Market Overview Norway
Food & Drinks Industry Day Thursday 27 th November 2008 Contents
• Norwegian economy
• Norwegian foreign trade
• Norwegian food and consumer spending
• Retail sector – Definitions – Major players
• Catering and foodservice
• Convenience trade
• Alcoholic beverages
• Import, wholesale and service – Major players
• Trends
• Reasons for targeting Norway
• Barriers/Challenges
• Bord Bia Services in 2009 Norwegian economy Economy
• The Norwegian economy grew by 3.5% in 2007. Forecast GDP growth for 2008 is 2.4%, decreasing further to 2.2% in 2009.
• The 2007 inflation rate was 0.8% and is expected to end up at 3.2% in 2008.
• Private households spent an average of €46.150 * per year on expenditure in the period 2005-2007, a real increase of 13 per cent compared with the period 2002-2004. Households in Oslo and Akershus spent over 30 per cent more than households in Northern Norway.
• The unemployment rate was at 2.8% in June 2008.
• Norway’s population totals 4,7 million, of which 450,000 have an immigrant background, coming mainly from Poland, Sweden, Iraq and Denmark.
* Exchange rate 1 € = NOK 7,91 Norwegian foreign trade Foreign trade
• Norwegian exports were worth €98,9 billion in 2007 (783 billion NOK)
• The UK is Norway’s most important trading partner, accounting for 21% of exports, followed by Germany, the Netherlands, France and Sweden.
• Norwegian imports were worth €51,9 billion (411 billion NOK)
• Sweden and Germany lead the import trade, with approx. 14% of imports coming from each country. They are followed by the UK, Denmark and China. Norway trading with Ireland
Million € Imports to Norway from Ireland Exports from Norway to Ireland 2002 502,2 738,3 2003 502,2 491,8 2004 592,0 927,2 2005 723,1 1 508,9 2006 726,9 1 748,1 2007 702,4 1 630,7 Norway trading with Ireland
• Main product groups imported to Norway are – Machinery, transportation equipment – Chemicals, related products – Misc. manufactured goods – Crude materials, inedible – Beverage and tobacco
• Main product groups exported from Norway are – Minerals, lubricants, – Chemicals, related products – Machinery, transportation equipment – Manufactured goods Norwegian food import and export by SITC 2007
Import Export SITC € million € million 0 Food and live animals 3066,2 4866,1 00 Live animals 24,9 3,4 01 Meat and meat preparations 110,4 24,5 02 Dairy products and birds' eggs 75,0 82,16 03 Fish and fish preparations 418,7 4515,5 04 Cereals and cereal preparations 442,6 26,2 05 Vegetables and fruit 858,3 20,3 06 Sugars, sugar preparations and honey 138,9 13,9 07 Coffee, tea, cocoa, spices 285,6 30,4 08 Feeding stuff for animals 438,3 109,9 09 Miscellaneous edible products and preparations 278,5 39,6 1 Beverages and tobacco 497,6 73,5 11 Beverages 412,0 63,2 12 Tobacco and tobacco manufactures 85,5 10,3 4 Animal, vegetable oil, fat 297,2 130,3 Norwegian food and live animals import and export by country 2007
Import million € Export million € Denmark 383,2 France 482,7 Sweden 302,6 Russia 462,7 Netherlands 206,5 Denmark 451,1 Germany 192,7 Great Britain 327,1 Spain 181,4 Sweden 314,1 USA 169,8 Portugal 286,4 Italy 126,4 Poland 233,0 Great Britain 121,5 Japan 219,8 Brazil 116,3 Spain 183,8 France 108,5 Netherlands 173,9
Ireland ranked number 36 (€9,6 M) Ireland ranked number 55 (€3,4 M) Norwegian food trade with Ireland
• Main products imported from Ireland to Norway: liquors, whiskies, beer, (mineral) water, chocolate, sugars and food preparation
• Main products exported from Norway to Ireland: chocolate products, soups and broths, sugar confectionary (not containing cacao). Norwegian food and consumer spending Norwegian Food
• Norway is the longest country in Europe. Food preferences vary enormously from north to south although the most common food in Norway is seafood. Meals in Norway often include sandwiches or crackers with cheese, salmon, cucumber, tomato, jam, or herring, Norwegian cheese, coffee, berries, waffles and pancakes, home baked cookies.
• Healthy products are of growing interest, especially given that 49% of the Norwegian population is considered overweight. Norwegian consumers are also increasingly willing to pay more for healthy and ethical products.
