GATES TO GERMAN RETAIL MARKET Lisbon/Portugal • March 3d, 2016 Prepared for aicep Portugal Global Trade & Investment Agency

GATES TO GERMAN RETAIL MARKET

© by Markus Krick, 2016-03

1

AGENDA •

Basic data Germany

•

Basic data German retail trade • • • • • •

•

Overall market data Edeka Group Schwarz Group Rewe Group Aldi Metro

Gates to German retail market • • • • • •

Critical self-assessment Success factors marketing Success factors sales Checklist financial requirements Checklist logistical requirements Checklist legal requirements

•

Snapshot of Importhaus Wilms/Impuls

•

Recommendation

GATES TO GERMAN RETAIL MARKET

© by Markus Krick, 2016-03

2

AGENDA •

Basic data Germany

•

Basic data German retail trade • • • • • •

•

Overall market data Edeka Group Schwarz Group Rewe Group Aldi Metro

Gates to German retail market • • • • • •

Critical self-assessment Success factors marketing Success factors sales Checklist financial requirements Checklist logistical requirements Checklist legal requirements

•

Snapshot of Importhaus Wilms/Impuls

•

Recommendation

GATES TO GERMAN RETAIL MARKET

© by Markus Krick, 2016-03

3

BASIC DATA GERMANY History and Geography •

Founded May 23d 1949

•

Surface area is 357.376 km2

•

Reunification with former German Democratic Republic on October 3d 1990

•

16 Federal States (incl. The 6 Easterrn States following reunification)

•

North-Rhine Westphalia is the larges state (17.64 m inhabitants)

•

Berlin, the capital, ist the largest city (3.47 m inhabitants)

•

Nine countries border Germany

Source: www.destatis.de, 2016

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© by Markus Krick, 2016-03

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BASIC DATA GERMANY Population and Households •

81.459 m inhabitants (227 per m2)

•

40.2 m German households: • • •

40.8% are 1 person households 34.4% are 2 person households 24.8% are 3+ person households

•

Average German household: 2.01 people

•

Ageing population: • •

•

By 2020 22.5% estimated to be older than 65 years By 2050 31.6% estimated to be older than 65 years

8.1 m migrants living in Germany (Mikrozensus 2014) • •

Thereof 3.7 m from EU-28 (esp. Poland 0,7m and Italy 0,6m) Thereof 2.7 m from other Europe (esp.Turkey 1.5m) Source: www.destatis.de, 2016

GATES TO GERMAN RETAIL MARKET

© by Markus Krick, 2016-03

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BASIC DATA GERMANY Economy •

Fourth largest economy in the world

•

GDP of 3,027 bn Euro (per capita 32,299 Euro)

•

43.2 m employed persons

•

Unemployment rate 4.5% (2.9 m persons)

•

Economic growth 1.7% in 2015

•

Est. economic growth 1.7% in 2016

•

Inflation rate 0.3% in 2015

•

Currency: Euro

Source: www.destatis.de ,www.de.statista.com and www.bloombergbriefs.com, 2016

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BASIC DATA GERMANY Confidence: slightly below average but slightly pessimistic as well

Source: The Nielsen Company, Consumer Confidence Series, Q4/2015

GATES TO GERMAN RETAIL MARKET

© by Markus Krick, 2016-03

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BASIC DATA EUROPE FMCG sales growth rates per country

Source: The Nielsen Company, 11/2015

GATES TO GERMAN RETAIL MARKET

© by Markus Krick, 2016-03

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BASIC DATA EUROPE FMCG sales growth rates per country

Source: The Nielsen Company, 11/2015

GATES TO GERMAN RETAIL MARKET

© by Markus Krick, 2016-03

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AGENDA •

Basic data Germany

•

Basic data German retail trade • • • • • •

•

Overall market data Edeka Group Schwarz Group Rewe Group Aldi Metro

Gates to German retail market • • • • • •

Critical self-assessment Success factors marketing Success factors sales Checklist financial requirements Checklist logistical requirements Checklist legal requirements

•

Snapshot of Importhaus Wilms/Impuls

•

Recommendation

GATES TO GERMAN RETAIL MARKET

© by Markus Krick, 2016-03

10

AGENDA •

Basic data Germany

•

Basic data German retail trade • • • • • •

•

Overall market data Edeka Group Schwarz Group Rewe Group Aldi Metro

Gates to German retail market • • • • • •

Critical self-assessment Success factors marketing Success factors sales Checklist financial requirements Checklist logistical requirements Checklist legal requirements

•

Snapshot of Importhaus Wilms/Impuls

•

Recommendation

GATES TO GERMAN RETAIL MARKET

© by Markus Krick, 2016-03

11

EUROPEAN TOP 10 PLAYERS GROCERY Top 10 grocery europe gross sales in Mio. € 1. 2. 3. 4.

Schwarz-Gruppe Carrefour Tesco ALDI ALDI Süd ALDI Nord 5. EDEKA 6. Rewe Group 7. Auchan 8. Leclerc 9. ITM (Intermarché) 10. Metro Group

D F GB D

D D F F F D

numbers sales-area in of stores sqm

2014

2014

2014

72.907 54.478 52.248 48.305 27.429 20.876 45.942 40.199 34.508 30.221 28.814 26.826

11.270 9.687 4.760 8.166 3.305 4.861 13.299 10.183 3.430 758 2.716 1.015

14.065.531 10.767.783 6.499.844 6.439.754 2.695.259 3.744.495 10.684.858 8.738.711 7.524.717 3.437.538 4.201.719 7.654.829

Quelle: Planet Ret ail - 15. September 2015 Berücksichtigt sind Umsät ze, die mit dem Verkauf von Food- und Near-Food-Waren im Einzel- und Großhandel erzielt wurden, exklusiv Foodservice.

