Online food retail. A game changer for the bakery sector

Transcription

1 Online food retail A game changer for the bakery sector Cyrille Filott Global Strategist Consumer Foods Athens, 6 June 2015

2 Rabobank Global F&A bank 48 countries 18 international desks 1,100 offices 60,000 staff Calgary Chicago Toronto Cedar Falls San Francisco New York St Louis Washington DC El Centro Atlanta Dallas Mexico City Amsterdam Moscow Utrecht Dublin Warsaw London Antwerp Frankfurt Paris Madrid Milan Istanbul Delhi Mumbai Shanghai Beijing Hong Kong Tokyo Willemstad Kuala Lumpur Singapore Lubuan Jakarta Sao Paulo Santiago de Chile Buenos Aires Perth Melbourne Sydney Tasmania Wellington 2

3 Food & Agri Research Global research platform and local knowledge provide an in-depth network and understanding of the Food & Agri (sub-) sectors Over 90 dedicated research professionals across 20 offices globally, covering 11 sub-sectors. Fundamental research covering the entire F&A chain and a wide array of topics ranging from macro themes, impacting a particular F&A industry, to microlevel analysis of individual companies All relevant topics in each sector are monitored from a local, regional and global perspective Farm input Companies Farmers Trading Processing Food retail Commodity prices Bakery

4 Setting the scene Online food retail a new(-ish) channel 4

5 What is this? Source: Kantar Retail at CAGE

6 What are these 934 products? Source: Ocado, Rabobank

7 Online food sales grow very fast In France and UK 4.5-5% of food sales go online 8% for leading UK retailers EUR 2 bln at Auchan in France Number of pick up points in France Rabobank forecasts online grocery to grow to 15-25% share by 2030 Source: Olivier Dauvers, Rabobank

8 Impact of online food retail on food producers A true game changer 8

9 Online is a game changer! Supermarkets: brands, marketing, etc. Hard discount: private label, costs, etc. Online grocery: fewer/smaller stores with less variety/stocks, screen position, alternative distribution Companies need to rethink: - Assortment - Marketing - Supply chain 9

10 Again: 934 items! Source: Ocado, Rabobank

11 Assortment more SKU s! Unlimited space in fulfillment centers Ocado offers > food items with minimal listing requirements Store Picking Pickers do 80 items/hr Store assortment Dark Store 250 items/hr Assortment varies, often less than typical store Semi-auto Warehouse Various pick speeds of up to /hr In principle unlimited assortment 11

12 Marketing loyalty to retailers and products Source: Ocado Oct

13 Marketing shelves! Logo Ranking Competition Private Label 13

14 Marketing branding: lessons from Ocado Having your product on top of (search) pages means you will sell Negative growth while Ocado grows 15%! Source: Ocado Oct 2014

15 Supply chain power to the consumer! 15

16 Supply chain logistics change, but how? Stocks At the retailer How much stock? Who owns the stock? Made to order Big success in meat Flexibility Weather changes: different offering! Current events Packaging sizes Delivery times Amazon delivers within the hour in Manhattan At the supplier Just in time delivery for fresh products? Smaller batches, but more frequent? Flexible production lines? Increase in product innovation More working capital? Or less? Production next to the distribution centre? 16

17 Implications increased complexity 17

18 The deltas for bakery Implications differ per category shelf life is a key factor 18

19 Bread & Pastry under-index online Impulse buying! Impulse buying? 19

20 Fresh available online; but will it sell? Source: ELeclerc 20

21 Fresh The return of the artisanal baker!...or not... Source: Eleclerc 21

22 Short shelf life share of screen matters Source: Tesco 22

23 Long shelf life frozen! Frozen as a category over-indexes by 50% Constraint is no longer defrosting on the way home but the size of the freezer (and online is used for weekly shopping!) Substitute for modified atmosphere packaging (?) Source: Sainsbury s 23

24 Wrap up have a think (please!) Assortment On-screen visibility Formulations Brand /logo recognition Substitution Ranking Reviews More SKUs/ long tail NPD Auto-fill Freshness Packaging size Pricing strategy Private Label/Store Brands Regional products Cross-selling Loss leaders Marketing Demographics Impulse Basket size Over-index/under-index Filters Share of screen Category captain Profiling Price blurring Digital coupons Listing fees Support new entrants Consumer tracking Profiling Benchmark Big data vs. privacy Supply Chain Complexity IT investments Working capital Forecast data Logistic costs Production costs Production runs Delivery times Shrinkage Listing fees Packaging standards Recalls Direct to consumer Market places Alternative channels/platforms Shopping lists Fulfillment 24

25 Thank 25