• The Norwegians ate 8,76 kg of chocolate per capita in 2006 (Ireland 7,17 kg) and 5,11 kg of sugar confectionary per capita per year in 2006 (Ireland 3,98 kg). Household expenditure
• Norwegian households spend increasingly less of their budget on food. An average household spends 10 per cent of their budget on food, compared with 40 per cent in 1958.
• Not only does food absorb a smaller share of the budget, the Norwegians also buy other types of food. The consumption of fish and potatoes (measured in kilos) has fallen considerably since 1958, and they eat increasing amounts of meat.
• There has been a tenfold increase in the consumption of mineral water and soft drinks (measured in litres) since 1958. The sale of wine (measured in litres) has also increased tenfold in the past four decades. Household spending on food 2005-2007
Expenditure per household per year in € and % Euro % 01 Food and non-alcoholic beverages 5 230 11,3 011 Food 4 719 10,2 0111 Bread and cereals 746 1,6 0112 Meat 1 986 2,4 0113 Fish 312 0,7 0114 Milk, cheese and eggs 775 1,7 0115 Oils and fats 109 0,2 0116 Fruit 415 0,9 0117 Vegetables 510 1,1 0118 Sugar, jam, honey, chocolate and confectionery 494 1,1 0119 Food products 267 0,6 012 Non-alcoholic beverages 511 1,1 0121 Coffee, tea and cocoa 121 0,3 0122 Mineral waters, soft drinks, fruit and vegetable juices 389 0,8 Household spending in food 2005-2007
Expenditure per household in € and % Euro % 02 Alcoholic beverages and tobacco 1 242 2,7 021 Alcoholic beverages 825 1,8 0211 Spirits 159 0,3 0212 Wine 351 0,8 0213 Beer 314 0,7 022 Tobacco 416 0,9 Tax and registration information
• VAT on food in Norway is 14%. Food served in restaurants is charged at 25%.
• Norway heavily protects domestic production with high import tariffs and other barriers to trade.
• Norway has additional taxes for alcoholic beverages, non-alcoholic beverages, chocolate and confectionary and sugar.
• Trading with live animals, animal products and food within the European community and EEC, and import from third countries must be registered in the EU database TRACES (TRAde Control and Expert System). The first part of the Health Certificate can be filled out electronically in TRACES and then sent to the Norwegian Food Safety Authority for approval. Import of live animals and animal products to Norway must be registered in the electronic database Matilda VAM. Retail sector Definitions
The Grocery Retail Market
• is defined as all food, drink and non-food products (i.e. health & beauty, pet care, clothing, DIY, electronics, etc) sold through all retail outlets selling predominantly food in a given market – This includes the total turnover of hypermarkets and Cash & Carry stores – This is a consistent definition applied to all markets. Store definitions
• Hypermarket (9,6% market share in Norway) is a retail store selling a variety of goods in different categories, operating mainly in self-service, with the sales area exceeding 2,500 m². Food accounts for less than half of the total area but the focus of sales is on groceries. A hypermarket can be located in or near city centres, in a shopping centre or in other areas with good traffic access.
• Supermarket is a mainly self-service-oriented grocery store focusing on food, with at least 400 m² sales area and food accounting for over half of the sales area. In the practical statistics of the sector, the supermarket stores are divided into the large ones (19,7% market share in Norway) with over 1,000 m² and small (50,7% market share in Norway) with 400– 1,000 m² convenience stores.
• Large self-service shops are grocery stores of 200–399 m² while the small stores in this category have 100–199 m² (19,7% market share in Norway). The term “corner shop” or “neighbourhood store” often refers to self-service stores. This group also includes the discount stores . Norwegian retail
• Norway’s grocery retail market is worth €13,9 billion in 2007 and grew 5,9% compared to the previous year.
• In 2007 consumer prices went up 2.5%.
• Market dominated by Coop Norge AS, ICA Norge AS, Norgesgruppen and Reitangruppen.
• The four leading players hold a combined market share of over 90%. They also dominate grocery sales through gas stations and kiosks.
• Lidl entered the Norwegian market in 2004. Retailers responded by opening new discount stores and developing their own low-priced private label. But as of June 2008, the activities (50 stores) of Lidl have been taken over by Reitangruppen. Norwegian retail
• The dominant retail chains are involved in grocery trade in other Nordic countries as well, either through mergers or cooperative agreements.