• •

5 of Europe´s Top 10 grocery players are German Germany itself is dominated by German domestic retail chains

GATES TO GERMAN RETAIL MARKET

© by Markus Krick, 2016-03

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GERMAN DISTRIBUTION CHANNELS

•

Discounters count for 42% of total FMCG sales revenues and for 50% of total outlets

GATES TO GERMAN RETAIL MARKET

© by Markus Krick, 2016-03

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GERMAN TOP 10 PLAYERS FOOD TRADE

Top 10 Food Germany 2015 turnover food in mio. €

1. 2.

EDEKA-Gruppe

1 2

change in %

share

total turnover in mio. €

Food in %

2014

2013

2014

46.086

46.999

2,0%

90,6%

51.850

26.000 27.657

6,4%

81,2%

34.060

1

26.813 27.559

2,8%

72,5%

37.999

22.128 22.554

1,9%

82,0%

27.505

5.

ALDI-Gruppe Metro-Gruppe

10.808 10.832

0,2%

36,5%

29.718

6.

Lekkerland

8.365

8.702

4,0%

99,0%

8.790

7.

dm

5.258

5.760

9,5%

90,0%

6.400

8.

Rossmann

4.491

4.866

8,4%

90,0%

5.407

9.

Globus

3.073

3.170

3,2%

67,0%

4.731

2.904

3.020

4,0%

77,7%

3.889

155.926 161.120

3,3%

76,6%

210.349

Schwarz-Gruppe

3.

Rewe-Gruppe

4.

2

10. Bartel-Langness-Gruppe Top 10 total source: Trade Dimension - M arch 2015

it alic: estimation of Trade Dimensions

1 including ext ernal sales of SEH

2 reevaluat ion of last year turnover

• • •

Top 5 count for about 82% of total turnover 2 pure player discount within top 4 Internet shopping in the food sector virtually non-existent

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RANKING TOP 6 DISCOUNTER

Top 6 Discounter Germany 2015 gross-turnover in mio. €

1. ALDI-Gruppe ALDI Süd, Mühlheim ALDI Nord, Essen 2. Lidl 3. Netto 4. Penny 5. Norma 6. Netto (Dansk Supermarked)

2012

2013

27.369 15.446 11.923 19.690 12.933 7.494 3.026 1.191

27.600 15.500 12.100 20.310 13.221 7.532 3.127 1.203

change in %

0,8% 0,3% 1,5% 3,1% 2,2% 0,5% 3,3% 1,0%

numbers of stores1 Mrz 15

4.223 1.852 2.371 3.196 4.119 2.169 1.289 351

Okt 15

change

4.192 1.849 2.343 3.182 4.112 2.164 1.287 350

-31 -3 -28 -14 -7 -5 -2 -1

sales-area in sqm 2013

3.454.305 1.984.876 1.469.429 2.663.986 3.135.496 1.554.887 894.841 254.185

2014

3.516.672 1.998.227 1.518.445 2.716.799 3.159.173 1.548.233 902.176 258.076

Ø-sqm change in %

1,8% 0,7% 3,3% 2,0% 0,8% -0,4% 0,8% 1,5%

Okt 15

827 842 851 767 707 702 734

sourc e: Trade Dimension; 26. Mai 2015, sales-area in sqm st at us 5. February 2015 it alic : estimation of Trade Dimensions 1

sourc e: Trade Dimension/ LZ - 2. O c t ober 2015

• •

Top 3 count for about 83% of total turnover 3 „hard“and 3 „soft“ discount players

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RANKING TOP 10 HYPERMARKETS Top 10 hypermarkets based on Key Accounts Germany 2015

1. 2. 3. 4. 5. 6. 7. 8. 9. 10.

Kaufland* real,-* EDEKA-Gruppe (E-Center, Marktkauf, Globus Rewe-Group (Rewe Center, Akzenta)* Bartels-Langness (Famila, Citti)* Dohle-Gruppe (HIT)+ Bünting (Combi, Famila) Kaes (V-Markt) Coop (Sky)

source: Trade Dimension - 20. Januar 2015

*

gross-turnover in mio. €1

numbers of stores

2014

Sep 15

13.600 9.139 5.689 3.310 1.663 1.531 1.241 885 496 181

645 302 309 46 99 87 84 113 38 14

estimat ion of Trade Dimensions

hypermarkets up 1.500 qm

•

Top 2 count for more than 60% of total turnover and about 55% number of stores

GATES TO GERMAN RETAIL MARKET

© by Markus Krick, 2016-03

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RANKING TOP 4 CASH + CARRY

Top 4 Cash + Carry Germany 2015

1. Metro-Gruppe Metro, C+C Schaper 2. Transgourmet Selgros C&C, Transgourmet C&C 3. EDEKA-Gruppe E-C+C Großmarkt, Ratio 4. Intergast1 u.a. Wasgau C+C, Handelshof, C&C Abhollager

turnover in io. €

market share

numbers sales-area in of stores sqm

2014

2014

2014

2014

5.173 1.770

51,5% 17,6%

107 47

943.578 431.200

1.402 1.256

13,9% 12,5%

111 72

416.430 367.380

it alic: estimat ion of Trade Dimensions 1

member of M arkant (eg. Handelshof , Brülle & Schmelzer, Wasgau, Kaes)

source: Trade Dimension - M arch 2015

• •

Metro as undisputable market leader Top 2 count for about 69% of market share value

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© by Markus Krick, 2016-03

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LONGTERM DEVELOPMENT OF DISTRIBUTION CHANNELS

• •

Discount and small hypermarkets slightly growing (Small) supermarkets declining

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IMPORTANCE DISTRIBUTION CHANNELS

• •

Small hypermarkets increase number of stores and turnover Drugstores with growth momentum

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EXPENDITURES PER PURCHASE AND NO. OF PURCHASES

• •

High purchase frequency at discount of more than once per week Discounters are visited approx. three times as much as hypermarkets and supermarkets and four times as much as drugstores. GATES TO GERMAN RETAIL MARKET

