When retail giants Ahold and Delhaize came together in 2016, after years of will-they-won’t-they speculation, management was keen to promote the unified brand’s ‘Better Together’ strategy, where synergies in areas like services and logistics would lead to increased savings.
“To me, where there is a real benefit is [in] maximising how we can work together with our suppliers,” chief executive Dick Boer told ESM in its first issue of last year.
“It’s about asking whether a supplier that is already producing for the Belgian market can also supply efficiently for the Dutch market,” Boer continued.
Shared Strategy
Last week, the latest manifestation of this ‘shared’ strategy came to light with the announcement that Albert Heijn had launched a breakfast product, Crunchy Muesli, that was previously available in Delhaize stores in Belgium and Luxembourg.
The packaging of the two private labels is practically the same, except for the presence of an Albert Heijn/Delhaize logo at the top of the pack.
It’s not the first time that the retailers have shared products. Not long after the Ahold Delhaize deal was signed, Delhaize added a selection of products to its shelves in a trial campaign called ‘Onze Buren Hebben Goede Smaak’, or ‘Our Neighbours Have Good Taste’, while Albert Heijn returned the favour with its ‘Tastiest from Belgium’ range.
More recently, Albert Heijn’s Delicata confectionery range was ‘inspired’ by the quality chocolate range of its Belgian neighbour, while Delhaize stores feature a range of appetisers developed over the years by Albert Heijn.
In non-food, Ahold Delhaize’s Dutch-based health and beauty brand, Etos, recently introduced some of its products to stores in Belgium, the Czech Republic, Romania and Greece, enabling the group to expand its own-brand cosmetics channel.
In a statement last week, the group confirmed that it is looking to expand this private-label sharing policy yet further, saying, “Industry-wide own-brand products are gaining popularity, as customers seek more innovation in fresh or greater value for their money.
“From the US to Europe, our businesses are working more closely together to tap [into] this trend, to further strengthen their offerings and share knowledge on everything from packaging to customer preferences,” it continued.
Buying Strength
The idea of sharing private labels across territories is nothing new. After all, AMS Sourcing’s Euroshopper brand – an entry-level private label for the buying group’s members – has been around for a generation.
In boasting a geographical spread that encompasses 11 different markets, including its extensive operations in the US, Ahold Delhaize is essentially a buying group all of its own, with the ability to source certain product lines in more cost-effective territories and develop premium ranges in others.
In much the same way as the group is taking its operational findings to new markets – its Mega Image business recently announced plans to go online, and the banner can benefit from benchmarks set in Ahold Delhaize’s more mature markets – so its buying operation can now be more tactical going forward, as the synergy of the former Ahold and Delhaize buying teams nears completion.
This Wednesday, Ahold Delhaize publishes its Q4 and full-year sales figures, however, it’s arguably on the retailer’s shelves that the effect of its ‘Better Together’ strategy is most visible – one box of muesli at a time.
© 2018 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones. Click subscribe to sign up to ESM: The European Supermarket Magazine.
