the netherlands market overview.pdf
TRANSCRIPT
The Netherlands Market Overview-Food Industry Day-
27th November 2008
Presentation Outline
Bord Bia Programmes ‘09
Market Overview
Retailing
Foodservice
Entering the Dutch Market
The Dutch Consumer
• With a population of 16.4 million, and a
land area of just 41,526 sq km, the
Netherlands has the highest population
density in Europe.
• The highest population density is within
a 50km catchment area that includes
Amsterdam, The Hague and Rotterdam;
the Ranstad.
• 7.1 million households
• 68% of households are of 2 person or
less
Demographics
Dutch Economy
• The Dutch economy had been performing well until recently,
although the long term effects of the global financial crisis
remain to be seen.
• Measures of performance:
– 7.5m Labour force
– Unemployment [2.6% - July 2008]
– Inflation: [+2.8%]
– GDP: [€481b]
– GDP growth: [+2.15%]
Source: Euromonitor/cbs.nl
Effects of the Economic Downturn?
-40
-30
-20
-10
0
10
20
J F M A M J J A S O N D J F M A M J J A S
Consumer Confidence Index
Source: CBS
2007 2008
• Falling Consumer Confidence
• Renewed Focus on Price?
• Pressure on Retailer Margins due to food inflation
• Rationalisation programmes – C1000
Irish Exports
Irish Food & Drink exports registered a steady performance in 2007
Total value of €374m, a 6% increase on 2006
Meat: €173.6m; Dairy: €80.3m; Consumer Foods: €33.3m; Drinks: €9.2m
0
20
40
60
80
100
120
140
160
180
Meat Dairy Seafood Consumer
Foods
Beverages
2006
2007
€m
+8%
-9%
-47%
+1.1%
+12%
- The Dutch Consumer -
Key Lifestyle Trends
Time pressure impacting eating & shopping habits among young Dutch
• Young Dutch consumers (18-34) are leading busy lives and food preparation time is limited.
• They like foods that are easy to prepare and are more favourable to meal components and
convenience meals than older Dutch.
Marketing of foods as fresh offers competitive advantage
• Dutch consumers are very interested in fresh produce.
• They have a strong preference for fresh over frozen meals and see fresh as very important
on a label.
Competitive Prices.
• Price is very important to the Dutch consumer.
“The Dutch seek out promotional offers, they’ll look for the best value for money within
store, quality isn’t as important as price.”
Source; PERIscope, 2008
Key Lifestyle Trends
Time saving/convenience products
• Six in ten 18-34 year olds claim they rarely have time for breakfast – which may represent an opportunity to market convenience breakfast or on the go breakfast options to this age group.
• Younger Dutch consumers are looking for easy to cook and prepare options.
• Older Dutch are more likely to make an extra effort for meals and have good cooking skills -more sophisticated meal components may appeal to this group.
• Dutch consumers lack of interest in local produce and in country of origin may make it easier to launch Irish products.
• Irish products that offers convenience and freshness will resonate well with Dutch consumers who are particularly interested in new foods.
Low involvement in local foods and high interest in new foods may make it easier to break into the
Dutch market.
Source; PERIscope, 2008
Consumer
TrendsPrice Conscious …
• The average food spend on a evening meal for 4 is €6.80 (source Albert Heijn)
Shopping Patterns …
• Many Dutch customers travel to the supermarket by bicycle, so bulk buying is not so prevalent
• Small houses and therefore kitchens - not everyone has room for a chest freezer
Lifestyles ….
• Number of working women and smaller households are increasing
• Driving demand for easy to prepare meal solutions
- Retailing in the Netherlands-
General Observations
• Very dense retail environment
• Distinction between different retailers is relatively limited, hence the intense focus on price
• Price war started by Albert Heijn (end of 2003) to provoke shake-up in the Dutch retail scene – Super de Boer biggest casualty.
• Price wars have since eased in intensity – but price remains an important tool for promotion.
• Renewed emphasis on price due to economic climate?
Supermarket channel
• consumer sales: € 30.5 billion
- share fresh food: 48%
• number of stores: 4.700
• private label share: 24%*
• discounter share: 17.9% (Aldi 8.9% / Lidl 4.5%)
• average sales area per store: 730 sq m
• gross margin: 20%
• net margin: 2%
Supermarket channel
• consumer sales: € 30.5 billion
- share fresh food: 48%
• number of stores: 4.700
• private label share: 24%*
• discounter share: 17.9% (Aldi 8.9% / Lidl 4.5%)
• average sales area per store: 730 sq m
• gross margin: 20%
• net margin: 2%
Source: Retail Insights/Deloitte
Retail Developments in 2008
• Ahold sells its 73% stake in Schuitema – acquires 58 C1000 stores for
rebranding.
