano Design. With over 15 years of experience, he brings passion and modern design sensibility to his product packaging and brand identity projects. He has managed two of Canada’s most recognized private brands: JOE FRESH and President’s Choice. Don Childs SVP, Executive Creative Director, Brandimage Cincinnati, Ohio United States Ruth Galloway Creative Director, Marque Brand Consultants Sydney, Australia Ruth Galloway is an award-winning designer with over 17 years experience in brand and brand packaging design. Having helped shape and define some of the worlds leading and most iconic companies, in 2007 she co-founded We are Him+Her, a London based creative agency focused on building brands and positioning them for success through strong strategic thinking and beautiful packaging solutions, building an impressive global and local client list including the likes of Unilever and Tesco. After the 2013 acquisition of the company, she relocated to Sydney and joined Marque as Creative Director in 2014 where her extensive experience, intuitive sympathy for the retail shopper, and enthusiasm for the changing retail landscape help guide Marque and Woolworths on a continued path to success. www.globalretailmag.com 53 Retail Analysis / Vendor Allowances – The Culprit behind Tesco’s Financial Turmoil By / DAVID MERREFIELD Not long ago, Tesco, the largest conventional supermarket chain in the U.K. and a major international retailer, startled the industry by declaring that its reported profits for the past two years were wildly overstated and bogus. To what degree were profits puffed? Tesco confessed that reported profits for the past two years had been bloated to the extent of £263 million [about US$430 million at the time], with some £118 million of that occurring in the preceding 18 months or so. It’s difficult to gauge exactly what £263 million means for Tesco, but it’s possible that it could represent up to 80 percent of its operating EBITDA. The profit-overstatement disclosure came on top of an earlier-reported 41 percent profit decline for the first half of last year. Clearly, the edifice was crumbling at an accelerating rate. Tesco didn’t immediately provide explanation of what could have been at the root of the accounting contretemps, but said that an investigation would ensue. However, the nature of the problem was immediately obvious: Vendor allowances were the villain. True enough: Tesco later issued a statement that the problem was “accelerated recognition of commercial income [vendor allowances].” 54 global retail brands / MARCH 2015 T This is serious stuff. The U.K.’s Serious Fraud Office has undertaken a criminal investigation of Tesco’s overblown profitability. Other investigations are likely. Moreover, Board Chairman Sir Richard Broadbent resigned. His successor is to be John Allan, an executive with an extensive portfolio of experience, including retail, logistics and most recently housebuilding. Beyond that, roughly a dozen other topside executives resigned, including the CEO and CFO. Beyond that, in a bid to preserve capital, Tesco is expected to leave its long-time headquarters in Cheshunt and move to a “campus” in Welwyn Garden City, where it already has a presence. This may be accompanied by some 2,000 layoffs. Tesco also intends to reduce its 90,000 storekeeping units in a typical store by 30,000. Numerous stores will be shuttered. All these developments are directly related to vendor allowances, as we’ll see. To that end, let’s take a look at vendor allowances to see how they become fertile ground for cooking the books and see how Retail Brands figure into the situation. We’ll also see why vendor allowances are of far greater importance to the supermarket trade channel than any other, even though they exist to some extent for department stores and for consumer-electronics stores. Vendor allowances exist in a netherworld, and aren’t mentioned in polite company, so it’s necessary to do some conjecturing about how they came about and the forms they take. Many observers think the contagion originated in the U.S. and spread from there. In the U.S., they most likely were a response to wage and price controls imposed by U.S. President Richard Nixon in the 1970s. Manufacturers, hearing that such controls were in the offing, instituted steep price increases. At the same time, though, they told their retail customers not to worry because newly instituted allowances would wash out the effect of price increases. Manufacturers hoped to wean retailers off allowances in due course, leaving the price increases intact. That didn’t happen. Vendor allowances started as rebates or “street money” paid to retailers to offset their cost of promoting products. In time, the allowances mutated to many other forms, more often than not under growing pressure from retailers. Examples include “deals” (short-term price reductions offered to retailers), slotting fees (monies paid retailers to “slot” products in their warehouses or stores), offinvoice deductions (unilateral retail markdowns of vendors’ invoices) returns (markdowns for goods retailers deem to be unsalable) and incentive rebates (monies paid by vendors to retailers to achieve sales goals). All of these practices are rife with opportunities for retailers to wrest undue funds from vendors, or for vendors to curry favor with retailers. They also engender inefficiencies that boost price points for consumers. In the U.S., vendor allowances are often referred to as a “drug,” in the sense that allowances are seen as integral to retail profitability, but that their contribution cannot reasonably be continued indefinitely. Nevertheless, at many supermarket companies, allowances constitute the entirety of profit and without them they they would go out of business. Although all allowances are insidious, perhaps none are so pregnant continued >> www.globalretailmag.com 55 Retail Analysis / with opportunity for misapplication as are incentive rebates. Those rebates are paid to retailers who agree to sell some amount of product in excess of what was sold during a prior period, say the preceding year. Retailers are left to their own devices to produce sales results. Generally, allowances are paid on a quarterly basis as sales goals are achieved. But, suppose a retailer is under profit duress and needs a way to make reported results for a quarter to look better than they are. The temptation grows to recognize upcoming quarterly vendor payments immediately, possibly while pushing some costs to out quarters. Like a gambler on a losing streak, a thin hope remains that one more roll of the dice will make everything come out right in the end. Indeed, Tesco fits the bill of a company under financial duress because of changing consumer dynamics and competitive pressure from deep discounters Aldi and Lidl. Moreover, Tesco is withdrawing from some costly foreign adventures, such as its ill-fated Fresh & Easy stores in the U.S. In the U.S., one company failed outright because of misapplication of incentive rebates, that being grocery wholesaler Fleming Cos. Several