• Compared to other Nordic countries, the discount sector has a high presence in Norway, mostly due to high domestic prices. Retail sector Major players Sales M€ per group market share in %
Total sales / group
7 000 39.2% 6 000
5 000 23.8% 4 000 17.5% 17.3% 3 000
2 000
1 000
0 Norgesgruppen Coop Norge ICA Norge Rema 1000 Norge Major players in Norway 2007
Market share Turnover (million €)
• Norgesgruppen 39,2% € 5 801
• Coop Norge AS 23,8% € 3 526
• ICA Norge AS 17,5% € 2 591
• Rema 1000 Norge AS 17,3% € 2 553 Turnover M€ 2007
Coop Norge ICA Norge Norgesgruppen Reitangruppen 500 465 450 420 409 400 368 350 314 326 300 263 275 250 200 180 145 140 150 118 100 79 50 23 25 13 0
! i r i r r d a y w a er r r 0 e g ae vi en k e he 00 rk Obs Rim N Li Ki Sp nt Me t/ M Jo ospa Ot a Ce r a 1 Ma ICA Maxi m ICA Bunnpris ra/ Eu (incl Extra) - M lt Re e U Prix rvic ICA SupermarkedSe Coop Norge AS
• Coop was founded in 1906 as a joint organisation of the Norwegian Co- operative Union and Wholesale Society. Coop has registered more than 1 million members.
• Coop Norge AS is a subsidiary of Coop Norden and responsible for purchasing, the supply of goods, chain operations and marketing.
• Coop Norge has 870 outlets and a turnover in 2007 of €3,5 billion.
• Coop has taken over Smart Club’s chain of discounted, warehouse-like retail establishments, including Christiania Gourmet & Catering. Coop Norge AS
Coop Norge consists of:
• Marked • Prix • Extra - first retail chain with all stores having the Swan Ecolabel (June 2008) • Obs! – the only hypermarket chain in Norway • Mega Coop Norge
• Future Priorities Before the end of 2009, over 700 stores will receive a make-over
• Private label Annually Coop sells private label products valued at €543 million. 25% is produced by Coop Norge Industry AS, covering Coop Kaffe (coffee), Røra factories (juice, jam) and Goman bakeries (bread and bakery products). ICA Norge AS
• ICA Norge AS is one of Norway’s leading food retailers with a total of 642 stores operated either as independent units or as franchises.
• ICA Norge AS (formerly known as Hakongruppen) is part of ICA AB, a Swedish retailing corporate group.
• In 2007, ICA Norge AS reported sales of €2,089 million, 4,348 employees (excluding the employees in the franchise shops) ICA Norge AS
• ICA Norge AS has 4 different store concepts:
1. ICA Naer – convenience stores
2. ICA Supermarked - supermarkets
3. ICA Maxi - hypermarket
4. RIMI - discounter ICA Norge AS
• Future Priorities From December 2007 ICA Norge offers sugar free counters at cash registers to promote health. Fruit and nuts now replace candy, chocolate and sodas.
• Private label - Euroshopper Norgesgruppen
• Norgesgruppen – Norgesgruppen, founded in 1994, is a privately owned company and Norway’s largest trading enterprise. The core business is grocery retailing and wholesaling.
– Roughly 56% of shop turnover derives from retailer-owned chain members, with stores directly owned by NorgesGruppen accounting for the remainder. NorgesGruppen also cooperates closely with several independent regional chains and shops.
– Turnover in 2007 was €5,801 million. Norgesgruppen
• Norgesgruppen consists of 3 retail concepts (profilhus)
1. Profilhuset Kiwi - discounter
2. Profilhuset Meny-Ultra - super supermarkets Meny-Ultra makes a complete range of grocery products available to consumers in full-scale, regional superstore settings under the franchise names Meny, Ultra, Centra and Jacob`s.
3. Profilhuset Kjøpmannshuset - corner shop /supermarket concept Including Spar, Joker, Eurospar and Naerbutikkene Norgesgruppen
– In 2006 a number of dissatisfied ICA franchisees switched to Bunnpris (small discounter), escalating the growth of the chain.
– JOH-SYSTEM AS and the regional ASKO companies supply the retail chains with dry food, chilled and frozen products, including fresh meat, tobacco and over-the-counter medicine. Norgesgruppen
• Future Priorities – Focus on operations in the rest of Scandinavia
• Private label – The main private label brands at NorgesGruppen are Eldorado and First price. Eldorado is an international private label brand, also used by Tradeka in Finland and Axfood in Sweden. Reitangruppen
• ReitanGruppen –The Reitan Group is a leading Scandinavian commercial operator, organizing and operating franchise-based activities in the fields of low-price trading (REMA 1000) and the convenience trade (7-Eleven, Narvesen, Pressbyrån).
