Retail

Emmanuel Langdorf, head of fruit and vegetables for Metro AG and Laurent Renard, trading office manager, provide a comprehensive overview of Metro Cash & Carry’s activities

Metro AG, also known as the Metro Group, is a leading international retail and wholesale company. The Düsseldorf- based group’s food activities consist of wholesale trade and hypermarkets. Metro Cash & Carry represents the largest and most international business in the group and is a leading player in self-service wholesale trade, active in 29 countries in Europe, Asia and Africa. 
Metro Cash & Carry’s main clients are hotels, restaurants, catering firms, independent retailers, service providers and public authorities.

City center locations and delivery services
Our sales lines offer customised assortments and services and are excellent value for money. This offer is complemented by innovative solutions as retail concepts and professional services to optimally support professional customers in their respective business.
The Metro Cash & Carry sales concept is flexible and adapts to meet specific evolutions, conditions and needs of the respective countries. The format of our stores varies significantly, with an assortment depth from 2,500 m2 to 16,000 m2. In addition, Metro Cash & Carry has introduced new sales formats to take into account differing customer specifications. For example, the wholesale company in Poland (under the brand Makro) offers a new store format called Makro Punkt. Targeting the needs of small independent retailers, the stores under Makro Punkt primarily offer beverages, tinned foods, dairy products and fruit and vegetables – exactly those products that a kiosk or small grocery store needs. Meanwhile, Odido is a retail-franchise concept initiated by Makro Poland. These stores are run by private owners.  Small traders who choose to enter Odido’s franchise programme have the opportunity to grow their competitiveness in the market. Makro Cash & Carry Poland supports small independent shops with advice and marketing tools. In return, these retailers agree to include a number of Makro’s own branded goods in their stores. In addition, discounts are available if goods are purchased from Makro’s wholesale stores. Shop owners keep their financial and managerial independence throughout the entire process of the programme. Independent traders – particularly those in emerging markets- are important to Metro Cash & Carry. For this group, our sales lines have been tailored towards trader support programmes to help them modernise and make their business completely professional. Together with the customer, specific store parameters are assessed and measures are pinpointed in term of assortment and layout. We also develop special formats for city centre locations. These have already been successfully introduced in Paris, France, in addition to Madrid, Spain and Italy, Rome. These stores have a selling space of up to 3,000 m2 and address the needs of hotels, restaurants and catering firms, offering primarily fresh foods. Thanks to central downtown locations, Metro France can shorten trips made by customers and contribute towards improving the quality and freshness of the fresh produce offered. Another major development within Metro Cash & Carry is the development of the delivery service. This option has become an integral part of the service and is creating value for customers as it saves them time. Professional customers can quickly place their individual orders by e-mail, fax or telephone and the delivery service guarantees that customers consistently receive high quality fresh fruit and vegetables. Our logistics organisation ensures the cold chain is unbroken and that the principles of HACCP, the internationally recognised quality assurance certification, are adhered to.

Strong emphasis on local producers
As an international retailer, we have considerable strengths. These strengths benefit not only our customers but also the community as we believe growth is created in the regional economy and that we play a significant role in improving the quality of life in these areas.
Indeed, our stores and buying organisations in the 29 Metro Cash & Carry countries secure local supply, create and expand supplier relationships. The fruit and vegetable category is a prime example of this. The ‘De ale Nostre’ programme in Metro Romania supports and offers local products to our customers. The local organization has implemented a specific programme with growers, mainly in vegetable sourcing areas in the country, and provides growers technical support and marketing pointers to better serve the needs of Romanian customers.  Metro Cash & Carry emphasises local products: in general up to 70 per cent of our assortment is purchased from local producers and providers. But local does not mean excluding global!

200,000 tons delivered by the International Trading Office
Metro Cash & Carry is more international than any other Metro Group sales group. It operates on three continents and faces different opportunities in each market. A new global sourcing strategy has been created to identify specific customer needs and exploit market potential.  The international trading office concept was created in 2009 to source and procure fruit and vegetables. Located in Valencia, Spain , the newly created organisation aims to support the group in :
• Developing competence and innovative products for customers
• Increasing quality and freshness of products by shortening the length of product marketing
• Creating synergies and meeting Metro Group’s needs on Mediterranean assortment, overseas products and processed fruit and vegetables
• Developing direct sourcing with growers and suppliers in certain areas based on long term and transparent relationships.
The Valencia trading office accounts for 200,000 tonnes of the volume generated in 2013 by the Metro Group. There are regular deliveries to more than 20 countries where Metro operates. Thanks to the collaboration of the group’s buying organisations, this figure is on track to double within 3-5 years. It is a competitive business but the Valencia trading office focuses on nurturing transparent and progressive relationships and initiatives to increase its percentages of sourcing fruit and vegetables. Sourcing activities are focused on Spain, Morocco, Italy, Greece and Turkey for products such as citrus, tomatoes, vegetables and summer fruits. Other core selected countries are used to source  overseas specialties or dry fruit.