years ago, Fleming not only pre-booked vendor proceeds, but demanded from vendor representatives “side letters” stipulating that allowances would be paid even if sales performance fell short; prevailing contracts specified performance. When the vendors’ headquarters discovered and halted the fraud, Fleming collapsed and went out of business almost overnight. Similarly Ahold’s operations in the U.S. nearly came to ruin because of allowance pre-booking. Ahold, based in the The Netherlands, operated a number of supermarket chains in the U.S. at the time, alongside an institutional foodservice company. Misapplication of allowances was particularly widespread at the foodservice operation. The question often arrises about why vendor allowances have persisted for so long if they produce such a 56 global retail brands / MARCH 2015 pernicious effect on the parties involved, and on consumers. The answer is that as is true of most dysfunctional systems, the players see good reasons to turn a blind eye to the downside. Retailers perceive that if they are better than their competitors at wringing money from vendors, they achieve a competitive advantage. It has been proposed that if supermarkets were required to disclose what proportion of profitability comes from allowances, the practice would fade. In reality that would exacerbate the problem by showing the laggers that there’s more money to be milked from manufacturers. Manufacturers tolerate allowances because, inter alia, they are able to use deals to power “trade loading,” that is, to quickly move product from their own depots to retailers’, which makes their short -term sales figures look better than they really are. Bonuses hang on such slender threads. Notwithstanding the durability of vendor allowances, there’s some small reason to hope that Tesco’s post-scandal actions will lead supermarkets out of the wilderness. One indicator is that Tesco is now awake to the fact that vendor allowances and price pressures poison trade relations between a retailer and its vendors. In a bid to ameliorate that, Tesco intends to establish an internetbased Tesco Supplier Network, the main function of which will be to allow its 5,000 vendors to air grievances if they think that have been ill treated by Tesco. The way we can measure future progress in the movement against allowances is to take a look at two factors: The net number of SKUs a supermarket offers and the amount of private label product sold as compared to national brands. SKU reductions, now being undertaken by Tesco, signal that a supermarket is weeding out products that were there only because they yielded an allowance, not because there was much consumer demand. Private label does something similar. In broad generalization, the greater the percentage of private label offered in a supermarket, the greater is the likelihood that the supermarket is in the business of selling product instead of buying product. That’s because private label offers few, if any, allowance opportunities. Some stores, such as Marks & Spencer, Aldi and Lidl depend almost entirely on private label. Tesco offers more than 40 percent of all product under various private brands. Tesco lags some of its U.K. competitors in the own brand race, but is running well ahead of its counterparts in the U.S. In the U.S., Kroger is the largest and most successful supermarket chain. Its private label penetration is about 28 percent, well ahead of its U.S. peers. In the future, we may see an uptick in private label penetration at both Tesco and Kroger. Another reason to hope that vendor allowances are on their way to the rubbish heap is that SKU attenuation, such as that by Tesco, allows a supermarket to align itself with changing consumer demands. Increasingly fewer consumers enjoy a trip to the city’s edge to stock up on consumables. Instead, shopping trips tend to be taken locally with a particular meal occasion or pantry shortage in mind. As urban dwelling gains more favor in the future, which seems likely, that phenomenon will only increase. SKU reduction will position Tesco to reduce the size and number of supermarkets and to align them better with what consumers want. Price points can be reduced. Customers will return. If all that transpires, the biggest remaining issue will center on what to do with all that real estate.?? GRB Vasco Brinca, Senior Vice President, EMEALA, Daymon Worldwide / The Challenge of Choice in Today’s Global Retail Landscape Retailers around the globe today have more power in the value chain than ever before as many have become actual agents for change in the lives of their consumers. From a greater focus on health and wellness to introducing opportunities to access ethnic-inspired flavors and products, retailers often hold the key to a new world of better life experiences. 6 ™ hee l G l ob a program. Of course, not all categories muscle into offering ‘nowhere else’ offer equal opportunities. Areas with experiences and robust Private Brand high Private Brand shares and low product lines. Start by analyzing brand loyalty are the obvious places global retail trends, particularly those to start, and offer a gateway to trial that apply to most consumers versus for other categories and experiences just a specific demographic, as a means upon which consumers will base future to build effective strategies. decisions. Daymon Worldwide regularly On the other end of monitors global retail trends the spectrum, and what to help our retailer and is most exciting for supplier partners Shifting Demographics Private Brands, are better track and those areas where respond to future r e nd W Money B-Well lT Matters there’s a clear consumer needs opportunity for and preferences. differentiation To see our and innovation. 2015 Global 01 JOYment Always On 5 – 2 01 Some of the Retail Trends fastest growing Predictions, which include fresh meals, were identified YOUniverse One World convenient produce, through the lens of health and wellness our proprietary Global programs, bakery and deli. Trendwheel TM, visit http:// Shoppers are looking for that www.daymon.com/newsroom/ hook. If retailers use their Private daymon-worldwide-releases-2015Brands to trump competitor offerings, and-beyond-global-retail-trendsthey will win the business and predictions/. ultimately become the best choice for In addition to tracking relevant their customers. consumer trends, it’s also crucial For more information or to speak to review the category-specific with Vasco Brinca, please contact him opportunities that exist for Private via email: vbrinca@daymon.com. GRB Brands at a particular store level before moving forward with a new 2 Consumers on every continent have more choices about where and how they shop than ever before, creating an increasingly competitive retail landscape that blurs the lines between online and physical shopping environments. The notion of a primary store has all but disappeared as consumers shop multiple formats for everyday needs. Digital growth has also fragmented the supply chain, as shoppers now have more choices for online