• Reitan has only one concept in retail; Rema 1000, but it is the biggest retail chain in Norway. Rema 1000 has business activities in Norway, Sweden and Denmark.
• Rema 1000 Norway has rebuilt the shops around a new design and has strengthened its focus on fresh food, fruit and vegetables. Reitangruppen
• Future priorities – focussing operations on Scandinavia. The purchasing collaboration with EDEKA (Germany) will be strengthened further.
• Private label – The main private label brands are Godehav (fish) and Solvinge (white meat and eggs). Private label
• In March 2008, private label accounted for about 9,8 % of Norway’s total grocery market, of which frozen and fresh food are in the lead, followed by beverages and packed food.
http://no.nielsen.com Major players in Norway 2007
Group Chain Store type No. of outlets Market share % within group Coop Norge Mega Supermarket 145 32,2 Prix (incl Extra) Discount 314 29,7 Obs! Hypermarket 23 21,8 Marked Supermarket 368 15,2
ICA Norge Rimi Discount 263 39,6 ICA Supermarked Supermarket 79 22,5 ICA Naer Supermarket 275 22,2 ICA Maxi Hypermarket 25 14 Service - Mat/Livi 118 1,7
Norgesgruppen Kiwi Discount 420 29,3 Meny Hypermarket 140 21,9 Spar Supermarket 326 17 Bunnpris Discount 180 8,5 Joker Supermarket 465 7,9 Ultra/Center Hypermarket 13 4,3 Eurospar Supermarket 21 2 Other 8,3
Reitangruppen Rema 1000 409 100 Market share % by chain 2007
5,3% Marked 9,4% 0,4% Prix (incl Extra) 5,4% 3,8% Obs! 3,3% Mega 5,1% 3,0% ICA Maxi 1,5% ICA Supermarked 1,4% Rimi 12,6% ICA Naer 0,8% Service - Mat/Livi 0,4% Meny Kiwi 1,5% Spar Bunnpris 8,5% Joker 17,3% Ultra/Center Eurospar 11,6% Other 6,0% Rema 1000 Number of outlets 2007
Marked 420 Prix (incl Extra) 140 326 118 Obs! Mega 180 ICA Maxi 275 ICA Supermarked Rimi ICA Naer Service - Mat/Livi Meny 263 465 Kiwi Spar 79 Bunnpris 25 13 Joker 145 21 Ultra/Center 23 409 Eurospar 314 Other 368 Rema 1000 Catering / Foodservice Catering / Foodservice Umoe catering AS
• Umoe Catering AS – Umoe Catering is Norway’s leading chain of service establishments with a an annual turnover of €253 million (NOK 2 billion) and a staff of 4,000 divided between 205 restaurants and cafés.
– Umoe Catering is owned by Umoe AS. The Umoe Group is a family owned company historically running business in the maritime and ship-owning industry. Umoe Catering also owns 50% of Togservice Norge AS (together with Rail Gourmet Holding AG, subsidiary of Compass International).
The company’s subsidiaries are: – Peppes Pizza AS, established in 1970, 4 million pizzas per year – King Food Norge AS (Burger King) – American Bistro Scandinavia AS – Café Opus, – La Baguette AS – Pubcompaniet AS Catering / Foodservice Servicegrossistene
• Servicegrossistene – Servicegrossistene AS is the second largest wholesaler group in the Norwegian Horeca and catering market.
– The company has 23 owners, all with own warehouses. Servicegrossistene serves over 3,500 customers ranging from hospitals, cantinas, hotels, restaurants and fast food restaurants. The total turnover is €150 mill.
– Servicegrossistene also supplies products for vessels and the offshore industry.
– Purchasing is taken care of by Systemkjøp Norge BA. Catering / Foodservice Norrein Gruppen / Egon
• Norrein Gruppen – Egon is part of Norrein Gruppen, founded in 1981, owning 4 hotels, 2 restaurants and 27 Egon restaurants in Norway.
– Egon is a Norwegian chain of restaurants serving traditional dishes and drinks. Convenience trade Convenience trade Reitan Servicehandel AS
• Reitan Servicehandel AS – Reitan Servicehandel, part of Reitangruppen, is a leading Scandinavian retailing group, that specializes in franchise-based convenience retail businesses.
– Reitan's retail brands include 7-Eleven in Scandinavia, Narvesen chains (Norway) and Pressbyrån (Sweden).
– Reitan Servicehandel serves 200 million customers and has over 1,500 outlets. It also has a market share of 32,4% and a turnover of €1,25 billion (NOK 9,9 billion).
