in-company project vlerick 2011-2012
TRANSCRIPT
Creating added value for the Belgian
based retail customers of LU-Belgium in
order to build stronger and future proof
margins
TABLE
OF
CONTEN
T- Methodology
- Industry analysis
- Recommendations LU & LU retail customers
1. Quality
2. In-store experience
3. New product development
4. Pricing
5. Categorisation
6. Competitiveness LU7. Summary
IN-D
EP
TH
IN
TE
RV
IEW
S
12IN-STOREAUDITS
5INTERVIEWSRESPONSIBLE
ISB
3EXPERTINTERVIEWS
METHODOLOG
Y
RESPONDENTS
INDUSTRY ANALYSIS
STRENGHTS
WEAKNESSES
OPPORTUNITIES
THREATS
SWOTSTRENGHTS
A. Predictability of the
category
B. Optimal freshness
C. Bread scent
SWOTWEAKNESSES
A. Wages
B. Investment & costs
SWOTOPPORTUNITIES
A. QUALITY INCREASE RETAIL
- Last 10 years
- Changing perceptions
Quality holding back growth
SWOTOPPORTUNITIES
B. #OF WARM BAKERIES
- 32% drop (1994 – 2011)
- Trouble finding artisan bakers
- 7% bake-off bread
- 37% bake-off viennoiserie
Launch of independent bakery chain
SWOTOPPORTUNITIES
C. ISB-GROWTH
- Colruyt, Lidl, Aldi, Albert Heijn
D. CHILLED BAKE-OFF VIENNOISERIE
- Invest in R&D
SWOTTHREATS
A. DIFFERENTIATING CHARACTER
B. BRANDING NOT POSSIBLE
- Carrefour, Albert Heijn
- F2
C. D-S RELATIONSHIP
INVEST in
TIMESAVINGS
R&D for(CHILLED)
BAKE-OFFVIENNOISERIE
INDEPENDENT
CHAIN
LAUNCH
BAKERY
12
3
QUALITY
QUALITY
TASTE
FRESHNESS
LOOK
SCENT
QUALITYTASTE- BDB: 90% chilled bake-off
- Gira 2010
- Even low-end players (polarisation)
- Taste as purchase criterion
0
10
20
30
40
50
60
70
80
Baguettes local bakery Viennoiserie local bakery
0
10
20
30
40
50
60
70
80
Baguettes supermarket Viennoiserie supermarketn = 49 n = 22n = 100n = 51
QUALITYTASTE- 80% of viennoiserie @ local bakery
- In line with in-depth interviews
- Cherry picking
64.8
5056.2
80
0%
20%
40%
60%
80%
100%
Breads Baguettes Bread rolls Viennoiserie
Other
Carrefour
Delhaize
Local Bakery
n = 162 n = 102 n = 162 n = 125
QUALITYTASTE
QUALITYIMPROVEMENTVIENNOISERIE
QUALITYFRESHNESS- ‘Daily Fresh Bread’
- Carrefour Hyper / Planet
0
10
20
30
40
50
60
70
80
Baguettes local bakery Viennoiserie local bakery
0
10
20
30
40
50
60
70
80
Baguettes supermarket Viennoiserie supermarket
n = 49 n = 22n = 100n = 51
QUALITYFRESHNESS- ‘Daily Fresh Bread’
- Carrefour Hyper / Planet
- Freshness on product level
22%
42%
16%
15%
5%
Totally agree
Rather agree
Neutral
Rather disagree
Totally disagree
Interest in the indication of baking hours?
n = 108
QUALITYFRESHNESS
6%
37%
45%
12%
Homemade
Freshly delivered by
an industrial bakery
Frozen delivered by
an industrial bakery
No idea
Perceived baking method ISB Baguettes
n = 240
QUALITYFRESHNESS- Independent samples t-tests
Consumers VS non-consumers
Purchasers VS non-purchasers
Local Bakery VS retail purchasers
No significant differences
QUALITYFRESHNESS
4%
40%
43%
13%
Homemade
Freshly delivered by
an industrial bakery
Frozen delivered by
an industrial bakery
No idea
Perceived baking method ISB viennoiserie
n = 240
QUALITYFRESHNESS- Independent samples t-tests
Consumers VS non-consumers
Purchasers VS non-purchasers
Local bakery VS retail purchasers
People that do not purchase
viennoiserie in retail more often hold the
perception that ISB-viennoiserie is
homemade compared to purchasers.