© by Markus Krick, 2016-03

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FULFILLMENT OF DEMAND PER DISTRIBUTION CHANNEL

• •

Demand of FMCG products mostly covered by discounters German consumers as „value seekers“

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CONSUMER BASE AND TOTAL EXPENDITURES

•

Discounters by far leading in household penetration and expenditures

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SEASONALITY OF RETAIL TURNOVER

•

Three major peaks: Eastern, Pentecost and Christmas/New Year´s Eve

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PRIVATE LABEL SHARES IN 2014 BY CATEGORY: VOLUME

•

Dry grocery, dairy and frozen as leading PL food categories volume Source: PLMA Yearbook, 2015

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PRIVATE LABEL SHARES IN 2014 BY CATEGORY: VALUE

•

Dairy, dry grocery and frozen as leading PL food categories value Source: PLMA Yearbook, 2015

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PRIVATE LABEL SHARES IN 2014 BY PRODUCT

•

Market shares almost stable Source: PLMA Yearbook, 2015

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PRIVATE LABEL SHARES IN 2014 BY PRODUCT

•

Canned tuna and fish specialties growing, potato products and seasoning decreasing Source: PLMA Yearbook, 2015

GATES TO GERMAN RETAIL MARKET

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PRIVATE LABEL SHARES IN 2014 BY PRODUCT

•

Thin savory sauces, frozen fruit, ready meals and vegetables growing Source: PLMA Yearbook, 2015

GATES TO GERMAN RETAIL MARKET

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PRIVATE LABEL SHARES IN 2014 BY PRODUCT

•

Toilet tissues moist growing, all other almost stable Source: PLMA Yearbook, 2015

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© by Markus Krick, 2016-03

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DEVELOPMENT ORGANIC FOOD

•

Continuously growth of turnover and share of total food business

GATES TO GERMAN RETAIL MARKET

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AGENDA •

Basic data Germany

•

Basic data German retail trade • • • • • •

•

Overall market data Edeka Group Schwarz Group Rewe Group Aldi Metro

Gates to German retail market • • • • • •

Critical self-assessment Success factors marketing Success factors sales Checklist financial requirements Checklist logistical requirements Checklist legal requirements

•

Snapshot of Importhaus Wilms/Impuls

•

Recommendation

GATES TO GERMAN RETAIL MARKET

© by Markus Krick, 2016-03

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BASIC DATA GERMAN RETAIL TRADE Factsheet Edeka •

Germany´s No. 1 food retailer

•

Co-operative, head office in Hamburg/Germany

•

Seven regions

•

Characteristic: high number of independents

•

Price level about 5-10% higher vs. competition (non-mainstream categories)

•

Per region 3-7 distribution center, in total over 30 DCs across Germany

•

Direct store delivery possible (supermarekt/hypermarket)

•

Manufacturing facilities for meat, sausages, bread and bakery products, wine

•

Member of European trade alliance Alidis/Agenor

•

Number of stores in 2015: 13,573

Source: TradeDimensions, 2016

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BASIC DATA GERMAN RETAIL TRADE Retail format and banner

Source: TradeDimensions, 2016

GATES TO GERMAN RETAIL MARKET

© by Markus Krick, 2016-03

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AGENDA •

Basic data Germany

•

Basic data German retail trade • • • • • •

•

Overall market data Edeka Group Schwarz Group Rewe Group Aldi Metro

Gates to German retail market • • • • • •

Critical self-assessment Success factors marketing Success factors sales Checklist financial requirements Checklist logistical requirements Checklist legal requirements

•

Snapshot of Importhaus Wilms/Impuls

•

Recommendation

GATES TO GERMAN RETAIL MARKET

© by Markus Krick, 2016-03

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BASIC DATA GERMAN RETAIL TRADE Factsheet Schwarz Group •

Germany´s No. 2 food retailer

•

Privately owned trust, head office in Neckarsulm/Germany

•

2 store formats: discount stores (Lidl) and hypermarkets (Kaufland)

•

Characteristic: price-focussed, highly expansive

•

Price level about -5 to -10% less vs. competition (all categories)

•

Lidl around 38 DCs and Kaufland 5 DCs across Germany

•

No direct store delivery possible

•

Manufacturing facility for chocolate products

•

European presence in more than 20 countries

•

Number of stores in 2015: 3,838

Source: TradeDimensions, 2016

GATES TO GERMAN RETAIL MARKET

© by Markus Krick, 2016-03

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BASIC DATA GERMAN RETAIL TRADE Retail format and banner

Source: TradeDimensions, 2016

GATES TO GERMAN RETAIL MARKET

© by Markus Krick, 2016-03

36

AGENDA •

Basic data Germany

•

Basic data German retail trade • • • • • •

•

Overall market data Edeka Group Schwarz Group Rewe Group Aldi Metro

Gates to German retail market • • • • • •

Critical self-assessment Success factors marketing Success factors sales Checklist financial requirements Checklist logistical requirements Checklist legal requirements

•

Snapshot of Importhaus Wilms/Impuls

•

Recommendation

GATES TO GERMAN RETAIL MARKET

© by Markus Krick, 2016-03

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BASIC DATA GERMAN RETAIL TRADE Factsheet Rewe •

Germany´s No. 3 food retailer

•

Co-operative, head office in Cologne/Germany

•

6 regions + one independent region (Rewe Dortmund)

•

Characteristic: modern and celarly structured, less independents compared to Edeka

•

Price level about 5-10% higher vs. competition (non-mainstream categories)

•

Per region 1-3 distribution center, in total over 15 DCs across Germany

•

Direct store delivery possible (supermarkets/hypermarkets)

•

Manufacturing facilities for meat, bread and bakery products

•

Member of European trade alliance Coopernic

•

European presence in 11 countries, mainly Eastern Europe

•

Number of stores in 2015: 7,024

Source: TradeDimensions, 2016

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© by Markus Krick, 2016-03

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BASIC DATA GERMAN RETAIL TRADE Retail format and banner