ordering plus multiple points of fulfillment such as in-home delivery and click and collect models. The actual role of the primary shopper has also changed as the responsibility is increasingly shared by several members of the household. All of these complex scenarios make building brands and securing shopper loyalty difficult goals for retailers to achieve, but it can be done. In fact, this environment offers particular opportunities for retailers to leverage their Private Brands as a means to differentiate from competitors and inspire core consumers with targeted innovation that speaks to their particular needs. To do this well, global retailers must invest the time and marketing www.globalretailmag.com 57 Jesse Moen, Director, Continuous Improvement Practice, SGK / Building a Superior Artwork Process to Strengthen your Brand It’s extremely rare to meet a packaged-goods brand marketer who doesn’t admit, “I have too many rounds of revisions and it takes too long to get my packaging approved.” This is very harmful to brand performance: it reduces speed-to- market and sales and increases expenses across the board. And with new EU and impending U.S. regulations on labeling accuracy, this kind of inefficiency will be even more costly because it leads to mistakes. Some companies accept packaging headaches. But some dig in and solve them. They start by looking at root causes. There are two, and they are as cultural as they are technical. The first one goes like this >> “I have a new package coming (maybe a full redesign or just an ingredient change). And we have a deadline. I don’t have all of the data I need (something as critical as a nutrition statement or something discretionary, such as romance copy), but there’s so much pressure that we might as well just get started. Just go!” It’s a fallacy that this pays off in the long run. It works every once in a while, but when a major brand is executing, say, 5,000 packaging changes a year, it’s not sustainable. Pretty soon you’re driving more rounds of revisions, and people are desperately seeking information that should have been there when production began. This costs money, and it’s how costly mistakes happen on shelf. 58 global retail brands / march 2015 There’s a practical solution to this, but the change has to be cultural too. The company has to say; “We’re not going to do this anymore. We’re going to figure out what data we need at each stage-gate, and we’re not going to move forward until we get that data.” This is crucial. But it’s hard. The second cultural issue >> The second cultural issue is package data and how it’s handled; whether a brand manages its packaging in-house or uses vendors. The most efficient brands understand that package data is diverse and it’s coming from everywhere: nutrition facts, ingredients, net weight, barcode, logos and other art elements, romance copy, etc., can come from marketing, design, legal, packaging R&D, product R&D and more. Efficient brands standardize the way this data is gathered and stored. Whether they use carefully curated and protected spreadsheets or a more sophisticated digital database, every stakeholder contributes to a standardized, secure data platform. As logical as this sounds, there are manufacturers and brands that have a different system for every division. It’s confusing and inefficient, and it makes automation impossible for packaging as well as for related items such as coupons, circular artwork and direct mail. And it contributes directly to our first root cause – of saying, “Just go!” before all the inputs are gathered, organized and approved. Along with a logical, curated database, efficient brands establish that once the data is stored, it’s “gone” – it’s official and not to be changed. But the data as a whole can’t “just go” until they are all there. Once a company has addressed these two root causes, then it can standardize according to Six Sigma principles. It can optimize according to lean manufacturing principles. And it can automate by tying the optimized database directly to package design functions. Current and impending packaging regulations make these improvements crucial. There’s less chance of error at each discrete stage, but there’s a holistic benefit too. If a major brand makes packaging changes to half its SKUs a year, that could total 5,000. EU and pending U.S. packaging regulations will involve every SKU – so let’s say 10,000 for a large brand. If the typical approval process involves 10 people, several rounds of changes and 10 minutes per approval, you’re talking thousands and thousands of hours spent (in a relatively short time) on something that’s not adding to your bottom line. But what if the proposed U.S. regulations are significantly watered down in the coming year? Brands are free to hope for this, but their issues will remain. Yes, implementing data collection and management best practices is hard work. It might require new technology. And it will require cultural change, which is the hardest. But it’s hard work that pays off permanently. On the other hand, when 10 stakeholders are involved in a package process that starts too early, has too many revisions and still results in an error, that’s hard work with no payoff. GRB Jesse Moen brings 10+ years of expertise in brand development/deployment and in the practice of continuous improvement. He is the driving force behind the success of the SGK Continuous Improvement Practice (CIP) and has strategically led initiatives with CPGs and retailers such as Campbell’s, Dial, Diamond Foods, General Mills, Logitech, Merck, Proctor & Gamble, 3M, Safeway, and Titleist. Jesse earned a MA from the University of California, Berkeley and holds a Lean/Six Sigma Black Belt from the University of St. Thomas. www.sgkinc.com; Jesse.Moen@sgkinc.com www.globalretailmag.com 59 Koen de Jong, Managing Partner, International Private Label Consult (IPLC) / Managing Private Labels Early January, I went to the UK to visit the stores of a few major retailers to gather some last bits of material for my next book: Managing Private Labels. After an exhausting day in the stores I posted one of my most striking observations of that day on the LinkedIn discussion group, Private Label News. The question I posted was: ‘Is Tesco offering too much choice to its shoppers?’ A comparison between Aldi and Tesco during my visits revealed an astonishing difference in shopper choice between the two retailers. In most cases Aldi as a limited assortment discounter, only offers one own label equivalent alternative to the market leading brand in the category. Tesco however, offers a plethora of alternatives under the Tesco brand. A few examples: next to Nutella’s hazelnut spread Tesco offers 13 chocolate-based own label spreads. It has up to 11 own label alternatives to Fairy washing up liquid and 6 own label alternatives to Sun-Pat peanut butter. ‘Is this getting too much, or is offering a wide assortment next to a different experience the battleground where Tesco (and other mainstream retailers) should continue to make the difference?’ I wondered on LinkedIn. The question was answered by the new Tesco CEO Dave Lewis himself as he announced only 2 days after my post to axe 20,000 SKUs, more than 20% of the 90,000 SKUs Tesco stocks. 60 global retail brands / MARCH 2015 Low cost retailers such as Aldi and Lidl have eaten away significant market share of the big-4 (Tesco, Asda, Sainsbury’s and Morrisons) in the UK. Simplicity is the key-word for these retailers and this is also reflected in their assortment. It is not without reason they are called limitedassortment discounters. There is a phenomenon called ‘shopper stress’ which indicates the confusion for consumers that results from too much choice offered during their shopping trip. This will not happen that easy in Aldi or Lidl. According to The Guardian, Tesco stocks 224 SKU’s air freshener (Aldi 12, all own brand), 98 SKUs rice (Aldi 6 options, all own label), 283 SKUs coffee (Aldi 20, of which 15 own brand), to name a few. Hard discounters are in the business of selling at low cost and maximizing rotation. From my profession as a private label consultant I am a great admirer of Tesco. Over the past few decades phenomenal initiatives to drive private label innovation were taken by this retailer. Whether being the good-better-best architecture, organic, fairtrade, freefrom or venture brands, it all sprouted from their head-office in Cheshunt. I can only hope they will quickly get back on their feet and will continue to surprise their shoppers and competitors with what they have been so good at in the past. GRB Koen De Jong is founding director of International Private Label Consult, a boutique consulting firm specialized in strategic consult and project management support to manufacturers and retailers. With offices in France, The Netherlands, Germany and Spain IPLC helps its clients with a pragmatic and action oriented approach. kdejong@iplc-europe.com Photos copyright IPLC Perry Seelert, Co-Founder and Strategic Partner, Emerge / The Lineage of a Brand Does the Story of Who Owns and Creates the Brand Really Matter? There are two wildly popular television shows that are global, Shark Tank and Dragon’s Den, which are must-see viewing in our household. Both of them are cut out of the same cloth, setting up great confrontations between the entrepreneurs who pitch their product/company ideas and the “sharks” who evaluate them for equity stakes. I can’t get enough of it. One thing that sharks are always looking to tease out of the entrepreneurs is why they started the business, where did they see the consumer need, and did the company’s origin come from a place of true passion? They are interested in the heart and soul behind the idea just as much as the economics. More than ever today, the lineage of a company and a brand matters to consumers. It matters in retail branding too, and there are new lessons to be learned about how you should connect your own brand vividly to your store. There are three underlying drivers to why brand ownership, story and lineage are important facets to your success: Authenticity & The Millennial Generation – You have read of the increasing consumer importance of Millennials and how they value customization, are digitally native and early adopters, but one of the ethics they value the most is the authenticity of companies and brands. They want to understand roots and the purpose/ mission within a brand. Are the roots and mission real? Interestingly, the big food conglomerates have gobbled up many of these mission-oriented companies. Campbell’s purchased Plum Organics and Bolthouse Farms recently, and General Mills bought Cascadian Farms and Annie’s Naturals. They have done it to become more credible in the natural and organic segments, yes, but they also chose not to develop these products under their existing brands. They also decidedly do not advertise that the brands have new owners. In fact, companies like Anheuser Busch/InBev choose to hide these purchases, like they did when they bought craft brewing sensation Goose Island. Nowhere in the marketing, advertising or packaging is there even a hint of the association to InBev, and you may ask, “do consumers even care”? Well, yes, increasingly they do. Sales show Goose Island is doing well (increasing distribution), but there is a core consumer who has been disaffected and moved away. Transparency & Honesty – One of the most successful brand turnarounds in North America has been with the pizza chain, Domino’s, and you want to know why? It is because they were incredibly honest about their new mission, and many Millennials (and more) gave them tremendous credit for their truth-telling. They came out and said their pizza and sauce had lost their way, that they were bland and boring and not very flavorful. They basically said they sucked. And this honesty resonated, and has had a huge effect in Domino’s reacquiring share from Pizza Hut. Safety – The third driving reason for exposing your brand’s lineage is that beyond authenticity and transparency, consumers want to know where a brand comes from for safety purposes. They want to know what a toy’s plastic composition is, what country it came from and in the food chain they increasingly want total ingredient visibility and origin. Clearly, having your retailer’s name on the package adds to the brand’s lineage, and when the story is told right, can add meaningful texture. Danny Wegman not only puts the family name on the product line, but Wegmans Dog Food, called “Bruiser”, is even named after their beloved family dog. It has meaning. What happens when you don’t utilize your retailer name on your brand? That can be perfectly fine in many cases, as long as the brand’s exclusivity to the store is clearly called out. Take for instance Price Chopper’s new line of meats, Chiappetti, which positions itself as humanely raised by family farmers. Throughout the meat case, within advertising and across social media, the brand is distinctly marked as a “Price Chopper Exclusive”. However, if your own brand does not have the retailer’s name, is not endorsed by the retailer’s overarching brand, or is not denoted as continued >> www.globalretailmag.com 61 a brand “exclusive” to the store, then I think you are working against the preferences of Millennials, and working against an overall consumer who is seeing their product and brand choices with a new transparency. Tell the story of where the brand comes from and why you created it, and you will be well positioned for the enlightened shopper. GRB Perry Seelert is retail branding and marketing expert, with a passion for challenging conventional strategy and truths. He is the Strategic Partner and Co-founder of Emerge, a strategic marketing consultancy dedicated to helping Retailers, Manufacturers and Services grow exponentially and differentiate with purpose. Please contact Perry at perry@emergefromthepack.com Irene tortorella Junk Mail vs. Junk Food Tired of take away? Had enough of wasting money eating out? Want to impress that special someone with a home-cooked dinner, but short on inspiration about the menu? You