• C1000 rationalisation programme – 20% of jobs to go
• Growth of Superunie through addition of soft discounter Ko-op Consult,
reaching a combined market share of approx 35%
• Jumbo’s rapid growth coming to a halt
• Margins coming under pressure
Retail Spending
• Grocery retail market was worth €28.3 billion
in 2007 (Foodstep)
• Food and drink accounts for an estimated
€23.8 billion of this spend
• Food accounts for 15.2% of total
household expenditure (Deloitte)
• Grocery spend in 2008
is forecasted at €30.3 billion (GfK)
27.2
28.3
30.3
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
2006 2007 2008e
Grocery Retail Market €billion
Market Shares
Jumbo, Plus and Ko-op Consult belong to Superunie, which has a
combined market share of around 35%
Source: Deloitte
Co-op Codis
2%
Ko-op Consult
5%
Hoogvliet
2%
Dekamarkt
2%
Plus
6%
Jumbo
6%
LIDL
5%
Sligro Retail
2%
Spar
2%
C1000
14%
Aldi
9%
Super de Boer
7%
Other
9%
Albert Heijn
29%
Albert Heijn
C1000
Aldi
Super de Boer
Plus
Jumbo
LIDL
Ko-op Consult
Co-op Codis
Sligro Retail
Dekamarkt
Hoogvliet
Spar
Other
Who’s who in Retailing
• Top 5 retailers accounting for almost 65%
of the market
• Select number of retail chains have
nationwide presence
– Albert Heijn, C1000 & discounters
• Strict planning legislation has slowed
growth of larger out of town store formats
• No general prohibition on below-cost
pricing, although the government has
promised an agency to monitor predatory
pricing.
# 1 Albert Heijn
# 3 Schuitema/C1000
#5 Super de Boer
# 2 Superunie
# 4 Discounters
Retail Market
Segmentation
Jan Linders
Poiesz
Jumbo
DeenHoogvliet
BoniVomar
Plus
Coop
GolfEm-Té
Albert Heijn
C1000
Aldi
Lidl
Bas v.d. Heijden
Nettorama
Digros Dirk v.d. Broek
Super de Boer
Relatively
low service
Relatively low
cost
Relatively high
service
Relatively high
cost
Price Middle-market
Service
# 1 Albert Heijn
• Market Leader with 30% market share
• Owned by Ahold
• Member of AMS-Sourcing (Euro-shopper)
• 800 stores plus, in variety of store formats: AH, XL, To Go
• 58 larger C1000 Stores acquired as part of Ahold’s sale of Schuitema, increasing market share by up to 5%
• Market Leader with 30% market share
• Owned by Ahold
• Member of AMS-Sourcing (Euro-shopper)
• 800 stores plus, in variety of store formats: AH, XL, To Go
• 58 larger C1000 Stores acquired as part of Ahold’s sale of Schuitema, increasing market share by up to 5%
Albert Heijn cont...
- Strong focus on Private Label (differentiation & margin generation) – accounts for approx. 50% of
range. Actively promotes PL range as alternative to A-brand equivalents, eg: blind taste tests.
- Wide diversity A-brands used to strengthen price image.
- Challenge for suppliers is to offer ‘unique’ products, strong brands or products which cannot easily by
offered in a private label version
- Ahold owns the Gall & Gall off-sales chain
- Stores have historically offered a high level of service and quality with prices at the upper end of the market
- Extensive private label in stores including premium range ‘Excellent’
- Pioneering new store formats and scanning/payment technologies
- Strong focus on Private Label (differentiation & margin generation) – accounts for approx. 50% of
range. Actively promotes PL range as alternative to A-brand equivalents, eg: blind taste tests.
- Wide diversity A-brands used to strengthen price image.
