July 23, 2015

Christian Haub on the demise of A&P

Christian W. E. Haub, Tengelmann partner
Christian Haub: "A&P helped us to really understand the US consumer market"
The sad fate of historic and now insolvent US supermarket retailer A&P will provide students at Harvard Business School with study material for generations to come. It is certainly remarkable how the Great Atlantic & Pacific Tea Co., a household name in America with more than 15,000 stores, eventually crumbled into a small regional multiple only to file for Chapter 11 again this year. Although the Haub family exited A&P for good in 2012, their name had been inextricably linked with the company for over three decades. The owners of Germany's seventh-largest retailer Tengelmann Group have long gone on to pastures new and are currently reinventing themselves as an important investor in internet start-up companies. So theoretically they could just wash their hands of A&P and refuse to comment. However, Lebensmittel Zeitung judged Tengelmann partner Christian W. E. Haub rightly in that he did have something to say about the fate of the proud company he once presided over.
July 9, 2015

Paolo Barilla talks pasta, sauce and crisp bread

Paolo Barilla, Vice-Chairman Barilla Group
Paolo Barilla: "You can't buy international experience at the supermarket"
Barilla Group is living proof that more than ham comes from the delightful northern Italian town of Parma, which has been home to the Italian pasta maker since 1877. Vice-Chairman Paolo Barilla (51) is one of the three siblings who have majority control (85 per cent) of this privately-owned company. His older brother Guido is Chairman; his other brother Luca is a fellow Vice-Chairman. Having interviewed Guido Barilla almost six years ago to the day, it would seem that Lebensmittel Zeitung is gradually getting to know the whole family. Admittedly, talks could have been more frequent as the brotherly trio has quite an entrepreneurial tale to tell. Like the three musketeers, they have had their fair share of bumps and bruises since deciding to go international in 1993. Shakespeare once wrote: "Experience is a precious jewel and it hath needs be so, for it is often purchased at an infinite rate." For the Barillas this infinite rate was the purchase of German baker Kamps at the inflated price of €1.8bn in 2002. So how come they still like Germany?
July 9, 2015

Barry Callebaut innovates chocolate

Heat-resistant chocolate (photo: marcel van coile)
Heat-resistant chocolate: Melts in your mouth, but not in the shop window
The current heatwave in northern Europe isn't too good for chocolate sales, which have plunged over the last few sweltering days by a staggering 30 per cent. But for researchers at the Global R&D Centre of Barry Callebaut in Wieze/Belgium the weather simply can't be hot enough. A few days back, our newspaper caught ten of them standing around two chocolate bunny rabbits as they watched with childlike glee how one melted under an infrared lamp at 38°C and their one didn't. But what looks like a scene from Sesame Street is really big business for the world's largest manufacturer of cocoa and chocolate products. The Zurich-based group already makes a third of its €5bn annual sales in threshold economies and wants to boost business with them. But when you market a product which is supposed to dissolve in the mouth, it is hardly suitable for most shop windows in Africa, Latin America or Asia. So thermo-tolerant chocolate could be the intriguing answer. Heat-resistant bunnies are, however, just one of the lines that Barry Callebaut has been able to create with unique functionalities. Although the company is loath to specify annual R&D spend, innovation is clearly a strategic enabler for future growth. In fact, an astonishing 70 per cent of all revenues are generated by products that have only been developed over the last five years.
July 3, 2015

Run on Lidl stores in Greek financial crisis

Lidl store in Greece (photo: LZ-Archiv)
Last resort for Greek consumers: While politicians and corrupt elites squabble, unpretentious Lidl offers the people a square deal
As smirking Finance Minister Yanis Varoufakis plays Easy Rider on his motorbike and Merkel, Schäuble, Lagarde and Juncker look grimmer by the hour for the camera, the Greek tragedy unfolds apace. Nemesis here takes the ugly form of more than €320bn in unsustainable debt. Regardless of the outcome of the national referendum on the international bailout this Sunday, there is no doubt as to the protagonist: the Greek people. Forced to choose between the bitter cups of chaos or further decades of grim austerity, like the tragic hero of old, they seem damned whichever way they turn. It is an ill wind indeed, however, that blows nobody any good. The tormented country may be grinding to a standstill, but the 220 discount stores of Lidl Hellas continue to do a rip-roaring trade. So it must come as an irony for those Greeks who see the German financial machine as their oppressors that it is a German retailer who gives them the best bargain on the High Street.
June 25, 2015