– The company has acquired Hydro Texaco and entered a joint venture agreement with Shell. 7-Eleven will take care of the kiosks at YX gas stations (taken over by Shell). Convenience trade NorgesGruppen Servicehandel
• Profilhuset Servicehandel (Norgesgruppen) – 1,100 sales points including kiosk, gas stations and restaurant chains
Includes: – Mix Kiosk* (kiosks, 695 kiosks) – Deli de Luca Storkiosk (mix between shop and deli, 27 shops) – Kaffebrenneriet Kaffebar (coffee shop, 17 locations) – Big Horn Steak House restaurant (28 restaurants) – Bon Appétit Gatekjokken (fast food, 23 locations) – Dolly Dimples (Pizza restaurant, since 1986, 84 restaurants) – Jafs Gatekjokken (fast food, 47 locations) – Le Café Kafé (coffee shop, 19 locations)
* NorgesGruppen owns the store concept, not the stores Alcoholic beverages Alcoholic beverages Vinmonopolet
• Vinmonopolet is an independent, entirely State-owned company, founded in 1922, with the exclusive right to retail wine, spirits and strong beer (>4,75%) in Norway.
• There are 222 Vinmonopolet outlets in Norway (December 2007).
• The products are purchased through importers (210 companies – Sept. 2008) holding the required license. The list can be found on www.vinmonopolet.no
• Vinmonopolet buys approx. 250 – 300 new products each year, being launched the first Saturday of every other month; from January to November.
• Vinmonopolet has no own production but buys from the also state-owned company Arcus AS.
• Fact: Vinmonopolet stocks 30 different items of Irish whisky in its range. Alcoholic beverages Arcus
• Arcus AS is the largest supplier in Norway of wine and spirits to Vinmonopolet and the Horeca (hotel and restaurant) trade. Arcus AS is currently the only distiller in Norway and has more than 80 years of experience as a supplier and producer of wine and spirits.
• Arcus imports spirits such as brandy, cognac, armagnac, Dutch gin, whisky, rum and tequila. Import / Wholesale Import / Wholesale NorgesGruppen / ASKO
• NorgesGruppen / ASKO – ASKO is Norway’s largest wholesale business, with almost 2,200 employees and sales in 2007 of €3,9 billion (NOK 31 billion). The wholesaling business delivers to grocery retail, institutional household, newsstand merchandise and service business market segments.
– The assortment consists of 22,000 product lines and the company has about 13,000 customers.
– ASKO is also one of the country’s largest transport enterprises.
– In April 2008, NorgesGruppen / ASKO and Statoil Norge signed a wholesaler agreement for the distribution of food and newsstand merchandise. Import / Wholesale Unil A/S
• Unil – Unil A/S is NorgesGruppen buying and marketing organisation for private label products. The company is responsible for the distribution and marketing of the products. The company has over the last 40 years built Norway’s strongest private brand for food and food-related products. The brand awareness for the Eldorado brand is 95%.
– Unil A/S is fully owned by NorgesGruppen. Import / Wholesale Haugen Gruppen
• Haugen Gruppen – Haugen Gruppen is one of Norway’s leading providers of international well known brands within foods and beverages, being no. 1 or 2 in almost every category.
– The company is active in grocery products, food service and wine and spirits. Import / Wholesale NorgesGruppen / ASKO
• NorgesGruppen / ASKO – ASKO Servicehandel supplies kiosks and small shops serving approximately 2,300 customers.
– ASKO Storhusholding supplies products to gas stations, cantinas, cafeterias and hotels
– STORCASH 7 Cash & Carry stores International partners
• Coop Trading – Coop Trading is the inter-nordic procurement company for Coop in Denmark, Norway and Sweden. The head office is located in Denmark. Trends
• Focus on healthy food – low fat and reduced sugar
• Multinationals establishing a foothold in Norway
• Domestic players becoming active abroad
• Regional producers providing local specialities Reasons for Targeting the Norwegian Market
• Norway has one of the highest per capita income levels in the world
• It has empathy with Ireland and Norwegians have a favourable image of the Irish food and drink culture
• A concentrated retail sector with links to the other Scandinavian markets
• Prices and potentially margins are high Barriers & Challenges
• Norway is outside the EU and imposes punitive import taxes on most categories of agricultural produce and in a more selective way, on most processed foods.
• The currency is the Norwegian Kroner which is now suffering from the economic turmoil across the world.
• Regulation – for example, the off-trade sale of alcohol is regulated for alcohol over 4.7%.
• Transport Costs and Distribution Bord Bia Services
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