June 8, 2017

Talk with European retailer buying alliance AMS

Mum's the word (photo: Jeremia Muench/Fotolia)
Retailer buying alliances are often a nightmare for journalists. Their executives are even more secretive than discounters and inhabit a cloak-and-dagger world that would appeal to Zorro. They only seem to meet behind closed doors or in airport lounges. It is virtually impossible to obtain their photo.

You can never phone them directly. If calls are returned at all, it is via their assistants at HQ so that no inference can be made as to their location. If one writes, at best one will receive a few sibylline words within a cryptic email which pose more questions than they answer. Surprisingly, the MD of one buying alliance agreed to connect on LinkedIn, only to delete the connection when asked a question.

Given the penchant for secrecy within his peer group, one can only thank Bert Swartsenburg, Managing Director of AMS-Sourcing, for a brief update on the activities of this major European buying group. He weighs his words carefully, but this is a manager who has not forgotten the art of communication.

AMS-Sourcing logo (Quelle: AMS9
Founded in 1990 and based in Amsterdam, AMS-Sourcing has weathered the storms of retail life pretty well. Over the last few years, many retailers have been jumping in and out of European alliance beds in a highly promiscuous fashion. But the membership of AMS-Sourcing is still virtually the same as when stalwart Dutchman Swartsenburg gave Lebensmittel Zeitung an interview almost seven years ago to the day.

Current members include Ahold Delhaize (NL), Dansk Supermarked (DK), ICA (S), Jerónimo Martins (P), Kesko (SF), Migros (CH) and Morrisons (GB). And its Euro Shopper economy private label is distributed by associate members Booker (GB), Hagar (Iceland) and Uniarme (P) in their respective countries.

Like his his fellow buying group MDs, Bert Swartsenburg isn't prepared to reveal the annual buying volume effected through the AMS buying platform. But the €100bn-plus alliance differs from such retailer platforms as EMD, Coopernic or Agecore in that it concentrates exclusively on the international sourcing of own label.

 

"It isn't only a question of size"


Bert Swartsenburg, MD AMS-Sourcing (photo: AMS)
Bert Swartsenburg
Mr Swartsenburg, the members of European retailer alliances are renowned for their promiscuity, how moral are the shareholders of AMS-Sourcing?

Retailers come and go, and obviously we have also lost some shareholders over time, but, in general, I am very happy that our current AMS shareholders have always been very loyal.

The merger of Ahold and Delhaize in July 2016 also had a big impact on AMS. So we are now very excited to welcome Delhaize back as a respected AMS shareholder and to have them join our private label programme again.

Given the new alliances between Rewe and Leclerc or Auchan and Système U, would you say that there is a new trend towards dual partnerships rather than towards group alliances?

Perhaps, but I don't think this question really leads us anywhere. There are obviously large retail alliances with many members such as EMD and smaller ones with only four to six members. We currently have seven shareholders and two Euro Shopper distributors.

Maybe that still isn't enough?

Of course we are always interested to grow with new business partners. We therefore talk with retailers on an ongoing basis, especially in countries where we are not yet present.

Isn't it a decisive strategic weakness not to have a partner from Germany and France?

Of course it would be great to have a new business partner in both those countries.

How do you select new members? Do you look for a certain size in terms of annual sales?

Obviously, members have to have a certain scale, but it isn't so much a question of size. If you look at our current shareholders some are considerably larger than others. We add value to the individual retailer and therefore expect a potential retailer candidate to add value to the group.

So the real questions are: Does the way they work match us? Do our processes match? What is their share of private label? What ambitions do they have in private label? And what is their private label architecture?

Why has AMS decided to devote yourself exclusively to own label sourcing?

We have built up a very solid track record over the last 27 years in private label sourcing, and it differentiates us from most other buying alliances and platforms where the main focus is on A-brand synergies.

Why not also source brands?

When we drafted our new strategy a couple of years ago, the first thing we did was to interview our shareholders, who are also the owners of the company. They told us to focus on what we do well and not to execute on too many activities. So we decided to go back to our roots.

Meaning the economy private label brand Euro Shopper?

AMS still owns the Euro Shopper brand, which was very important in the start-up phase of AMS. Over time, we have grown our private label programme so that we now source three tiers, i.e., premium, standard and economy.

Are your members obliged to list Euro Shopper?

Euro Shopper is available to all our business partners, if they wish. If they prefer to use their own value brand, then we can still source it. In the top- and mid-tier we always source under the shareholders' labels and therefore do not use a common name.


Read in German: "Es geht nicht nur um Größe" on page 3 of Lebensmittel Zeitung, no. 23, 09.06.2017


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