Source: TradeDimensions, 2016

GATES TO GERMAN RETAIL MARKET

© by Markus Krick, 2016-03

39

AGENDA •

Basic data Germany

•

Basic data German retail trade • • • • • •

•

Overall market data Edeka Group Schwarz Group Rewe Group Aldi Metro

Gates to German retail market • • • • • •

Critical self-assessment Success factors marketing Success factors sales Checklist financial requirements Checklist logistical requirements Checklist legal requirements

•

Snapshot of Importhaus Wilms/Impuls

•

Recommendation

GATES TO GERMAN RETAIL MARKET

© by Markus Krick, 2016-03

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BASIC DATA GERMAN RETAIL TRADE Factsheet Aldi •

Germany´s No. 4 food retailer

•

Privately owned, head offices in Essen (Aldi Nord) and Mühlheim/Germany (Aldi Süd)

•

2 independent regions, split through the middle of the country

•

Characteristic: focus on high quality at a reasonable price

•

Price level about -10% less vs. competition (all categories)

•

Aldi Nord 35 DCs and Aldi Süd 31 DCs across Germany

•

No direct store delivery possible

•

Manufacturing facilities for coffee roasting

•

Global presence in 17 countries, mainly in Europe

•

Number of stores in 2015: 4,232

Source: TradeDimensions, 2016

GATES TO GERMAN RETAIL MARKET

© by Markus Krick, 2016-03

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BASIC DATA GERMAN RETAIL TRADE Retail format and banner

Source: TradeDimensions, 2016

GATES TO GERMAN RETAIL MARKET

© by Markus Krick, 2016-03

42

AGENDA •

Basic data Germany

•

Basic data German retail trade • • • • • •

•

Overall market data Edeka Group Schwarz Group Rewe Group Aldi Metro

Gates to German retail market • • • • • •

Critical self-assessment Success factors marketing Success factors sales Checklist financial requirements Checklist logistical requirements Checklist legal requirements

•

Snapshot of Importhaus Wilms/Impuls

•

Recommendation

GATES TO GERMAN RETAIL MARKET

© by Markus Krick, 2016-03

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BASIC DATA GERMAN RETAIL TRADE Factsheet Metro •

Germany´s No. 5 food retailer

•

Stock corporation, head office in Düsseldorf/Germany

•

3 store formats food: hypermkts. (Real), C & C (Metro), dept. stores (Galeria Kaufhof)

•

Characteristic: highly diversified, innovation of retail practises and technology

•

Price level about +/- 0% vs. average (Real and Metro) resp. +10% vs. average (GK)

•

Real 6 DCs, Metro 18 DCs across Germany

•

Direct store delivery possible

•

No manufacturing facilities but broad ranges of private label products

•

Global presence in 32 countries, mainly in Europe, Asia and Africa

•

Number of stores in 2015: 528

Source: Trade Dimensions, 2016

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BASIC DATA GERMAN RETAIL TRADE Retail format and banner

Source: TradeDimensions, 2016

GATES TO GERMAN RETAIL MARKET

© by Markus Krick, 2016-03

45

AGENDA •

Basic data Germany

•

Basic data German retail trade • • • • • •

•

Overall market data Edeka Group Schwarz Group Rewe Group Aldi Metro

Gates to German retail market • • • • • •

Critical self-assessment Success factors marketing Success factors sales Checklist financial requirements Checklist logistical requirements Checklist legal requirements

•

Snapshot of Importhaus Wilms/Impuls

•

Recommendation

GATES TO GERMAN RETAIL MARKET

© by Markus Krick, 2016-03

46

AGENDA •

Basic data Germany

•

Basic data German retail trade • • • • • •

•

Overall market data Edeka Group Schwarz Group Rewe Group Aldi Metro

Gates to German retail market •

Critical self-assessment

•

Success factors marketing Success factors sales Checklist financial requirements Checklist logistical requirements Checklist legal requirements

• • • •

•

Snapshot of Importhaus Wilms/Impuls

•

Recommendation

GATES TO GERMAN RETAIL MARKET

© by Markus Krick, 2016-03

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CRITICAL SELF-ASSESSMENT Initial questions you should ask yourself: •

Why are you looking for export business?

•

Have you done your homework on your domestic market?

•

What is your sales approach: private label or brand?

•

What is your unique selling proposition (USP)?

•

What are you willing to invest?

•

Where has your brand/product been successful in the past?

•

How tough will it be to launch your brand?

•

Can all parties involved make money with your brand?

Self-reflection as a crucial precondition

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CRITICAL SELF-ASSESSMENT Are you informed about your target market? •

What do yo know about the size of your target market?

•

What do you know about existing product offers?

•

What do you know about your target consumers?

Information as another crucial precondition

GATES TO GERMAN RETAIL MARKET

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PORTUGAL: (GERMAN) BRAND CONNOTATION

Source: Google, 2014

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HOW TO OBTAIN MARKET DATA Primary sources: evaluation of market size and existing product offers •

To get an category overview through purchase of back data/snapshot

•

Costs depend on the category and depth or split of information requested

•

Costs vary from € 5-15,000 per category

•

Potential market research companies: •

The Nielsen Company (www.nielsen.com)

•

GfK (www.gfk.com)

•

Trade Dimensions (www.tradedimensions.de)

•

Planet Retail (www.planetretail.net)

•

IRI (www.iriworldwide.com)

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HOW TO OBTAIN MARKET DATA Secondary sources: evaluation of market size and existing product offers •

To get an category overview through self-study

•

Desk research as lower-budget option

•

Potential sources trade press: •

Lebensmittel Zeitung (www.lebensmittelzeitung.net)

=> general grocery

•

Lebensmittel Praxis (www.lebensmittelpraxis.de)

=> general grocery

•

Rundschau für den Lebensmittelhandel (www.rundschau.de) => general grocery

•

Allgemeine Fleischer Zeitung (www.fleischwirtschaft.de)

