Retail Logistics; Let Fresh Rule!

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1 Retail Logistics; Let Fresh Rule! April 10 th 2014, Joost Snels Surprise Wageningen UR Food & Biobased Research 1

2 Consumer trends: healthy Consumer trend: luxury life style Wageningen UR Food & Biobased Research 2

3 Consumer trends: new / exotic Consumer trends: convenience Wageningen UR Food & Biobased Research 3

4 Fresh rules: Consumer trends Consumer perception Fresh = tastier and healthier Fresh rules: retailer Best differentiator category for retailers Enabler of retailer profits Shift from dry, frozen, canned to fresh and convenient Wageningen UR Food & Biobased Research 4

5 Where do we buy our fresh food? Retail Meat 70% 73% - 75% 77% - Drinks/Soda 75% 70% - 73% 74% - Fresh Fruits & Vegetables 74% 76% - 76% 77% - Milk & Dairy 90% 88% - 92% 91% - Bread(products) & rusk 65% 65% - 64% 66% - Biscuits, cakes and pastries 60% 64% - 59% 58% - Tobacco 39% 42% 46% 48% 47% - Drugstore items 29% 29% 30% 30% 30% 30% Detergents and cleaning products 67% 67% - 67% 64% - Self-care and medicines 6% 8% 9% 9% 10% 10% Textiles and 2% 1% - 2% 2% - Newspapers & magazines 51% 49% - 42% 42% - Marktaandelen voor 2012 ontbreken helaas voor de meeste productgroepen. Naar verwachting volgen in 2014 wel cijfers over (Bijgewerkt 26 november 2013) Source: HBD, en CBS (tabak), IMS Health (zelfzorg) en Nielsen (drogisterijartikelen) Why retail focuses on Fresh? Growth Market share fresh retail still growing Fresh in total retail turnover still growing Source: GfK 2012 GfK Jaarcongres 2012 Vers September 2012 Wageningen UR Food & Biobased Research 5

6 Why retail focuses on Fresh? Traffic When the retailer has a bad fresh food section, this is a reason for me to shop anywhere else Yes 68% Source: GfK 2012 GfK Jaarcongres 2012 Vers September 2012 Why logistics? Enabler Optimal cost Wageningen UR Food & Biobased Research 6

7 Product: quality / Freshness Less important Average Important Quality / Freshness Source: GfK 2012 GfK Jaarcongres 2012 Vers September 2012 Quality / Freshness Quality score Coping with differences in quality Opslag en Transport Houdbaarheid Acceptatiegrens Acceptance level Time (days) Wageningen UR Food & Biobased Research 7

8 Logistics: temperature Arrival DC Arrival Store Departure Shelf Right time? Ready-to-eat Ready-to-eat tomorrow Ready-to-eat-dd:mm:2014 Ripe-on-arrival Ripe-on-dd:mm:2014 Ready-to-go Wageningen UR Food & Biobased Research 8

9 Product & Time Manipulating ripeness e t h y l e n e p r o d u c t i o n OFF ON time (days) C o l o r OFF ON time (days) Tomato Banana Avocado Supermarket within walking distance to most Dutch consumers Average number of other shops for groceries within 1 km., by neighborhood Optimal cost Average distance to supermarket, by province Wageningen UR Food & Biobased Research 9

10 Where do we find the supermarkets? Mostly within the city centre Central commercial area within cities or main shopping areas with more than 100 stores Neighborhood and community shopping centers, district centers and inner-city shopping Individual retail outlets, shopping centers on urban peripheries Source: ABN-AMRO Retaillocaties in De nieuwe winkelkaart van Nederland (2013) Inner city delivery Time frames One stop delivery Combined distribution Ambient Cooled Frozen Wageningen UR Food & Biobased Research 10

11 Multi channel / Online Pick-up points at the supermarkets Pick-up points other locations Home delivery Source: logistiek.nl Pick-up points The biggest challenge is in the range of fresh products. That's a total different story than dry groceries. Dat zie je ook aan de initiatieven die gestart en ook weer gestopt zijn. Alle business cases uit het verleden hebben we op onderdelen bekeken, maar door een totaal boodschappenassortiment, inclusief vers, aan te bieden zijn we wel uniek. I am confident that our products are fresher, because the products have a shorter lead time than at a regular grocery store. De voorraad in ons Order Pick Centrum (OPC) van Hollander in Barendrecht is minimaal en ingericht op de dagelijkse vraag van consumenten. In the supply chain is place for the supermarket where products lay often a few days on shelves where temperature changes", aldus Niemansverdriet. Wageningen UR Food & Biobased Research 11

12 Pick-up points The biggest challenge is in the range of fresh products. That's a total different story than dry groceries. Dat zie je ook aan de initiatieven die gestart en ook weer gestopt zijn. Alle business cases uit het verleden hebben we op onderdelen bekeken, maar door een totaal boodschappenassortiment, inclusief vers, aan te bieden zijn we wel uniek. I am confident that our products are fresher, because the products have a shorter lead time than at a regular grocery store. De voorraad in ons Order Pick Centrum (OPC) van Hollander in Barendrecht is minimaal en ingericht op de dagelijkse vraag van consumenten. In the supply chain is place for the supermarket where products lay often a few days on shelves where temperature changes", aldus Niemansverdriet. Multi channel Same principle at AH to gostores at railway stations and city centres. 0,40 1,50 2,50 Due to speed and responsivenessof the Albert Heijnlogistics chain they can sell super fresh sandwiches at an attractive margin at AH to Go Source: logistiek.nl Wageningen UR Food & Biobased Research 12

13 Wastage vs. Out-of-Stock Out-of-Stock Wastage Out-of-Stock Wastage Out-of-Stock Wastage Selective shoppers Consumer shops Last In First Out Actual stock Products on the shelf Wastage / Best-Before-Data as part of ordering policy According to administration After best-before-date check Wageningen UR Food & Biobased Research 13

14 AH kies & kook meals One of the main reasons why Albert Heijnis going to stop with selling the K & K concept is that it frequently occurs that one out of four ingredients is missing. Consequently, the whole sales concept does not work, said a spokesman for AH. Source: De Laatstemeter Kokkerellen Aviko Solution: Staple meal components together Wageningen UR Food & Biobased Research 14

15 Retail = Fresh = Logistics = Retail Retail Logistics; Let Fresh Rule! Fresh already rules, logistics has to enable this! Wageningen UR Food & Biobased Research 15

16 Thanks Logistics Retail Fresh Wageningen UR Food & Biobased Research 16

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