- Challenge for suppliers is to offer ‘unique’ products, strong brands or products which cannot easily by
offered in a private label version
- Ahold owns the Gall & Gall off-sales chain
- Stores have historically offered a high level of service and quality with prices at the upper end of the market
- Extensive private label in stores including premium range ‘Excellent’
- Pioneering new store formats and scanning/payment technologies
# 2 Superunie
• €8.1 billion combined turnover in 2007
• Purchasing organization for 16 supermarket chains, with the addition of Koop Consult in July
• Combined market share of approx 35% with the addition of Koop Consult
• Account management requires contact both at Superunie HQ level and with individual members
• 85% of all product lines are purchased centrally by Superunie
• Part of EMD purchasing group
• Formidable player – ‘togetherness wins’
• €8.1 billion combined turnover in 2007
• Purchasing organization for 16 supermarket chains, with the addition of Koop Consult in July
• Combined market share of approx 35% with the addition of Koop Consult
• Account management requires contact both at Superunie HQ level and with individual members
• 85% of all product lines are purchased centrally by Superunie
• Part of EMD purchasing group
• Formidable player – ‘togetherness wins’
Private label: Perfekt, O’Lacy, Plus, Markant Merk & premium PL brands.
• Strong focus on buying price
• Economy of scale – members (often local store chains) benefit from similar
trade terms as bigger players such as Albert Heijn.
• Able & ready to counter aggressive pricing by AH
• Able & ready to confront even major suppliers (e.g. boycotts of key SKU’s)
Private label: Perfekt, O’Lacy, Plus, Markant Merk & premium PL brands.
• Strong focus on buying price
• Economy of scale – members (often local store chains) benefit from similar
trade terms as bigger players such as Albert Heijn.
• Able & ready to counter aggressive pricing by AH
• Able & ready to confront even major suppliers (e.g. boycotts of key SKU’s)
Superunie cont...
Jumbo in Amstelveen
Source: Retail Analysis photo gallery
Jumbo Turnover:
2002: €413 mln
2003: €616 mln
2004: €735 mln
2005: €811 mln
2006: €972 mln
2007: €1264 mln
Jumbo’s current strategy includes:
• Every Day Low Prices – ranked #1 by GfK for
price/service ratio
• Quality in fresh products
• High levels of customer service.
Aggressive Growth:
45 stores (’04)
98 stores (’06)
114 stores (’07)
118 Stores (Current)
• Successful and rapidly growing member of Superunie
• Currently the 6th largest individual retailer in its own right with a
market share of 5.9%, up from 4.2% in 2007 (Deloitte)
• Significant capital investment in new CDC and store expansion
• Successful and rapidly growing member of Superunie
• Currently the 6th largest individual retailer in its own right with a
market share of 5.9%, up from 4.2% in 2007 (Deloitte)
• Significant capital investment in new CDC and store expansion
Jumbo Ranks #1 in Price-Service ratio (Source: GfK)
Lower
Service
Level
Higher
Service
Level
Higher Price
Lower Price
# 3 C1000
•Total of 387 stores nationwide (450 in 2007)
•The company owns supermarkets and provides wholesale services to
independent and associated retailers
operating under the C1000 trade name.
•Focus on Fresh – often sells meat as “loss leader”
•Total of 387 stores nationwide (450 in 2007)
•The company owns supermarkets and provides wholesale services to
independent and associated retailers
operating under the C1000 trade name.
•Focus on Fresh – often sells meat as “loss leader”
Changes at C1000
• Schuitema N.V was previously 73.2% owned by Ahold, with the
remaining 26.8% held by C1000 store owners.
§ In February 2008, Ahold sold its stake in Schuitema to CVC Capital
Partners, and acquired 58 Schuitema stores as part of the deal.
Reduced turnover by 15%.
§ C1000 had a market share of 14.5% in 2007, but this should drop to
around 10%-12% with Ahold’s acquisition of the 58 stores
• Currently considering rationalisation programme, including 20% staff reduction, as result of turnover loss and current market conditions.
• Schuitema N.V was previously 73.2% owned by Ahold, with the
remaining 26.8% held by C1000 store owners.
§ In February 2008, Ahold sold its stake in Schuitema to CVC Capital
Partners, and acquired 58 Schuitema stores as part of the deal.
Reduced turnover by 15%.
§ C1000 had a market share of 14.5% in 2007, but this should drop to
around 10%-12% with Ahold’s acquisition of the 58 stores
• Currently considering rationalisation programme, including 20% staff reduction, as result of turnover loss and current market conditions.