=> meat

•

Milch-Marketing (www.moproweb.de)

=> dairy

•

Fischmagazin (www.fischmagazin.de)

=> fish

•

Getränke Zeitung (www.getraenke-zeitung.de)

=> beverages

•

Inside (www.inside-getraenke.de)

=> beverages

•

Café Future (www.cafe-future.net)

=> horeca

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HOW TO OBTAIN MARKET DATA Secondary sources: evaluation of market size and existing product offers •

To get an category overview through self-study

•

Desk research as lower-budget option

•

Potential sources Internet: •

Retailer websites

•

Manufacturer websites

•

Government websites/tax authorities (www.zoll.de)

•

Statistics offices (www.destatis.de and www.ec.europa.eu/eurostat)

•

Logistics websites (www.dachser.com, www.kv-nagel.de and www.dhl.de)

•

Service provider websites (www.gs1.com) and (www.gruener-punkt.de)

•

Market research companies (Nielsen, GfK, etc.)

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HOW TO OBTAIN MARKET DATA Consumer research: evaluation of consumer preferences, habits and needs •

To get insights regarding consumer requirements and consumption patterns

•

To get insights regarding taste preferences and products standards (esp. East/West)

•

Qualitative research: focus groups, depth psychological interviews, etc.

•

Quantitative research: consumer panel, online research, etc.

•

Costs vary from € 7-15,000 per group discussion, interview series or back data

•

Potential market research companies: •

The Nielsen Company (www.nielsen.com)

•

GfK (www.gfk.com)

•

IFAK (www.ifak.de)

•

TNS Infratest (www.tns-infratest.com)

•

Insight Europe (www.insighteurope.de)

•

Millward Brown (www.millwardbrown.de)

•

Rheingold (www.rheingold-marktforschung.de)

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AGENDA •

Basic data Germany

•

Basic data German retail trade • • • • • •

•

Overall market data Edeka Group Schwarz Group Rewe Group Aldi Metro

Gates to German retail market •

Critical self-assessment

•

Success factors marketing Success factors sales Checklist financial requirements Checklist logistical requirements Checklist legal requirements

• • • •

•

Snapshot of Importhaus Wilms/Impuls

•

Recommendation

GATES TO GERMAN RETAIL MARKET

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SUCCESS FACTORS MARKETING Five success factors, partially taken

as a case study

•

Benefit

=> Uncommon taste and mouth feeling

•

Brand recognition

=> Consistent brand identity/positioning

•

Quality

=> High quality, trading up

•

Originality

=> Authenticity and credibility

•

Target pricing

=> Value for money: premium but affordable

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SUCCESS FACTORS MARKETING Benefit •

British craftsmanship, unconventional and all natural

•

Novel tasting profile, extraordinary

•

Clear Unique Selling Proposition (USP) – hardly to be immitated

German followers

Original

€ 1,99/150g € 13.27/1kg

€ 1.89/120g € 15.75/1kg

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€ 1.99/110g € 18.09/1kg

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€ 0.99/150g € 6.60/1kg

SUCCESS FACTORS MARKETING Brand recognition •

Clear product concept, easy to understand

•

Consistent brand identity/brand positioning > brand communication

German assortment of Kettle Chips brand

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SUCCESS FACTORS MARKETING Quality •

High quality ingredients (free from GMO, flavour enhancers, artificial colours, etc.)

•

100% Portuguese origin (or at least perceived as such)

•

Authorization through authorities such as EU organic

•

Certification of independent NGO (such as Eurofins institute or DLG)

•

Certification of consumer or trade magazines (such as Stiftung Warentest or LP)

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SUCCESS FACTORS MARKETING Certificates to differentiate from competition, not mandatory •

Organic/Bio (www.bio-siegel.de)

•

Fairtrade (www.fairtrade-deutschland.de)

•

Rainforest Alliance (www.rainforest-alliance.org)

•

Utz (www.utzcertified.org)

•

SGS Institut Fresenius (www.institut-fresenius.de)

•

Eurofins (www.eurofins.de)

•

DLG Deutsche Landwirtschafts-Gesellschaft (www.dlg.org)

•

QS test system for meat, meat products, fruit and vegetables (www.q-s.de)

•

Stiftung Warentest (www.stiftung-warentest.de)

•

Ökotest (www.oekotest.de)

•

Lebensmittel Praxis (www.lebensmittelpraxis.de)

•

Lebensmittel Zeitung (www.lebensmittelzeitung.net)

•

Reader´s Digest (www.rdtrustedbrands.com)

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SUCCESS FACTORS MARKETING •

Credibility: •

Authenticity* = Uniqueness + Tradition + Trust + Worthiness

•

100% Portuguese origin

•

Authorization through authorities such as EU protected origin

100%

*Source: IFAK, April 2005; qualitative market research for Wilms/Impuls

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SUCCESS FACTORS MARKETING Target pricing •

Germany = Europe´s retail market with lowest price level for food products

•

Pricing structure corresponding to sales channel

•

Value and not only „cheap“

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AGENDA •

Basic data Germany

•

Basic data German retail trade • • • • • •

•

Overall market data Edeka Group Schwarz Group Rewe Group Aldi Metro

Gates to German retail market • • • • • •

Critical self-assessment Success factors marketing Success factors sales Checklist financial requirements Checklist logistical requirements Checklist legal requirements

•

Snapshot of Importhaus Wilms/Impuls

•

Recommendation

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SUCCESS FACTORS SALES Sales approach •

Strategy depending on your company´s targets: •

Producing generic products/private label?

•

Selling a unique brand?

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SUCCESS FACTORS SALES Sales approach •

Strategy depending on your company´s targets: •

Producing generic products/private label?

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SUCCESS FACTORS SALES Sales approach •

Strategy depending on your company´s targets •

Selling a unique brand?