Social and ecological objectives too
Sustainability has many facets. A range of activities and cooperative partnerships are needed, as well as the commitment of each individual who can contribute to achieving predefined milestones. Our commitment is not an end in itself. We always consider social and ecological factors alongside our economic objectives. Metro has developed a group- wide sustainability vision. This provides all employees, not just the fresh produce team, with a solid starting point and framework and starting. The Valencia international trading office aims to provide safe, quality products, implementing HACCP but also using other procedures related to the sourcing of products. These include product specification to elicit technical information about product compliance with safety and legislative requirements, and compositional and packaging information. It forms part of the binding agreement between Metro and the fresh produce providers and ensures clarity and transparency in these transactions.  
Efficient procurement structures, bundling volumes and efficient transport in well-organised logistical chains also reduce the amount of energy required during the various stages of the supply chain. 
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The solution developed in partnership with the distributors is eating-ripe fruit

“The decline in European fruit and vegetable consumption is a real paradox in view of the consumers’ increasing need for healthier products”, exclaimed Francis Kint, the managing director of UNIVEG Group. This observation is all the more bitter because fresh fruit and vegetables constitute a significantly more sustainable value chain than other food products. “The first thing we have to do is to guarantee a positive eating experience”, he warned. For this reason, UNIVEG has staked a lot on offering its customers pre-ripened “ready to eat” fruit. “We are the largest European fruit and vegetable ripener and can now use this infrastructure to expand our range of ripened products”, he pointed out. UNIVEG ripens nearly 500,000 crates a week of bananas and tropical fruits, approximately 10% of the fruit ripened in Europe according to the group’s estimates. It is the unchallenged leader in Germany and also has its own ripening facilities in Britain, Austria, Spain, France, Italy, the Netherlands and Poland. UNIVEG Katopé UK and Bakker Barendrecht were the first in their respective markets to ripen stone fruit and tropical fruit (largely mangoes and avocados). Each of the group’s subsidiaries has made major technological investments. “Facilities for avocados and mangoes constitute 20% of our total ripening capacity”, explained Francis. On the strength of this achievement, UNIVEG’s eating-ripe tropical fruit clients have more than doubled in 2013, with Germany accounting for 25% to 30% by volume. The group is also increasing its undertakings to farmers and last month announced the renewal of 2000 ha of banana contracts in Suriname following the privatisation of the state-owned farms. The UNIVEG group has around 9000 ha of its own crops, including 3000 ha of apples and pears in Argentina and avocados, apples, pears, grapes and citrus fruit in South Africa “We have sourcing teams in all the main growing countries worldwide. Our latest location is Colombia”.  The group is also pursuing the expansion of its distribution network, particularly in the United Kingdom, where at the end of January it acquired the third-largest pear and apple importer, Empire World Trade, a neighbour of its subsidiary UNIVEG Katopé UK. “We will continue to move forwards in the UK market and achieve our strategic objective of becoming one of the top five British importers”, revealed Francis.
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Starting from a single supermarket in the UAE in 1982, the Al Maya Group has become one of the the Middle East’s leading supermarket chains. Today it has 33 supermarkets and hypermarkets in the UAE, as well as 5 supermarkets in the Sultanate of Oman. “We continue to expand and plan to open 12 new stores in Dubai, Abu Dhabi and Al Ain this year,” said Kamal Vachani, the chain’s managing director. Current Al Maya shop formats are very diverse, ranging from 3000 to 50,000 square feet. “A new design and concept is being implemented in all our stores,” he said.  Headquartered in the UAE, the Al Maya Group has strengthened its regional presence across Oman, Bahrain, Kuwait and Qatar in the past two decades. The group has also been fortifying its global spread with stores in India and the UK. Its successful strategy has been to maintain high quality standards of fresh food supplies all season and covering 97% of the market, with formats ranging from small grocery stores to large hypermarkets. Fruit is the top-selling category in fresh produce. Apples and pears come first and represent 9.44% of turnover, second are bananas with 8.66%, then exotics with 6.46% and citrus with 6.03%. “We deal direct with most of the leadings suppliers of fresh produce around the globe, in order to provide our valued customers with the best quality.” Taking the apple category as an example, 45% of Royal Galas come from New Zealand, 40% from France, and 15% from Chile, Spain and Brazil. Red Delicious mainly come from the US (60%), France (25%), and Chile and Spain (15%). About 45% of the Granny Smith apples are from France, 15% from Spain, 15% from the US, and the rest from South Africa, Chile and New Zealand. The US supplies 35% of Goldens, France 25%, and Chile, Spain and South Africa the rest. As for pears, we handle D’Anjou (60% from the US and 30% from South Africa), Forelle (60% from South Africa), as well as Packhams from South Africa and Ya Pears from China.  Tomatoes are the top vegetable item, representing 8% of total fresh produce sales. A third of its volumes comes from Jordan, 25% from Oman, 12% from India and 5% each from Egypt, Malaysia and Holland. Potatoes make up 6% of fresh produce sales. About 30% come from Lebanon, 20% from Jordan, 10% from Egypt, and also some from China, India, Pakistan and Bangladesh. “Our organic product sales achieve their margins and are tending to improve, forming about 2% of total fresh produce sales this year.” Local organic farms are developing new growing technologies like hydroponics and making more products available on the market. With the largest distribution centre in the UAE, the Al Maya Group holds the sole GCC rights to distribute a spectacular variety of FMCG products across the region. This ranges from foodstuffs to apparel and luxurious salon treatments. All brands are completely synonymous with the Al Maya Group vision of high quality standards. BS