need to go back to the good old times when you were cooking at home. Don’t tell me you don’t have time for that, because even in our busy lives it takes longer to order a pizza than leave 100 grams of pasta to boil for 10 minutes. And it’s not just Italians who know how to make pasta sauces: Gefen Mushroom pasta sauce is an excellent and quick choice for all the family’s liking, a lesser known brand, but one worth picking up when you see it. So, let’s start from the grocery shopping. I know you don’t like going to the supermarket, you feel lost and don’t get excited at all in front of those stacks full of same-thing-different- 62 global retail brands / MARCH 2015 name products. Your palms start to sweat when you have to make a decision about what to have for dinner. You definitely don’t like queing at the cashier. You lazy you! What about shopping online? The Internet is a big place but it’s also the best place to find discounts. You can even compare prices and split your weekly shopping, or just use each supermarket website as reference for your grocery list. I also believe you don’t love receiving weekly updates from retailers into your personal e-mail, or do you? But there you go, if you sign up to Sainsbury’s or Morrisons newsletters and wait a couple of hours, then check what’s on at your local store, you might not be too disappointed. You might have learned that for your Valentine’s Day romantic dinner at home, you could have had a bottle of Louis Delaunay Champagne Brut that for £12.99 (was £25.99) at Tesco. Would have made you look like a real romantic sort. So, don’t leave these precious mails to go to the junk mail folder, they can be the first source for your food shopping rehab. And what about the good old-fashioned supermarket leaflet? I love to use them as reading material, on my sofa, after a long working day. You can see the best deals of the week, still compare prices and collect some coupons. Forget take-away leafleats, you’re better off at ASDA. GRB Richard Kohn / Let’s try: The big surprise will be that what seems an insurmountable challenge for them, is simple for us. Winning in private label is driven by a few factors: Speed of response, flexibility, pricing and increasingly, based on my most recent experiences, solving simple problems for our clients. Or perhaps they are just simple for us, because of our depth of knowledge and ability to perform. Let me explain more. We know there are a number of operational models retailers use for private label. These range from extensive in house teams to totally outsourced supply. For those with less extensive a team, there’s a real opportunity (less so with bigger teams, but I believe it is still there). Middle management ranks in retailers having been culled in recent years. The result is a knowledge gap in those retailers that smart private labelers can exploit. Managers working in major retailers today are very impressive characters. In most cases they have passed through the fast track management training courses as top performers. They are bright, intelligent and commercially very savvy. They also are responsible for multi million Euro/ Dollar budgets. These are extremely busy people, used to success and used to wielding great power. Then comes along a problem to which they don’t, despite their great wealth of experience, training and budgets, know the answer. In today’s retail management environment, where can they turn? Colleagues – perhaps: but then they don’t want to show any weakness. Senior management – unlikely: there’s not a lot of them left and those that are there, so busy it’s unlikely that they will have time. Consultants – never: they cost money. Develop a good and trusting relationship with your category manager, one where they feel they can share with you the product challenges they face, where you solve a few simple problems for them and then you become an invaluable source of support. Believe me, I know this because I have sat on both sides of the table. It just seems that even more now, as retailers try to move from recessions to growth, the need for a wise, experienced counsellor at the shoulder of the buyer, offering easy solutions is more valuable than ever before. The big surprise will be that what seems an insurmountable challenge for them, is simple for us. Most category managers simply have no time to manage their long list of branded contacts and then an extensive network of suppliers across the every expanding range of categories that they have to cover. In a nutshell: Find a busy category manager, with too much on their plate, handling multiple big brands and big categories. Set a meeting and then listen, just listen. You’ll be surprised at how easy it is to win new business! GRB Richard is an expert in global marketing and an acknowledged strategic brand leader. He currently heads the private label division at one of the largest retail pharmacy groups in Europe. He’s held senior management positions in A brand CPG companies and led international marketing and strategy teams across CPG, consumer durable and business services companies. He’s also the European client partner for a leading brand excellence training institute which delivers brand and communications courses to Fortune 500 companies. Richard is dedicated to bringing the discipline and science of brand marketing and marketing communications to private labels, empowering them to cultivate critically essential marketing management competencies to lead them to build leadership brands. richardkohn@gmail.com www.globalretailmag.com 63 Jean-Pierre Lacroix, President, Shikatani Lacroix / Driving At-Purchase Impulse Purchases Retailers and marketers face a new set of opportunities thinly veiled as challenges. Looking at the glass half empty perspective – the challenges – today’s grocery shopper faces a complex (and confusing) retail environment with more than 60,000 supermarket products, and these numbers continue to grow along with the range of retail channels available. To amplify the issue, the number of weekly shopping trips in the U.S. dropped from a high of 2.2 in 2012 to 1.6 per week in 2014, and consumers are also more willing to accept living with less. However, from a glass half full perspective – the opportunities – the average time spent grocery shopping rose to 41 minutes. With this extra time spent in the store, retailers have new opportunities to drive private label impulse purchases – the acts of buying without pre-shopping objectives or consideration – since so many decisions are being made at the shelflevel. Marketers and retailers need to consider four design factors when developing their packaging program. Factor One: Strong Visibility >> It’s pretty obvious that to drive impulse sales, the product needs to be noticed during the split second it takes a consumer to buy a product. In packaging design, we defined the key criteria driving shelf visibility – the BlinkFactor™, where 40% of all communication consumers absorb is visual, and 80% of this visual connection lays in colors and shapes. Are your brands’ colors and