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SUCCESS FACTORS SALES Sales approach determines certain general conditions •

Defining your needs and capabilities

•

Finding the „right“ retail format to focus on Portuguese manufacturing company Strategy

Requirements

Brand

Private Label

Key-Account-Management required Field force support required

x (x)

x -

DC/Central warehouse shipment Direct store delivery

x (x)

x -

Sales counter (dairy/meat) Self service/pre packed products

(x) x

x

German manufacturer or German distributor

German trade

Source: own graphic

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SUCCESS FACTORS SALES Essential preparatory work before contacting third parties •

Presentation of company, product and its USP/strategy (in German language)

•

Production of fresh samples

•

Elaboration of product specification and technical data (in German language)

•

Elaboration of pricing structure (reversed usage of decimal point and comma)

•

Clear logistics solution for transport to all parts of Germany

•

Check on legal conformity (e.g. by SGS Institut Fresenius, Eurofins)

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MANUFACTURER/DISTRIBUTOR ASSESSMENT GRID

Source: Export Solutions (www.exportsolutions.com)

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SUCCESS FACTORS SALES Tender process 1. 2. 3. 4. 5. 6. 7. 8. • • • •

(Personal) presentation of company and products, incl. first price proposal Obtain buyer´s first feedback Request to participate in tender process (no fixed windows; usually mid of year) Demonstration of capabilities (listing situation, production output, etc.) Adaptation/development of final product formula Revision of price proposal (DDP/DAP) and product specification/data sheet; if competing against existing products: undercut prices by at least -5% Audit of company and production facilities Adaptation/development of private label packaging design All product parameters provided within the tender process Usually tender by internet platform (exception Aldi Nord and Norma: Fax) Excellent QA mandatory All communication (written/spoken) in German language

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SUCCESS FACTORS SALES Contacts sales and distribution •

Retailers • • • • • • •

•

Edeka: Rewe: Kaufland: Lidl: Aldi Süd/Nord: Metro: Organic:

www.edeka-gruppe.de www.rewe.de www.kaufland.de www.lidl.de www.aldi.de www.metrogroup.de www.alnatura.de www.denree-biohandelshaus.de

Wholesalers/importers fruit & vegetable Metro: • Transgourmet: • CF Gastro: • Keuthmann: •

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www.metrogroup.de www.transgourmet.de www.cfgastro.de www.keuthmann.net

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SUCCESS FACTORS SALES Contacts sales and distribution •

Distributor organizations food • •

•

•

Ruwisch & Zuck (cheese only): Uplegger (cheese & dairy):

www.ruwischzuck.de www.uplegger.de

Specialized distributors beverages and spirits • • •

•

www.esma.org www.ceisa.org

Specialized distributors chilled food •

•

European Sales & Marketing Association: Circle of Specialty Food Distributors:

MBG International Premium Brands: Drinks & More: Trend Beverages:

www.mbg-online.net www.drinks-and-more.com www.trend-beverages.de

Specialized distributors wine • • • •

Wein Wolf: Ardau Weinimport: Eggers & Franke: Mack & Schühle:

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www.weinwolf.de www.ardau.de www.egfra.de www.mack-schuehle.de

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SUCCESS FACTORS SALES Contacts sales and distribution •

Specialized manufacturers and distributors non food •

DMV Diedrichs Markenvertrieb:

www.markenvertrieb.de

•

Sebapharma:

www.sebapharma.de

•

Klosterfrau Healthcare Group:

www.klosterfrau.de

•

Mapa:

www.mapa.de

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AGENDA •

Basic data Germany

•

Basic data German retail trade • • • • • •

•

Overall market data Edeka Group Schwarz Group Rewe Group Aldi Metro

Gates to German retail market • • • • • •

Critical self-assessment Success factors marketing Success factors sales Checklist financial requirements Checklist logistical requirements Checklist legal requirements

•

Snapshot of Importhaus Wilms/Impuls

•

Recommendation

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CHECKLIST FINANCIAL REQUIREMENTS Evaluating costs of entry •

Size of category

•

Sales approach/route to market: •

•

Brand: >> Category leadership >> Top 3 category brand >> Niche player Private label >> Low price, high volumes >> Low price, high volumes + service (e.g. lead times, return of goods, etc.)

•

Category spend level (media, discounts, promotion, etc.)

•

Fixed costs of entry (e.g. listing fees)

•

Home country as benchmark Source: based on Export Solutions (www.exportsolutions.com)

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CHECKLIST FINANCIAL REQUIREMENTS Costs to be covered within product calculation •

VAT (e.g. Germany): food products = 7%; VAT beverages/non food = 19% • •

•

Direct business with German retail: Indirect business with indermediary:

invoice without VAT intermediary charges VAT to retailer

Trade margin • • •

Depending on product category, category growth and manufacturer´s promotion program; only top A-brands and signpost items allow lower margins Several different trade expenses (off/on invoice rebates, either fixed or variable) Advertising allowance („Werbekostenzuschuss“/WKZ) e.g. to feature products in leaflets Net margin expectations

Format

Brand

Private Label

Retail

38-60%

28-40%

Cash & Carry

38-60%

28-40%

Discount

30-45%

25-45%

Foodservice/wholesalers

20-45%

20-45%

Gaz stations

50-65%

-

Source: own graphic

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CHECKLIST FINANCIAL REQUIREMENTS Costs to be covered within product calculation •

VAT (e.g. Germany): food products = 7%; VAT beverages/non food = 19% • •

•

Direct business with German retail: Indirect business with indermediary:

invoice without VAT intermediary charges VAT to retailer

Trade margin • • •

Depending on product category, category growth and manufacturer´s promotion program; only top A-brands and signpost items allow lower margins Several different trade expenses (off/on invoice rebates, either fixed or variable) Advertising allowance („Werbekostenzuschuss“/WKZ) e.g. to feature products in leaflets

•

Sales organization (proprietary sales force vs. manufacturer/distributor)

•

Marketing activities (displays, trade promotion, advertising, etc.)