QUALITYFRESHNESS
INTRODUCEFRESHNESSINDICATOR5
LOOKQUALITY
LOOKQUALITY
- Cause: Personnel
- Consistency is key
29%
49%
15%
6% 1%
Totally agree
Rather agree
Neutral
Rather disagree
Totally disagree
Do you find product consistency important?
n = 241
LOOKQUALITY
- Packaging influences look
Observation:
Bag not always next to product
F2 users paper bags
In-depth interviews: duality in responses bread bag OK but to large
plastic viennoiserie bag OK
for non-sticky viennoiserie
LOOKBLISTERSTHAT CAN
BEFILLED
BYSHOPPER
S
MOTIVATEPERSONNEL
BREAD BAG
WITHWINDOW78
LOOK
SAFEGUARD
BAKINGCONSISTENCY
THINK TWICE
ABOUTMULTIPACKS9
10
EXPERIENCE
Product availability
Use of grippers
Interior
Self-scanning Baking hours
Recipes on packaging
Product information
Bread scentReservation of bread products
IN-STORE EXPERIENCE
Product availability
Use of grippers
Interior
Self-scanning Baking hours
Recipes on packaging
Product information
Bread scentReservation of bread products
IN-STORE EXPERIENCE
INTERIO
R
EXPERIENCE
- Neutral to negative perception
- Revamp of Carrefour Planet
- Independent samples t-test
comparison of interior
attractiveness retail / local bakery
People find the interior of local
bakeries more attractive
INTERIO
R
EXPERIENCE
INTERIO
R
EXPERIENCE
INTERIO
R
EXPERIENCE
INTERIO
R
EXPERIENCE
SPECIALIST
BAKERYLOOK
Product availability
Use of grippers
Interior
Self-scanning Baking hours
Recipes on packaging
Product information
Bread scentReservation of bread products
IN-STORE EXPERIENCE
Negative health perception (dieting)
Stress benefits of bread products (except viennoiserie)
Nutritional value versus cereals
Fiber
Energy supplier
Faster saturation
PRODUCT
INFORMATION
EXPERIENCE
PRODUCT
INFORMATION- VS local bakery:
lower degree of social interaction
EXPERIENCE
PRODUCT
INFORMATION
- Appreciation of extra product information
Ingredients (allergies)
Baking method
Origin
EXPERIENCE
26%
43%
24%
5% 2%
n = 107
PRODUCT
INFORMATION
EXPERIENCE
DISPLAYPRODUCTINFORMATION12
Product availability
Use of grippers
Interior
Self-scanning Baking hours
Recipes on packaging
Product information
Bread scentReservation of bread products
IN-STORE EXPERIENCE
- Bread odour = No. 1
- Stimulation of impulse purchase
- Enhance freshness perception
- Biggest reminiscent sense power
82%
13%
3% 1%1%
BREAD
SCENT
EXPERIENCE
n = 241
0.00 20.00 40.00 60.00
Totally disagree
Rather disagree
Neutral
Rather agree
Totally agree
Local bakery
Supermarket
… But bread scent is less present in retail
n = 154
n = 109
BREAD
SCENT
EXPERIENCE
HOW
- Bread scent diffusers
- One oven in the middle of the ISB department
- Ventilation system which transfers bread scent
- Add scent to the bread packaging
BREAD
SCENT
EXPERIENCE
STRONGERBREAD SCENT
IN ISB13
Product availability
Use of grippers
Interior
Self-scanning Baking hours
Recipes on packaging
Product information
Bread scentReservation of bread products
IN-STORE EXPERIENCE
Product availability
Use of grippers
Interior
Self-scanning Baking hours
Recipes on packaging
Product information
Bread scentReservation of bread products
IN-STORE EXPERIENCE
PRODUCT
AVAILABILITY
- Respond to the more demanding shoppers:
Bake-off flexibility
In-store audits: some take advantage of bake-off
High labour cost
- In-depth interviews:
Neutral to annoying if no product availability
EXPERIENCE
PRODUCT
AVAILABILITY
Lack of bread availability is most annoying (84%)
EXPERIENCE
0 10 20 30 40 50 60 70 80 90
Bread
Baguette
Viennoiserie
Yes
Neutral
No
n = 185
Planning of baguette and viennoiserie purchases
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
No
Neutral
Yes
Local bakery
Supermarket
n = 109
PRODUCT
AVAILABILITY
EXPERIENCE
PRODUCT
AVAILABILITY
EXPERIENCE
GUARANTEED
OFFERPRODUCT
Product availability
Use of grippers
Interior
Self-scanning Baking hours