shapes setting you apart from competitors and, more importantly, drive an effective emotional connection with consumers? When considering increasing your brand’s visibility, you should also consider the entire product category in which the product competes for customer attention. When we redesigned the Shoppers Drug Mart Life Brand, we took the time at the client’s mock store to review each packaging concept within the shelf setting to ensure the designs truly stood out. 64 global retail brands / MARCH 2015 Factor Two: Leverage Shop-Ability >> How marketers leverage the natural way consumers shop will ensure their product effectively helps solve customer’s buying decision. Sometimes it can consist of a color (green=organic, light blue=healthier alternative, etc.) or the hierarchy of communication where the sub-brand plays a critical role. Since people shop with their eyes, the ability to leverage large images that either reinforce the end benefit or help understand the final usage help quickly fill the information gaps when consumers are making their final purchase. Factor Three: Align to Shopping Behavior >> Marketers and designers understand that there is a huge range of types of shopper behaviors: stockups, fill-ins, special purpose visits, and quick trips, and each one influences which product categories will be able to leverage impulse behaviors. For example, in many shopper categories these can consist of seasonal packaging, sweepstakes-type flashed packaging or unique collectables. If consumers are doing stock-ups, offering bonus packaging, time-limited offers highlighted on the packaging, or multiple purchase offers help drive purchase behavior. This type of incentive provides added value in the form of convenience, and it drives the consumer away from potentially buying a competing brand. Package design for fill-ins and special purchases should reflect strong shelf impact, stronger end-benefit messaging, or reinforce a lifestyle benefit that talks to the emotional state of the consumer. Factor Four: Emotional Connection >> Ultimately, impulse sales need to create effective emotional connection with consumers in the split second it takes to make a buying decision. Most impulse purchases are traced to a consumers lifestyle needs and self-expression plays a critical role. In essence, brands reflect customer’s selfimage and effectively tapping into this behavior will drive impulse purchases. Packaging that makes this connection has higher odds to be considered during the unplanned at-purchase moment. The package design imagery, colors and messaging should all play a role in ensuring the resulting image takeaway aligns consumers’ self image. Conclusion >> Impulse purchases represent a critical opportunity in ensuring brands win at retail by increasing their selection odds with the customers. Impulse can only occur with a package design that is highly visible, reflects the shop-ability of the category, reflects consumers shopping behavior and makes a strong emotional connection in the fraction of the time it takes to make a buying decision. GRB NOTEable / << MarcabyBolognaFiere from page 21 posting the best results were food groceries (+2.5% in value and 0.4% in volume), fresh produce (+0.6% in value), and pet-care (+2.0% in value). There was a full house too for the inaugural meeting organized by ADM entitled “Private Labels and Value Creation in the Agro-food Supply Chain: two sides of the same coin” where one of the topics was best practices to ensure agro-food products achieve their full potential within the large scale retail system. The tradeshow closed with a message of confidence and encouragement for Italian producers. “One in five products sold in modern retail chains is a private label”, commented Francesco Pugliese, Chairman of ADM, the organization grouping major retailers. A key feature of MarcabyBolognaFiere is that 95% of exhibitor companies are SMEs. This is one of the venues that can really help kick-start the nation’s economy. Not only do private label products mean extra value for consumers - being equal in quality to the major brands yet with a 30% lower sales tag - they are also mostly produced by SMEs. So purchasers can be sure products are very likely to be made in Italy from local agricultural produce. Private labels are a guarantee of quality and food safety – at lower prices”. The next MarcabyBolognaFiere will be held on 13 – 14 January 2016. GRB www.globalretailmag.com 65 trade fairs / PLMA’s International Salute to Excellence Awards winners to be announced at 2015 “World of Private Label” PLMA’s 2015 “World of Private Label” 19-20 May, Reflects Success of Private Label across Europe All signs point to PLMA’s 2015 “World of Private Label” Trade Show, to be held 19-20 May in Amsterdam, being the biggest ever, as retailers and manufacturers work together to meet the growing demand for retailer brands. A new consumer poll by Nielsen finds that perceptions about private label are overwhelmingly favorable in Europe and around the globe. Two of every three shoppers say that retailer brands offer good value for money and 71% believe that private label quality has improved over time. The growing popularity among consumers across Europe is reflected in the market share statistics compiled by Nielsen for PLMA’s International Private Label Yearbook. Retailer brands now account for at least 30% of all products sold in 15 countries, the greatest number ever. Three countries—Sweden, Finland and Czech Republic—have A highlight of this year’s “World of Private Label” Trade Show will be the announcement of the winners of PLMA’s International Salute to Excellence Awards. The Awards give recognition to outstanding food and non-food private label products that have been introduced by supermarkets, hypermarkets, discounters, drugstores, and specialty stores in the past year. National and international retailers have submitted their best and most innovative private label products, covering many food and non food categories, for consideration by an international panel of industry experts, including chefs, former retailers, academics, nutritionists, journalists and packaging specialists. The panel carefully examines all the products and then grades them on several criteria, including performance, taste, concept, packaging, design and value for money. The judging takes place in Amsterdam in April and the award-winning products will be displayed in PLMA’s Idea Supermarket®, where visitors can also see products from retailers across Europe, North and South America and Asia. GRB crossed the 30% market share line for the first time. The number of countries achieving 30% share has been rising steadily. Back in 2011, only 10 countries made it. In 2012, the number climbed to 12. Private label growth has been especially strong in Spain, where it now accounts for more than half of all products sold, In five countries—United Kingdom (45%), Portugal (45%), Germany (44%), Belgium (41%) and Austria (40%)—private label represents at least four of every ten products sold. “The Nielsen data