•

Excise duties (e.g. tobacco, coffee, beer, sparkling wine, spirits)

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CHECKLIST FINANCIAL REQUIREMENTS Costs to be covered within product calculation •

•

In- and outbound logistics •

Coverage of fragmented market structure necessary (DC vs. DSD)

•

Regional hubs of larger logistic service providers offer reliable consolidating service

•

Several service providers:

Kraftverkehr Nagel (www.nagel-group.com), Dachser (www.dachser.com)

Packaging and Waste Disposal fees •

Legal basis: ordinance on the avoidance and recovery of packaging waste

•

Valid for sales packaging filled with goods to be purchased and used by private consumers

•

Fees payable are based on the type and weight of material used in the packaging

•

Branded manufacturers:

•

Private label manufacturers: retailer is responsible for admin./handling of packaging waste

•

Additional waste disposal fee for outer packaging (e.g. cases, trays) charged by retailer

•

Several service providers:

mandatory to participate in the system

DSD GmbH (www.gruener-punkt.de), Belland Vision (www.bellandvision.de), Interseroh (www.interseroh.de)

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CHECKLIST FINANCIAL REQUIREMENTS Costs to be covered within product calculation •

•

Deposit system for beverages (applicable for beverages in PET, glass and cans) •

Deposit of € 0,25 charged on non-returnable (one-way) beverage packaging

•

Manadatory to label one-way packaging with DPG symbol and valid EAN code

•

Retailers have to take back all types of beverage packaging offered in their stores

•

Not applicable to wine, milk, juice and nectar

•

Not applicable to „ecologically sound“ packaging (e.g. cardboard/Tetra Pak)

Currency fluctuations

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CHECKLIST FINANCIAL REQUIREMENTS Product category

Pricing example (e.g. ambient product) RSP ./. VAT 7% = Net RSP ./. Retail margin (trade expenses) 40% = NIV to trade ./. Advertising allowance/WKZ 5% = NSV to trade

Wine

€ 4,49 € 0,29 € 4,20 € 1,68 € 2,52 € 0,21 € 2,31

Net retail margin expected (private label -5-10%-pt.) 25-40% (port wine: 20-30%)

Olive oil

25-45%

Vinegar

20-40%

Spices

30-50%

Honey, jams, marmelades, spread

25-40%

Fruit and vegetable preserves

15-35%

Canned fish

20-35%

Ready meals frozen

12-26%

Confectionery (e.g. chocolate, cookies)

25-45%

Dried fruit

15-40%

Fresh fruit and vegetable

5-50% (wholesale/spot business)

Flowers

25-50% (wholesale/spot business)

Non food (hygiene products)

10-30%

Electronic household devices

35-55%

./. Sales organization (proprietary sales force vs. manufacturer/distributor) ./. Marketing activities (displays, trade promotion, advertising, etc.) ./. Excise duties (e.g. tobacco, coffee, beer, sparkling wine, spirits) ./. In- and outbound logistics ./. Packaging and Waste Disposal fees (e.g. „Grüner Punkt“/DSD, Interseroh) ./. Currency fluctuations = Price EXW GATES TO GERMAN RETAIL MARKET

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CHECKLIST FINANCIAL REQUIREMENTS (Hidden) costs apart from product calculation, partially recurring •

Production costs (staff, raw material, machinery, energy, etc.)

•

R&D/product development (recipe, packaging design, etc.)

•

QA (internal/external product analysis, specification sheets, audit costs, etc.)

•

Listing fees (exception discount/private label: net net net costing required)

•

Wastage costs (for products exceeding shelf life)

•

Samples

•

Market research/market data

•

Insurance rate and attorney fees

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AGENDA •

Basic data Germany

•

Basic data German retail trade • • • • • •

•

Overall market data Edeka Group Schwarz Group Rewe Group Aldi Metro

Gates to German retail market • • • • • •

Critical self-assessment Success factors marketing Success factors sales Checklist financial requirements Checklist logistical requirements Checklist legal requirements

•

Snapshot of Importhaus Wilms/Impuls

•

Recommendation

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CHECKLIST OF LOGISTICAL REQUIREMENTS Logistical requirements •

EAN barcode/GTIN (Global Trade Item Number)

•

EAN 128 (on pallets and outer cases)

•

Shipment on multi-trip wooden Euro pallets (1200 x 800 mm) required

•

Maximum pallet heights according to GS1 standard (www.gs1.com)

•

•

CCG 1: max. height 105 cm (incl. 15 cm pallet height)

•

CCG 2: max. height 160-195 cm (incl. 15 cm pallet height)

Capability to conduct EDI (transmission of data by electronic means)

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CHECKLIST OF LOGISTICAL REQUIREMENTS Logistical requirements •

•

Number of products per tray •

In line with established products/segment

•

The smaller the unit the better (greater chance of successful and wider distribution)

Best before date •

In line with market segment

•

Longer shelf-life preferred

•

Chilled product ranges in Germany not as developed as in other countries

•

„Ultra fresh“ virtually non-existent

•

German retail expects the supplier to take on wastage costs

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CHECKLIST OF LOGISTICAL REQUIREMENTS Logistical requirements •

Prerequisite: floor displays and secondary placements

•

Strong trend: shelf/infrastructure ready packaging

•

Discounters: mixed cases often required

•

Production capacities reflecting demand/seasonality

Source store photo: www.otto-kind.de

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AGENDA •

Basic data Germany

•

Basic data German retail trade • • • • • •

•

Overall market data Edeka Group Schwarz Group Rewe Group Aldi Metro

Gates to German retail market • • • • • •

Critical self-assessment Success factors marketing Success factors sales Checklist financial requirements Checklist logistical requirements Checklist legal requirements

•

Snapshot of Importhaus Wilms/Impuls

•

Recommendation

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CHECKLIST OF LEGAL REQUIREMENTS Legal requirements •