Recipes on packaging
Product information
Bread scentReservation of bread products
IN-STORE EXPERIENCE
RECIPES ON
PACKAGING- Spotted at local bakeries
- Increase packaging attractiveness
- Possibility for cross-promotions
13%
35%
33%
13%
6%
n = 106
EXPERIENCE
RECIPES ON
PACKAGING
EXPERIENCE
INTRODUCEPACKAGING
RECIPES15
Product availability
Use of grippers
Interior
Self-scanning Baking hours
Recipes on packaging
Product information
Bread scentReservation of bread products
IN-STORE EXPERIENCE
- Successfully launched
- In-store audits
Failures to recognize bar codes: printing quality
Lack of bar codes
- Self-payment issue Delhaize
Condition 1: only purchase non-barcoded goods
Condition 2: no loyalty card
Inconvenient screen overview when solved
SELF
SCANNINGEXPERIENCE
SELF
SCANNINGEXPERIENCE
Shoppers only buying bread products
when visiting supermarkets
1%
25%
21%
53%
Daily
Weekly
Monthly
Less than monthly/Never
n = 109
- Better structure of the selection screens for bread products
- Updated picture catalogue
- Quality printers at each retailer- Check barcode availability
SELF
SCANNINGEXPERIENCE
IMPROVE
SELFSCANNING16
Product availability
Use of grippers
Interior
Self-scanning Baking hours
Recipes on packaging
Product information
Bread scentReservation of bread products
IN-STORE EXPERIENCE
- In-store audits: no usage or struggling
- In-depth interviews: 2 extremes in opinion
- Survey: no usage for bread rolls
45%
11%
44%
Both viennoiserie and buns
Unused
Only for viennoiserie
Only for buns
n = 18
GRIPPERSEXPERIENCE
GRIPPERSEXPERIENCE
- No abolishment
- Increase usability:
Hole in the packaging and hook at each shelf
Gripper with rubberized handle
- Increase hygiene: cleaning on a daily basis- Look outside of the gripper-box:
Primary shoppers Delhaize and Carrefour: pensioners
IMPROVINGGRIPPERS17
Product availability
Use of grippers
Interior
Self-scanning Baking hours
Recipes on packaging
Product information
Bread scentReservation of bread products
IN-STORE EXPERIENCE
- Spotted at local bakeries and Panos
- No interest from interviewees
Difficult to mention pick-up time
Importance of autonomy
3% 5%
13%
37%
42%
n = 108
RESERVATIONSEXPERIENCE
NPD
NPD
VARIETY NEED
HEALTH
CHILDREN
SPECALITIES
NEED
VARIETY
NEED
NPD
12%
46%
23%
17%
2%
Totally agree
Rather agree
Neutral
Rather
disagree
I like to try out new products
n = 237
NPD
0%
10%
20%
30%
% of non consumers
wanting more variety
% of consumers
wanting more variety
For which products do you want
more variety?
VARIETY
NEED
n = 141
NPD
- Variety from a retail point of view
Baking instruction
PLU-number
Logistical adaptation
Low levels of in-store testing of new ISB-products
Monthly variation not possible
VARIETY
NEED
NPDVARIETY
NEEDINTRODUCE
MOREVARIETY
18
HEALTHNPD
0% 20% 40% 60% 80% 100%
Bread
Bread rolls
None
Baguette
Viennoiserie
Importance of health
when buying products
n = 241
HEALTHNPD
- White whole grain bread
incredible for Belgian market
- Increase in the number of food allergies
- In-store personnel indicates growing demand for
functional bread products
HEALTHNPD
FUNCTIONAL
NPDR&D
CHILDRE
N
NPD
- In-depth interviews indicate
children have an influence on ISB-
purchase behavior.
In 2004, $330 billion was spend due to pester
Power (children 4-12)
Introduction of cute looking ISB-products
CHILDRE
N
NPD
20
SPECIALTIESNPD
- Puratos study Canada
- Confirmed by in-depth interviews
‘Vlaaienkoek’
‘Klaaskoek’
- Conversation BDB: 300 local products
SPECIALTIESNPD
INTRODUCESIGNATUREPRODUCTS21
BAGUETTENPD
0 5 10 15 20 25 30 35 40 45 50
Fresh pannini roll
Baguette with tigerdecoration
Soft whole-wheat or multigrain …
One person bread
Roll with Provencal herbs
Baguette with dried tomatoes …
Ciabatta with real olive oil
% top-two box answers % top-box answers
n = 241
Purchase intention bread products?