3rd Global DIY Summit in London

Véronique Laury, CEO Kingfisher (photo: Thomas Goetz/EDRA)
Kingfisher CEO Véronique Laury: "Do It Yourself costs less"
DIY is dead, long live DIY! This could well have been the motto for this year's Global DIY Summit in London, organised by international trade organisations EDRA and fediyma. The two-day get-together of the great and the good in the industry provided an authoritative statement on the current state of repair in the global home improvement sector. Some of the daunting challenges facing the trade were revealed at the very start of the show via an electronic questionnaire. One in three suppliers and one in five retailers believe that the growth of online home delivery could force 70 to 80 per cent of all physical store space to close by 2025. A surprisingly high number of attendees also estimate that robots could replace 10 to 20 per cent of all shop staff by then. Meanwhile, younger consumers are becoming less interested and capable in DIY, which favours the "Do-It-For-Me" segment. This is good news for professionals and their wholesale customers, but it means that fewer tills will ring at the DIY store. Here even Sergio Giroldi, CEO of German market leader Obi, admits: "Big box stores are too far away from today's customers." So why were the speakers so bullish?
May 14, 2015

Majorca: sun, sangria, and Aldi

Aldi opens in Majorca (caricature: Oliver Sebel)
Colony in commotion: Who is the king of Majorca?
Feel like a cheap and cheerful break this summer in Majorca, but worried about the money when you're there? Want to drink bucketfuls of sangria with a straw to droning music and pass out under a palm tree without a thought as to what your hangover will cost you? Need to protect your lily-white northern skin from going lobster-red with a suntan lotion that even the mass tourist can afford? Or do you simply require a towel to claim territory on the beach? Don't despair because as from next week Aldi will be there! According to our generally impeccable sources, the secretive German discount giant intends to power away on the Mediterranean holiday island in order to catch up with arch-rival Lidl who has already opened 14 outlets. Aldi wants to kick off with six stores next Wednesday and have a further four up and running by the end of the year. Benvingut (Bienvenid) a Mallorca!
May 7, 2015

Brian Sharoff talks PLMA and retail brands

Brian Sharoff, CEO PLMA (photo: PLMA)
Brian Sharoff: "I have helped to direct the battle between A-brands and retailers"
Mr. Own Label, Brian Sharoff, is delightful company and hasn't lost either his wry New York humour or his puckish grin over the years. Sharoff's long tenure as President at the Private Label Manufacturers Association (PLMA) is a true American success story. Under his dynamic and entertaining leadership since 1981, membership has steadily grown from 200 companies to more than 3,500 today. Annual PLMA trade shows in Amsterdam (May) and Chicago (November) have long become a "must" for the retail and fmcg industry. In the run-up to this year's fair in Amsterdam on May 19 & 20, Lebensmittel Zeitung wanted to know how this man built the PLMA into the force it is today and why at a very indefatigable 68 he now sees the future in video streaming services?
May 7, 2015

Lidl changes US management

"Better late than never" (photo: Creative Soul - Fotolia)
Has Lidl furled or unfurled its sails for America?
In a surprising move, German discount giant Lidl has changed its US leadership within only leagues of colonising America. The top brass of Lidl International have just announced to staff in Virginia that senior execs Kenneth McGrath (39) and Kevin Proctor (42) are leaving the US subsidiary. The executive duo is succeeded by Ireland CEO Brendan Proctor (40). He will be assisted by Gareth Reed (33), a new member of the management board and previously responsible for expansion. Admittedly, American business culture is more hire & fire than here in "Old Europe", but one can only speculate why Lidl boss Sven Seidel and board member Patrick Kaudewitz made their decision. Has progress been too slow on preparing US entry? Or were there other reasons? Above all, will it delay entry to the States?
April 23, 2015

Accenture Interactive's new Innovation Center

Accenture Interactive R&D Director Alexandre Naressi talks to a robot (Accenture)
Cute conversation: R&D Director Alexandre Naressi chats with a robot
If you like conversing with robots and your watch, but hate driving behind the wheel or shopping in stores, then the future is just for you. This might be one conclusion drawn from a number of thought-provoking presentations given by Accenture managers at the opening of the IT & management consultancy's Innovation Center in Sophia Antipolis last week. Company experts are clearly convinced that the teething problems of new consumer technology such as wearables, driverless cars, the "internet of things", and delivery drones will soon be resolved. Talking robots are also about to enter call centres and shops in order to deal with customer enquiries. Welcome Brave New World?
April 9, 2015

Ornella Barra talks Walgreens Boots Alliance

Ornella Barra, EVP Walgreens Boots Alliance (photo: WBA)
Ornella Barra: "Employee relations are often overlooked after big merger deals"
Ornella Barra and Stefano Pessina go back a long way together, but they still ride in formidable tandem at what is now the world's largest pharmacy-lead health and beauty company. With over 12,800 drugstores in eleven countries and a mighty pharmaceutical wholesale & distribution network in eight more, there has to be considerable harmony of strategic thought at newly-merged Walgreens Boots Alliance. "I consider Stefano the architect within the company and myself as the engine," says Barra. "He is the visionary strategist and does the financial side. I prefer to create a common culture and nurture good relationships." As a female exec, Ornella Barra is quite a rarity in male-dominated boardrooms. But this cosmopolitan lady has not lost her femininity in the fight to the top and dresses with exquisite taste. Almost shy at press conferences, she unfolds her Italian charm and emotional intelligence to the full when talking one-to-one.