# 4 Discounters
Hard Discounter
Soft Discounter
Soft Discounters
• 3 Formulas; DirK van der Broek, Digros, Bas van der
Heijden
• Dirk van der Broek and Dekamarket to merge in 2009
• Combined market share of 4.1% - purchasing via
Superunie since July 2008
Soft Discounters
• 3 Formulas; DirK van der Broek, Digros, Bas van der
Heijden
• Dirk van der Broek and Dekamarket to merge in 2009
• Combined market share of 4.1% - purchasing via
Superunie since July 2008
Hard Discounters
• Aldi & Lidl – 14.4% combined market share
• Increasingly playing the role of a service supermarket
• Introducing a limited number of A brands
• Moved into fresh meat, luxury foods, ready meals, fruit and veg
Hard Discounters
• Aldi & Lidl – 14.4% combined market share
• Increasingly playing the role of a service supermarket
• Introducing a limited number of A brands
• Moved into fresh meat, luxury foods, ready meals, fruit and veg
# 5 Super de Boer
• Formerly known as Laurus, the holding company adopted the name of its only remaining retail format at the beginning of 2008
• Part owned by Casino (around 45%), it sold off its Konmar and Edah formats during 2006
• Consistent winner of Supermarket of the year, but lost significant market share as a result of Albert Heijn’s price offensive.
• Formerly known as Laurus, the holding company adopted the name of its only remaining retail format at the beginning of 2008
• Part owned by Casino (around 45%), it sold off its Konmar and Edah formats during 2006
• Consistent winner of Supermarket of the year, but lost significant market share as a result of Albert Heijn’s price offensive.
Super de Boer cont...
• It had 315 stores at the end of 2007, 176 of which are independently owned. This represents a reduction of 47 stores over the previous year
• Since January 2006, Laurus/Super de Boer’s store rationalisation programme has included:
– The sale of 41 Konmar superstores. 12 were divested to Jumbo, and a further 29 to Ahold, split between Albert Heijn and Schuitema/C1000
– The sale of 223 Edah discount stores to S+S Winkels, a consortium including the domestic Sligro Food Group and B.V Sperwer.
• It had 315 stores at the end of 2007, 176 of which are independently owned. This represents a reduction of 47 stores over the previous year
• Since January 2006, Laurus/Super de Boer’s store rationalisation programme has included:
– The sale of 41 Konmar superstores. 12 were divested to Jumbo, and a further 29 to Ahold, split between Albert Heijn and Schuitema/C1000
– The sale of 223 Edah discount stores to S+S Winkels, a consortium including the domestic Sligro Food Group and B.V Sperwer.
Retail Consolidation
• Wholesale/Retail outfit Sligro considering merging its retail formats Golff(0.9% Market Share) and Em-Té (1.3%)
• Decision due Q1 2009
• Resulting chain would have 140 stores and 2.2% market share.
• Wholesale/Retail outfit Sligro considering merging its retail formats Golff(0.9% Market Share) and Em-Té (1.3%)
• Decision due Q1 2009
• Resulting chain would have 140 stores and 2.2% market share.
Brand vs Private
Label
• NL still behind GB in PL but gaining ground
• Private label market share has grown significantly in recent years to counter the discounters
• Increased to approx 24% in 2007
• PL better margins to retailers and as a weapon in the price war
• Demand is in fresh, household articles, sauces, sweets and crisps.
• Increasing segmentation in PL – Good, Better, Best
• Increasing opportunities to cater for niches that are not of interest to A-brand manufacturers
(Excluding fresh; Including Dairy and Ready Meals)
January 2005 - January 2008
Source: IRI Nederland
The Dutch
Retailers:
Albert HeijnPrivate label rangePrivate label range
Private Label
Source – Nielsen, 2008
Private Label
•
Source – Nielsen, 2008
Working with retailers
- Establishing contact
- Parallel approach with retailer & distributor
- Quality standards – BRC accreditation
- Contractual arrangements
- Language
- Promotions
- Shelf space is limited – must have USP to displace competitor
- Foodservice in the Netherlands-
Horeca€13.6b
Catering €3.4b
Foodservice €18.9b
Foodservice
Source: Foodstep
Food-to-go €1.9b
• Total Horeca turnover is €13.6 billion, representing 7.2% growth on 2006.
• 4 channel categories
– Hotel chains (Van der Valk, Golden Tulip, NH Hotels)
– Restaurants (La Place)
– Bars/pubs
– Catering/fast food (McDonalds, Burger King)
• About 300,000 people are working in about 42,000 companies.