12 3
1. Ciabatta2. Dried tomato basil
3. One person bread22
BAGUETTE
One-person bread Singles, students
Baguette with dried tomatoes and basil Students, HH with kids
Ciabatta with real olive oil Students, singles, HH w kids
Roll with Provencal herbs Students
Custom tables:
Significant difference between
shopper demographics and purchase intentions:
VIENNOISERI
E
0 5 10 15 20 25 30 35 40 45 50
Viennoiserie with lemon
Viennoiserie with gingerbread
Viennoiserie with creme brulee
Viennoiserie with caramel
Viennoiserie with orange/chocolate
Viennoiserie with honey
Viennoiserie with strawberry jam
Viennoiserie with banana
Viennoiserie with raspberry jam
Croissant with yellow pudding
Viennoiserie with apple-cinnamon
Chocolate viennoiserie with white …
Croissant with richer butter taste
Chocolate viennoiserie with more …
% top-two box answers % top-box answers
Purchase intention viennoiserie?
12 3
1. With more
chocolate2. Richer butter taste
3. White chocolate23
VIENNOISERI
E
With more chocolate Singles, students, HH with kids
With richer butter taste Students and HH with kids
With white chocolate Singles, Students, HH with kids
Custom tables:
Significant difference between shopper
demographics and purchase intentions :
PRICE
- Polarisation of the market; Economic downturn
- Retail price adjustments according to the competition:
Colruyt no viennoiserie
- Puratos: price is no purchase criterion
≈ survey
cherry-picking
- In-depth interviews:
Not price-conscious, only in local bakery
Conscious of price differences
Logic if price differences within viennoiserie
PRICING
Higher willingness to pay for filled viennoiserie
14%
44%
29%
6%7% 14%
51%
25%
9% 1%
Filled viennoiserie is worth
more than non-filled
Logic if price difference
within viennoiserien = 71
PRICING
PRICING
… But does retailer want to increase price level?
- Retailer perspective:
Operational difficulties
Problem at cashier
Cross-promotional issue
Hard but feasible (BDB)
Requirement: quality increase
PRICING
PRICINGPRICING
VIENNOISERIE
INTRODUCE DIFFERENT
PRICES24
CATEGORISATI
ON
CATEGORISATION
- Retailer perspective Shopper perspective
- Puratos study: remodeling Wallmart ISB
- In-depth interviews:
Choice overload
Variety needMere categorisation effect
- ISB responsible people:
Undetailed planograms, both in F1 and F2
Gut feel or randomly chosen structure
CATEGORISATION
- Independent samples t-test:
People believe that the clarity of the product
offer is significantly lower in retail.
- Product labeling: sometimes unclear or wrong
- Need for better categorisation of the ISB offer
BREA
D
WHITE BROW
N
GRAIN
S
BASIC SPECIAL
BAGUETT
ES
BASIC
WHITE BROWN/GRAIN
S
HALF
SPECIAL
HERBS CIABATT
A
OTHER
BAGUETT
ES
BREAD ROLLS
SHAPE
BASIC
SPECIAL
BREAD ROLLS
SHAPE
VIENNOISERIE
INGREDIENT
MINIPUDDINGRAISINSCHOCOLATEBUTTER
BASIC
VIENNOISER
IE
INGREDIENTSPECIAL
FRUITS OTHER
SPECIAL
SWEETS
CATEGORISATION
PRESENTLOGICALSUBCATEGORIES25
LU
COMPETITIVENESS
COMPETITIVE
POSITION LU
00% 10% 20% 30% 40% 50% 60%
Viennoiserie
Bread loaves
Baguettes
Bread rolls
CARREFOUR
00% 10% 20% 30% 40% 50% 60%
Viennoiserie
Bread loaves
Baguettes
Bread rolls
INTERMARCHE
00% 10% 20% 30% 40% 50% 60%
Viennoiserie
Bread
Baguettes
Bread rolls
% sales LU per bread product to Delhaize Actual shelf space Delhaize
DELHAIZE
SUMMARY
23