Premium supermarket chains like Spinneys have opened 50% more shops and are investing in new logistics operations

Spinneys’ CEO Jannie Holtzhausen confirms a 15% annual sales increase and the continuous expansion of the chain in the Gulf. Spinneys stores have increased from 40 to 66 units over the last 3 years, with formats of 10,000-40,000 square feet. The chain also includes a few convenience formats between 2,500 and 4,000m2. Its estimated food retail market share in the UAE is between 7 and 8%. 
“Due to our strong focus on fresh produce, our sales of fruit and vegetables have grown 17%, above the average for the other food categories,” Holtzhausen highlighted. The pre-packing of specific categories has helped stimulate sales, particularly for berries, cherries and grapes.  “The growing interest in healthy habits is helping boost fruit and vegetable sales in all consumer categories,” Holtzhausen said. This global trend of increased health consciousness is also seen in the GCC countries, inducing consumers there to buy fresh rather than processed products. When asked about Spinneys’ approach of customer profiling, Holtzhausen said it preferred to focus on stores and categories to improve sales and performance as: “We manage products, not customers”.

“Ready-to-cook” vegetables successful
The chain has successfully developed a full line of pre-cut, “ready-to-cook” vegetables over the last 4 years which now has more than 15 items. Among the popular ones are baby potatoes (microwavable), cut beans, baby cabbage, squash, peppers and mixed vegetables. Each item comes in two sizes: smaller packages for individuals and larger formats for families. The microwavable potatoes product has become the most successful, due to its convenience, and enjoyable taste and firm skin on eating. “Surprisingly, the smaller and baby potatoes outperform the standard potato line in the medium and higher consumer segment,” Holtzhausen pointed out.
“But pre-cut fruits are now our fastest growing range,” he said. Most of the items are made at the farm and sourced from various African countries (Tanzania, Kenya, Senegal and Zimbabwe). Holland remains the main supplier for vegetables though in general its origins have become more diversified. 
Berries continue to enjoy strong sales. Strawberries and blueberries dominate but a full assortment is offered. About two thirds are sourced from North and South America, 25% from Europe (still very seasonal), and some also from Australia and New Zealand. “We believe the most successful suppliers will be Egypt and Peru,” Holtzhausen predicted. Lettuces come mainly from Europe (85% from Spain and Holland), with still only 5% from Africa. “We hope Africa, being closer, will become a major supplier of lettuce as it has a more predictable climate and better political milieu.”

Tasty, Fresh and Healthy
“We have a quite large team of 10 food scientists, looking closely at our suppliers with regular audits at their farms and packing houses, particularly for fresh cuts items.” GlobalGAP protocol is required as much as possible. US and European items are naturally all certified, the other origins are audited by Spinneys’ own quality managers.
Logistics is an essential part of the a total control of the foodchain. Over a third of fruit and vegetables are directly imported and most are stored and handled within Spinneys’ own facilities. The group is now busy constructing a new logistics centre for dry, frozen and chilled products which will be located in Kizard, Abu Dhabi. “Our plan for the next three years is to continue to expand as fast as the economy will allow,” Holtzhausen said.
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