makes it clear that shoppers across Europe are putting more private label products in their baskets,” said Brian Sharoff, PLMA President. “Retailers are responding to consumer needs by expanding their private label programs and introducing more innovative products.” Last year, PLMA’s “World of Private Label” Trade Show attracted more than 11,000 buyers and visitors from 115 countries. There were nearly 4,000 exhibit stands on the trade show floor, featuring more than 2,250 exhibitors from 70 countries, including 53 national and regional pavilions. Products on display on the Trade Show floor include fresh, frozen and refrigerated foods, dry grocery, and beverages as well as nonfood categories, including cosmetics, health and beauty, household and kitchen, auto aftercare, garden, and housewares and DIY. The show floor was divided into separate food and non-food halls to help visitors make the most of their time. PLMA offers a special pre-show seminar program prior to the show. Admission to the seminars is complimentary to all registered visitors and exhibitors. The seminars will be presented in the Forumzaal at the RAI Exhibition Center on Monday, 18 May 2015 from 14.00– 16.00. Presentations are translated into English, French, German, Italian and Spanish. GRB 66 global retail brands / MARCH 2015 Poland’s Professional Event on Private Labels Targi Kielce – Central and Eastern Europe’s second largest Expo Center will produce the second edition of Exhibition And Conference for Private Label Producers PLME - 29th and 30th June 2015. MDD Expo 2015 31st of March and 1st of April On the 31st of March and 1st of April, 2015, private label brands will be showcased at the European exhibition for trade professionals held at Paris Expo, Porte de Versailles (Hall 3). From micro- and medium-sized businesses to multinationals, the 550 exhibitors present at MDD Expo will share their capabilities and innovation. Since innovation is an essential factor in the development of private label brands, it is the star of all the exhibition’s events, making MDD Expo a unique showcase of the latest global trends in private label brands. International Sourcing >> 30% of the exhibitors are foreign manufacturers and visitors will be able to discover pavilions from: the Netherlands, the United Kingdom, Turkey, Tunisia, Belgium, Italy, Algeria, Germany and others. Europe’s retail market sees an increased number of private labels sold in retail chains. The organizers report that private label products account for about 19% of Poland’s retail sales, and 28% for food products. Retailers; from delicatessen, through hyper-and supermarkets, to luxury and highly specialized shops have own brand, often discounted programs on offer. PLME is one of the few events of this kind in Europe; an international business platform solely dedicated to the private label industry – a meeting place for the Continent’s producers, wholesalers and major and most important retail chains. Last year’s list of exhibitors of over 100 companies from Germany, Austria, Italy, Ukraine, Lithuania, Belgium, Serbia, Hungary and Poland. 2 dedicated villages to help buyers source their products >> For the second time and in partnership with the Club PAI (French association of Intermediary food product manufacturers), the Village Ingrédients will highlight the importance of quality ingredients and intermediary food products in the development of new trends in private label brands. The exhibition is accompanied by the conference which brings together representatives of Poland’s major companies and institutions in the private label sector. MDD Expo Pépites (Little Gems)—micro- to medium-sized companies new to the private label market—will also be a unique wealth of exclusive talent for all retailers seeking differentiation and/or new flavors. An ideal sourcing partner for unearthing original know-how. For more information on exhibiting or attending, please contact Robert Frąk, Project Manager: frak.r@targikielce.pl, or visit: www.markiwlasne.pl. GRB For the second year running, the Pack Store will provide relevant answers on practicality, sustainability, space saving ... The innovative packaging of private label brands is a major challenge for both product manufacturers and retailers, and will once again be highlighted at this space. GRB www.globalretailmag.com 67 trade fairs / 3d Wabel Frozen Summit Doubles in Size and Confirms Success! March 11-12, 2015 Hilton Hotel, Paris Charles De Gaulle Increasing numbers of frozen food suppliers and giant retail buyers are turning to the 2015 Wabel Frozen Summit, making it a must event on the 2015 Frozen Food calendar. Saving time and costs in the sourcing and selling process, Wabel gathers together 100 suppliers and more than 80 buyers to talk business over two days in private meetings, preorganized in the run up to the event. Leading European retailers, such as Tesco, Intermarché, Asda, Carrefour, Leclerc, Auchan, Cora, Casino, Morissons are participating in the event, along with AMS, BLOC, EMD, AGENOR, the largest buying alliances in Europe. WABEL provides participants with conferences (IRI - sales performance and MINTEL - latest products innovations, IFS – certification benefits), store checks, retailer insights and networking lunches. WABEL will also showcase innovations in frozen private label at the Wabel Award Ceremony. Frozen, Desserts, Fruits & Vegetables, Fish & Seafood, Ice Cream, Meat, Pizza, Ready Meals Upcoming 2015 Summits >> Household & Personal Care Summit Paris October 14 & 15 2015 Hilton, Charles De Gaulle (Airport) Grocery Summit >> Paris November 25 & 26 2015 Hilton, Charles De Gaulle (Airport) www.wabel.com. GRB 68 global retail brands / MARCH 2015 SIAL CANADA Returns to Toronto The largest food tradeshow in Canada is coming to Toronto’s Direct Energy Center SIAL Canada, the International Food and Beverage tradeshow, returns to Toronto for the third time from April 28 to 30, 2015. The Toronto edition promises to be a source of inspiration and innovation for the entire agri-food industry. As the largest food tradeshow in Canada, SIAL Canada offers visitors an unequalled selection of International, Canadian and Quebec products. In addition, as the largest tradeshow in the Great Lakes region, SIAL Canada has significant influence across the American Northeast. In 2014, SIAL Canada experienced recordbreaking numbers in Montreal. For three days, Montreal became the capital of the agri-food and food-service industries. With 786 exhibitors from 44 countries and nearly 15,000 professional visitors from 61 countries, there’s no doubt that the 2014 edition of SIAL Canada was a resounding success. Now back in Toronto for 2015, SIAL Canada is proud to position itself as the only tradeshow in Canada that reflects the very latest consumer trends. In fact, 3 out of 4 visitors to the 2014 show attended in order to see the industry’s newest trends and products. This year, visitors from at least 60 countries are expected to come meet and do business with nearly 800 exhibitors in the over 230,000 sq. ft. of exhibition