• Supply chain management
– at various stages of evolution
Horeca .... Facts and Figures
Dutch horeca market
Bed & breakfast
Hotel-bar
Hotel-restaurants
Hotel-café-restaurants
Pension
Lodging accommodation
Hotels & lodging
Bistro
Restaurants
Bar-restaurants
Motorway restaurants
Restaurants
Bar/pub
Discotheque
Coffeeshop
Kiosk
Horeca at a recreation ground
Horeca at a sports accommodation
Beach club
Meeting point
Party centre
Bar/pubs
Ice cream parlour
Snack bar/Cafeteria
Fast food restaurants
Shoarma/Grillroom
Lunchroom
Crêperie
Station restaurants
Party catering
Foods/snackprovider not earlier mentioned
Cafeteria/fast food
Horeca
Horeca Market
Top 10 Horeca Players
427 244 La Place 5
315 335 Servex6
53235Accor7
43 169 Land Greenparks10
53 207 Best Western 9
220220 NH Hotels 8
8 271 Center Parcs4
74 299 Golden Tulip 3
226 462 McDonalds 2
54 470 Van de Valk1
OutletsTurnover (€m) CompanyRank
Foodservice to 2010
The three most important changes:
1. Rising commodity prices: grains, oil, meat, fish and dairy to
become extremely expensive. Consumer prices to rise
drastically, leading to greater emphasis on price competition and
many outlets seeking alternative suppliers.
2. Sustainability: Still relatively small, but importance growing
rapidly
3. Health and Wellness: already an important trend – will
become even more so.
Source: Foodservice Instituut Nederland
The “7 Cs” in Foodservice
Consumer
Importance 2007
Projected Importance
2020
On a scale of 1 to 100, how important are the following trends in
Foodservice?
Source: Foodservice Instituut Nederland
Food-to-Go
• Total Food-to-Go market estimated at €3.5 billion in 2007
• Largest channel is petrol stations, which account for over €1.9 billion thereof.
• Other major channels include Servex (railway station outlets) and drive-
through outlets, and food-to-go counters in retail stores
• Exploitation of Food-to-Go concept in the Netherlands remains limited to date
– high potential for growth in the next 10 years, led in particular by retailers.
• Key Drivers:
- Growing number of people commuting to work
- Growth in times and distances being travelled
- Growth in time spent in heavy traffic
- Greater variation in working hours
Source: Foodservice Instituut Nederland
Food to Go
Source: Foodservice Instituut Nederland
Catering ... Facts and Figures
• Total Catering turnover is €3.4 billion
• 4 channel categories
• Business
• Institutional
• Educational
• Others (leisure, travel)
• Dedicated service providers
• Albronn
• Sodexho
• Compass
Dutch catering market
Business catering
Nursing home Basic care
Nursing home Medical care
Hospital
Psychiatric hospital
Medical children's home
Medical day-care center
Institution for disabled
Penitentiary
Institutional catering Educational catering
Amusement parks funfairs
Museum
Cinemas and Film theatres
Theatres
Exhibition and conference areas
Leisure
Inflight catering
Ferry
Railway catering
Travel
Horeca within retail trade
Petrol stations
Supporting horeca Vending machines
Other
Catering
Dutch Catering Market
Horeca €13.6b Catering €3.4b
Foodservice €18.9b
Route to Foodservice
Source: Foodstep
Food-to-go €1.9b
Service providers - wholesalers
Foodservice – Key
Players
Wholesale Market €5-6billion
10-15% 15-20% 1%2%
Wholesale Market €5-6b
10-15% 15-20% 1%2%
10-15% 5%4%
Foodservice - Key Players
- Entering the Dutch Market -
Opportunities
• Affluent & concentrated market of 16.4 million
• Cost of production in NL is high - land, labour costs, regulations
• High level of food imports
• Ireland’s image is excellent
• English widely spoken, easily accessible, logistics manageable
• €uroland
• Demand for innovation in convenience - Irl and UK ahead
Challenges
• Sustained price-reduction activity will reduce margins for both retailers and
manufacturers, who will both aim to reduce their cost base
• Environment cues …. Number of new products launched in around organic, animal
welfare
• Price – Price – Price …Value for money
• Market segmentation …Value / mainstream / premium
• Private label growth is set to continue, spearheaded by Albert Heijn
Tips for the Dutch Market
• Understand the Category from a Dutch perspective
• Parallel Approach (Distributor:Retailer/Foodservice)
• Formal business arrangements: Contracts are very strong
• Know your bottom Price
• Don’t go immediately to No.1 retailer
• PL as an option to enter this market
- Bord Bia Activities in 2009 -
Development & Knowledge Hub
• Undertaking Category Analysis Reviews
– Identifying new market opportunities
• Business Mentoring
– Assisting companies in their initial steps to market entry
– Business mentors will be of a high calibre, with a strong background in retail and/or foodservice
• Directory of food manufacturers in the Netherlands
– Identify market opportunities for consumer food products/ingredients
• Trade Directory/Market Insight
• Networking Opportunities
– Irish Netherlands Business Association