Brand registered to be marketed within European Union/Germany

•

Production process based on European/German law

•

European/German product declaration (esp. EU food information regulation 1169/2011) • • • • • • • • • • •

Ingredient list in German language Allergy advice (bold letters, etc.) Best before date (DD.MM.YYYY or MM.YYYY if a long shelf-life category; German language) Net weight and symbol „ “ (production process based on EU directive 76/211) Information on producer (address in EU) and importer/distributor (not mandatory) Origin of product Batch code for traceability Bar code reflecting the GTIN (Global Trade Item Number) Guidelines on preparation, usage and storage Nutritional facts Respect of EU regulation on nutrition and health claims made for foods

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CHECKLIST OF LEGAL REQUIREMENTS Legal requirements •

Registration at recycling company (e.g. DSD)

•

Registration at Deutsche Pfandsystem GmbH (DPG) if applicable (beverages)

•

Trade: certification IFS (favored) and BRC • • •

ISO and HACCP not sufficient IFS certification (www.ifs-certification.com) BRC global standard certification (www.brc.org.uk)

•

Trade: sustainability of production process (CO2 footprint, etc.)

•

Recommendation: checking of product quality/design by chemical analysis institute • •

SGS Institut Fresenius (www.institut-fresenius.de) Eurofins (www.eurofins.de)

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AGENDA •

Basic data Germany

•

Basic data German retail trade • • • • • •

•

Overall market data Edeka Group Schwarz Group Rewe Group Aldi Metro

Gates to German retail market • • • • • •

Critical self-assessment Success factors marketing Success factors sales Checklist financial requirements Checklist logistical requirements Checklist legal requirements

•

Snapshot of Importhaus Wilms/Impuls

•

Recommendation

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PROFILE We are the most efficient distribution platform for premium FMCG brands mainly in Germany. Our partners, either multinational companies or privately owned local/regional companies, are producing food and non-food products. We act as a problem solver: • For existing brands on the market we serve as an outsourcing platform • For others we open the door to German consumers

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FACTS

•

Founded in 1950 by Karl Heinz Wilms Part of Zertus Group since 1984 Focus on Germany Additional direct sales to Austria, Switzerland and Luxemburg Approx. 190 employees Own sales organization Own logistic center & warehouse

•

Member of

• • • • • •

Office located in Walluf (Frankfurt area) • Logistic center & warehouse located in Alzey (greater Frankfurt area) •

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ZERTUS GROUP: A COMPANY OF ENTREPRENEURS • • •

Established 1826, until today a family business Origin is the sugar refinery in Tangermünde Diversified group of food specialists: •

Germany´s leading marketer and distributor

•

Leader dextrose market in Germany and other European markets

•

Europe´s largest tinned candy manufacturer and leading manufacturer of promotional confectionary merchandise

•

Europe´s largest flat and formed wafers specialist (B2B)

•

One of UK‘s leading confectionary manufacturers (chocolate, dried fruits and nuts)

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BUSINESS ACTIVITIES BRAND OWNERS •

Being your organization in Germany Marketing Trade Marketing

Field Management Customer Service Supply Chain & Warehousing Quality Assurance Accountancy & IT

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CONSUMER

TRADE

BRAND OWNER

Key-Account-Management

KNOW-HOW

PRODUCT CATEGORY

Drugstores

Pharmacy Wholesalers

Confectionary

X

X

X

X

X

X

Snacks

X

X

X

X

X

Breakfast Products

X

X

X

X

Edible oil & vinegar

X

X

X

X

Condiment & sauces

X

X

X

X

Ethnic food

X

X

X

X

Health care

X

X

X

X

X

X

Personal care

X

X

X

X

X

X

Non food

X

X

X

X

X

SALES CHANEL

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Food Service

•

Cash & Carry

•

Convenience

•

Department stores

•

Coverage of all relevant sales channels and product categories Market leader position in many categories Sustainable customer business development Experienced marketing and sales team to tap market potential Relationship with brand owners based on trust, synergy and quality

Retail

•

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RELATIONSHIP & PERFORMANCE Affiliate brands 11 years

14 years

13 years

8 years

8 years

19 years

37 years

21 years

9 years

25 years

5 years

11 years

Distribution and licensing brands

20 years

50 years

26 years

5 years

10 years

11 years

Multinational partners

GATES TO GERMAN RETAIL MARKET

31 years

23 years

8 years 15 years

25 years

39 years

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5 years

WHY WILMS? Benefits manufacturer: •

• • • •

Focus on core countries/categories/channels/brands/ activities One of the biggest and strongest organizations in place Lean structures for quick decisions Cost efficiency Financial stability

GATES TO GERMAN RETAIL MARKET

Benefits retailer: • • • • •

Know-how to drive category growth Broad and complementary brand-portfolio Superior shelf-management and service Exceptional marketing activities and promotions Profitable business relationship

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AGENDA •

Basic data Germany

•

Basic data German retail trade • • • • • •

•

Overall market data Edeka Group Schwarz Group Rewe Group Aldi Metro

Gates to German retail market • • • • • •

Critical self-assessment Success factors marketing Success factors sales Checklist financial requirements Checklist logistical requirements Checklist legal requirements

•

Snapshot of Importhaus Wilms/Impuls

•

Recommendation

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RECOMMENDATION Your gates to German retail market •

Analyse your strengths and weaknesses

•

Envision your brand positioning (USP)

•

Conduct market research per target country (gap analysis: competition, price level, etc.)

•

Develop your own export strategy (countries, products, pricing, etc.)

•

Evaluate facts before contacting third parties/potential business partners

General rules to compete on the global market •

Be honest to yourself

•

Calibrate expectations to spend level

•

Realize a „win-(win)-win“ situation (trade – [importer/distributor] – you/manufacturer)

•

Allow yourself time to establish business

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Muito obrigado e boa sorte!

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