space. Indonesia: 2015 Country of Honour >> As Italy was in 2011 and Morocco in 2013, Indonesia will be SIAL Canada’s Country of Honour for 2015. With 249 million inhabitants, Indonesia is the ASEAN’s most important agricultural country and its leading economy, accounting for 38% of GDP. A strategic sector that is expanding rapidly, supported by ever-increasing local demand, the food market (+57% between 2011 and 2015) is a vital factor, not only for the country itself, but also for the entire ASEAN zone. SIAL Innovation: the only international contest with a presence in the four corners of the world. Made up of food-industry experts, and held in partnership with XTC World Innovation, the jury awards 10 finalists and one Grand Prize. The Grand Prize winner, as well as all of the finalists, will have the unique opportunity of traveling the world to all of the SIAL shows, which include: Canada (Montreal/Toronto), China, Brazil, the Philippines (SIAL ASEAN), Paris, Jakarta (SIAL InterFOOD) and Abu Dhabi. This year, for the first time, a “people’s choice” award will also be granted. An International Brand >> By 2050 in Canada, 50% of the population will be of foreign origin, and, by 2031, 56% of Toronto’s population will be of Asian origin. In keeping with these changing demographics and consumers’ growing demand for ethnic and specialty products, SIAL Canada will offer a world of products to discover. GRB Bologna Welcomes Cosmoprof Cosmoprof Worldwide 2015, the quintessential international beauty event and center for trends and information about the global cosmetics world, will take place from 20th-23rd March. The 2015 edition will host 27 national collectives (Korea, China, Taiwan, Poland, Germany, Colombia, France, the Far East, Greece, Belgium, Spain, Pakistan, Turkey, the UK, Israel, Peru, the US, and for the first time, the United Arab Emirates, Thailand and the Netherlands. The International Buyer Program, a tool that has been consolidated over the years, will involve 25 regions of the Contract Manufacturing Moves Forward at Cosmoprof North America Cosmoprof North America (CPNA), the premier B2B international beauty show, promises to deliver even more attractions at its event in Las Vegas on July 12-14, 2015. world at the upcoming edition. It will also have an add-on, the International Buyer Program Cosmopack; targeting buyers specialized in machinery and innovation for the cosmetics industry, contract manufacturing, packaging and raw materials. Cosmopack >> Cosmopack, “the show within the show” of Cosmoprof, will take place from 19th to 22nd March. The landmark international event dedicated to the beauty sector’s supply chain will open a day ahead of Cosmoprof, giving its exhibiting companies coming from 33 international countries an opportunity to make contact with exhibitors at Cosmoprof Worldwide Bologna, the major potential buyers for companies in the production chain. Companies from 33 countries worldwide will be taking part in the event. In 2015 these will all be linked by the theme of eco-sustainability, a vital aspect of industrial production that will be the subject of workshops and special initiatives. Major manufacturers of machinery and technology for cosmetics firms, companies producing primary and secondary packaging and raw materials businesses will all be taking part too. The world of raw materials will be the main theme of “Spotlight on Ingredients”, the project aimed at promoting high-quality and highly innovative raw materials. The Cosmopack Factory project will be returning for the 2015 edition. This is a special exhibition area where the manufacturing process for the most famous and widely distributed beauty products is reproduced live and the secrets of mascara will be revealed. www.cosmoprof.com. GRB In addition to providing multiple opportunities to network and learn about/discover the latest beauty innovations, CPNA has also redesigned its layout to improve traffic flow and provide attendees with one-stop-shop pavilions to meet their needs. The newly designed floor plan showcases the change from four to three pavilions that include: Packaging, Contract Manufacturing & Private Label; Retail [Cosmetics & Personal Care] and Professional Beauty [Hair, Nail, Tools, Wellness & Spa]. Those looking for contract manufacturing solutions won’t need to search too hard as this section has also been moved to the front of the show floor, acting as the first point of reference for attendees as they walk into the main hall. Looking for packaging solutions? Companies exhibiting include: HCT Packaging, Baralan USA/ Arrowpak, Lady Burd Private Label, Bottlemate Inc. and HCP Packaging to name a few. Also, don’t forget to check out the Popup Installation display of The Dieline Award winners from 2015. The Dieline is the industry’s source for daily package design inspiration, resources, news, conferences, events, and awards. www.cosmoprofnorthamerica.com. GRB www.globalretailmag.com 69 advertisers index / Next Issue Details Special thanks to these advertisers whose support has made this issue possible. advertising inquiries Europe Mr. Jacco van Laar Global Retail Brands magazine Herman de Manstraat 29 3842 AT Harderwijk, The Netherlands Tel. +31 (0) 6 13 68 18 08 jacco@globalretailmag.com Cosmoprof / Cosmopack Bologna / 13 Daymon Worldwide / 19 DEK (Deutsche Extrakt Kaffee) / Back Cover Drogheria & Alimentari / Inside Front Cover Spread Fifty2, The My Private Brand Project / 15 Ms. Inta Lasmane Business Development Director inta@globalretailmag.com Indian Retail Congress / 65 Jupiter Prestige Group / 5 Marca by BolognaFiere / 11 AMERICAS, ASIA, AUSTRALIA, Africa Mr. Phillip Russo Global Retail Brands magazine 240 Central Park South, Suite 9G New York, NY 10019 USA Tel. +1 917 743 6711 phillip@globalretailmag.com Massimo Zanetti Beverage USA / 9 MBD / 35 MDD Expo / 8 PLMA World of Private Label, Amsterdam / 7 PLME, Poland / 17 Ms. Laura Lemos laura@globalretailmag.com Shikatani Lacroix / 39 Theory House / 27 www.globalretailmag.com Voccii / 49 WABEL / Inside Back Cover In the next issue of Global Retail Brands Magazine… november 2014 / ISSUe FIve Global Retail BrandsGlobal Retail Brands PLMA Amsterdam Products And Suppliers European Retail Innovation Anuga Preview Are Suppliers Ready for the Digital Retail Revolution? PLMA Chicago Ad Close: April 13, 2015 Global Suppliers from Italy, Peru and more… SyStème ShiftS the power balance HEMA - Global Brand Moves into New Markets How Much Brand Choice Is Too Much? Driving Up Seductive Brand Desirability Multichannel Shopping Blurs Lines Between Virtual and Physical The Target of Tomorrow Is the Purchase Funnel Dead? www.globalretailmag.com 70 global retail brands / march 2015 OctOber 2014 / ISSUe fOUr www.vertexawards.org www.globalretailmag.com YOU THINK MEETING RETAIL BUYERS IS HARD WORK? FROZEN SUMMIT PARIS MARCH 11 & 12, 2015 80 100 800 RETAIL BUYERS SUPPLIERS BUSINESS MEETINGS OVER 2 DAYS AT WABEL WE BRING €1.4Bn PURCHASING POWER TO YOU ! YOUR PRIVATE LABEL EXPERT. www.wabel.com
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