Introduction to France Seminar THIS DOCUMENT IS CONFIDENTIAL AND RESERVED ONLY FOR THE PARTICIPANTS AT THE SEMINAR HELD IN HELSINKI ON 21ST MARCH 2019. ALL CIRCULATION OF THIS DOCUMENT IS STRICTLY FORBIDDEN. By Food From Finland & SetUp Partners Helsinki, Thursday 21st March 2019 Agenda SEMINAR (this morning) • Retail Market Overview: – General data France – Focus on food and drink trends and consumption – Market trends and drivers – Retail panorama with profile for each key player • Mainstream retail chains • Premium food halls • Key organic chains • Key hard discounters • Horeca sector overview (including trends) • Rungis market • Market entry rules and general advice with pressure points and challenges ONE-TO-ONE MEETINGS (this afternoon) • Specific one-to-one meeting sessions to assess the potential interest of your products and know-how from a French perspective SetUp Partners • We facilitate your Marketing and Commercial Development in France • Our clients are: manufacturers, brands, tradeshows, B2B event organisers, retail and foodservice operators • We use our extensive local knowledge and market expertise to facilitate, put into place and coordinate projects at various levels: Market research stage - Implementation - Launch - Management & Follow Up • Our DNA : ✔ 100% Food: products, sectors, networks ✔ Results orientated, Dedicated ✔ International vision, Operational focus France • Population: 65 million • France is split into 13 different regions • It has 3 large coastlines and borders with Belgium, Luxembourg, Germany Switzerland, Italy, Spain • Number of households: 28,8 million the number is increasing but the size of the households is decreasing (2,2 people on average) • Ageing population: 19,6% of population are over 65 years old • Much political unrest over the last 12 months as President Macron tries to push through a series of sensitive reforms (reform of the public sector, employment, education and training, pensions…) Source: INSEE Food and Drink in France • Average household food consumption = 20% vs 12% in Finland • A strong link / interest with food part of the French culture, a strong farm/food industry • A large potential / demand for: – Innovation (both branded and own label) – Premium offers – Clean/organic/health/free from – Food-to-go both retail and foodservice Source: OECD French meal times • The French spend longer eating and drinking than any other nationality: 2 hours 13 minutes in 2018 (versus 1 hour 21 minutes in Finland!) – The average time spent eating and drinking / day is split into 3 key moments: breakfast, lunch, dinner (+ tea time for children) • A French meal traditionally consists of a starter –> main course –> cheese –> dessert, although this full meal is not eaten everyday • French schools offer several courses at lunchtime and restaurants offer menus including several courses • Outside of meal times, the French do not really snack – the one exception being “le goûter” (middle of the afternoon) –> a specific 4th meal for children when they consume fruit, a dairy product and a biscuit / other sweet snack This traditional pattern is evolving Source: OCDE research 2015 (published in March 2018) French meal times • There are significant differences between the city / countryside, although both are moving away for the traditional structure of meal times food- to-go trend • Consumption habits are evolving and meal times are merging / becoming less fixed increased popularity for brunches (at home and out of home) + “aperitif time” / “apero – dinatoire” / slunch (at home) pleasure, sharing – whatever the age of the consumer • Nutritional message is increasingly important and has an impact on meal choices (ex school canteens) Finland • In France we have a very positive image of all the Nordic countries – tendency to group them together • We associate Finland with: – Nature – Clean – Healthy – Environmentally conscious – Quality at all levels – Positive economy Link with tourism, Northern lights, winter, snow, Christmas…(e.g. success of trips to Lapland) Key Trends Organic and Vegan Natural and Sustainable Pleasure Food-to-go Organic, Vegan & Vegetal • Spectacular growth within the organic sector – Locally sourced produce (where appropriate) – Organic food account for 4,1% in multiples sales but this is expected to reach 11% in the next years according Nielsen experts… • Limited vegetarian consumers in France vs other EU countries, but this is changing (no / less meat campaign, development of vegan ranges / stores) Natural and Sustainable • Free from: it started with gluten free, but now palm oil free, dairy free, sugar free… • Clean labelling: natural ingredients, limited process: no additives, no preservatives, no taste enhancers, no artificial flavourings… • Nutriscore • Environment: less packaging, less waste, animal welfare Pleasure Sophistication, “Premiumisation”, Innovation • The pleasure of eating and the taste remain important • The French consumer is becoming more and more sophisticated • There is a constant search for innovation (products & packaging) Aperitif time • More and more important slunch “dining” • Constant search for innovation • 1st discovery /sharing/ taste new • Very open to non-French origin (no made in France necessary, but origin of ingredients could be a claim) • Organic as a plus but not as number 1 priority Trade aspect: buyers request + consumer’s expectations Food-to-go • There is still a growing demand in both retail and foodservice – Development of private label snacking ranges – Growth of chains and independent food-to-go concepts… • Innovation is a key differentiating factor (premium ingredients, exotic recipes…) Mainstream Retailers The “Big Boys” Retail Groups - Different Players, Different Structures • The groups: Auchan, Carrefour, Casino • The “independent”: where the store belongs to the store manager, i.e. Leclerc, Intermarché, Système U • The Hard discounters: Lidl, Aldi • The “organic retailers”: Biocoop, La Vie Claire, Naturalia, Bio C’ Bon (fastest growing segment) • The Freezer-centres: Picard, Thiriet, Toupargel, Eisman • The Parisian Food Halls: La Grande Epicerie, Lafayette Gourmet, le Printemps du Goût and fine food stores e.g. Fauchon… French Retail Groups Market share in France Market share Retailer in 2018 LECLERC 21,1% CARREFOUR GROUP 20,2% INTERMARCHE 14,9% CASINO 11,4% SYSTÈME U 10,7% AUCHAN 10,3% CORA 3,3% LIDL 5,5% ALDI 2,3% Source : Distribook 2019 Linéaires French Retail Groups Strong International Presence % of turnover Retailer in 2018 AUCHAN GROUP 65% CARREFOUR GROUP 53% CASINO GROUP 43% CORA LOUIS DELHAIZE 25% INTERMARCHE 7% LECLERC 3% SYSTEME U 0% Source: Distribook 2019, Linéaires Private Label @ 32,6% market share SM + HM + Drive + HD (+0,5%) +0,5% Standard PL 27,9% -13,7% Value line PL 1,5% +1,6% Premium PL 1,5% +17,4 % Organic PL 1,8% Source: Distribook 2019, Linéaires Private Label Standard , Premium, Value line, Free from, Exotic, Kids, Snacking, Regional, Vegan… Kids Exotic Free From Regional Standard Value Snacking Vegan Organic Premium Private Label 62% of processed food is made outside of France MADE IN BELGIUM MADE IN SPAIN MADE IN GERMANY MADE IN GERMANY Source: FIMIF Survey 2017 Online shopping • Click and collect ( 2018) = 6,3 billion € +7% vs 2017 • E-commerce food vs general e-commerce – Market share @ 6,1% (+0,3%) – Penetration rate @ 28,5% (+1,1%) – Average basket = 61,40€ – Average budget/y = 624€ (+5,4%) Source: Distribook 2019, Linéaires Retail Groups - Who owns what? NUMBER OF STORES HYPER SUPER CONVENIENCE HD (By fascia and type of store) LECLERC 622 LECLERC 67 LECLERC EXPRESS 63 LECLERC EXPRESS 637 CARREFOUR CONTACT 25 CARREFOUR MARCHE CARREFOUR 247 CARREFOUR 1056 CARREFOUR MARKET 774 CARREFOUR CITY 289 AUCHAN AUCHAN 144 AUCHAN SUPERMARCHE & SIMPLY 894 FRANPRIX GEANT CASINO 117 GEANT CASINO 393 SUPER CASINO 82 G20 296 INTERMARCHE CONTACT 127 SPAR INTERMARCHE 87 INTERMARCHE 1353 INTERMARCHE 89 INTERMARCHE EXPRESS SYSTÈME U 66 HYPER U 744 SUPER U 368 U CORA 60 CORA 117 MATCH HYPER CASINO 38 HYPER CASINO 385 SUPER CASINO 78 G20 COLRYUT 82 COLRYUT GRAND FRAIS 223 GRAND FRAIS /FRESH MONOPRIX (part of Casino) 314 MONOPRIX 188 MONOP’ LIDL 1486 ALDI 880 LEADER PRICE (part of Casino) 726 COTSCO 1 NORMA 70 NETTO (part of Intermarché) 293 Difficult for hypermarket model, large development for convenience stores Source : Distribook 2019, Linéaires (figures at 31.12.2018) Leclerc • N°1 - T/O France: 45,7 billion € • Independent retailer, large involvement of the store owners (entrepreneurial style management) • “Low price” policy “from petrol to jewellery etc.”, strong communication, highly competitive • Started in the Brittany region now cover the whole of France • Mainly focus on medium hyper stores (large disparity between stores) Leclerc Private Label • New! Fine & Premium: salmon, caviar, premium chocolate, oils etc. Leclerc – new concepts Le Village Bio • 200 new stores due to open in 2018 ! BUT… (???) Relais Leclerc: « Pedestrian drive » • Objective: 150 to 170 in city centres of which 50% in Paris (2019)… Carrefour Group • No. 2 - T/O France: 39,9 billion € • Operating LARGE HYPER & SUPER formats • Strong development of convenience formats have now adopted a very Parisian positioning • 2018 = a difficult year: strikes, stores closing and top management changes • September 2018 Carrefour launched a strong campaign promoting organic sales to support and build a new image and link to producers Carrefour Private Label +/- 20 organic stores Kids & Baby ranges Casino Group • No. 4 - T/O