“With the Earth’s population set to hit the 9 to 10 billion mark, and with as many mouths to feed, the rising demand for food constitutes a real challenge for the food and distribution industries.
In 2016, SIAL Paris reflects both this development and the way in which the distribution sector has capitalised on the challenges posed by an ever-increasing number of sales outlets. For instance, for the last 20 years, hypermarkets and supermarkets have represented 70% of the market share in Europe - not only because consumer habits are deeply engrained, but because these outlets have managed to retain customers and resist the rise of omni-channels and alternative circuits by fighting to create brand preference.
The food distribution sector knows that clients are drawn by the diversity and attractiveness of the products available (at the best prices). And so the outlets have adapted, learning how to respond to the the ever-evolving needs of today’s savvier and increasingly responsible “consum’actors”.
Numerous internet-based retail innovations have been launched across the world – especially in the U.S.A., with disintermediated shopping services such as Google Express Shopping and Instacart. These platforms or apps allow clients to shop on their smart phones, promising to collect and deliver products. For now, such “disruptive” offerings are epiphenomena, targeting consumers who place the benefits of the service above the actual cost.
But when it comes to new concepts, the retail sector has managed to adjust and adapt to this rise in e-commerce by hybridizing its own sales models, mixing both the physical and the virtual. Even with drive-through and click & collect services, the physical store remains the centre of the shopping experience – something that allows outlets to create brand preference, despite the changing landscape.
Examples? Stores like Eataly, which doubled its restaurant offerings; Whole Foods Market, which morphed into a producer of organic foods; or “retailtainment” centres, like the malls in Dubai. These new concepts (and others), no matter how embryonic, are waiting to be discovered at the fair’s roundtables and at other SIAL TV conferences – or during the Parisian “stores tours” (proposed in conjunction with MMM), taking visitors to innovative points of sales, from food distributors and gourmet delis, to wine-related stores.
As you know, brand preference isn’t necessarily linked to price. It’s all about the product offering - and therefore the constant need for retailers to source new products and brands. With over 400,000 products, presenting worldwide innovative products and trends, SIAL Paris is a playground for the distribution sector - the best food showcase in the world."
Nicolas Trentesaux, Director SIAL Network
SIAL Paris 2016 in figures
- 7 000 exhibitors
- In 2014, 2 800 exhibitors (practically 1 out of 2) proposed Private Labels, a selection of which was presented at SIAL Innovation
- 51% of visitors are from the distribution sector
- 2 out of 3 visitors are looking for new products.
Inside SIAL’s Shopping Basket
Two out of three visitors come to SIAL Paris to find new products. Food buyers repeatedly find inspiration here and food distribution exhibitors are given a chance to shine thanks to a visitor’s trail dedicated to the sector.
In 2014, 9 out of 10 buyers praised the diversity of the products at SIAL Paris and 100% of worldwide distributors – brands and stores – were present: Walmart, Carrefour, Tesco, Metro, Aldi, La Grande épicerie de Paris…
Inspiration has always been what feeds the SIAL network, and it’s as true as ever in 2016 with:
- Over 2500 registered new products expected at SIAL Innovation
- 15 award categories, XTC trends and the TNS study.
- The SIAL Innovation 2015-2016 winners’ village highlighting the most innovative products from around the world.
Showcase for French Food
Once again, in 2016, France will be SIAL Paris’s main exhibitor with over 1000 companies taking up 19% of the exhibition area. French food will be under the spotlight thanks to a partnership with French retailers and their buyers. And to make finding them easy, all French exhibitors (of the 21 sectors present) will be grouped under a “France” banner, proposed by the Ministry of Agriculture. The visitors’ guide, ‘France’, will also increase their visibility.
Dedicated “Store tours”
SIAL Paris has joined forces with MMM, the European specialist for retail benchmark, to help showcase new retail concepts in France. Three “store tours” will be dedicated to innovative food concepts in Paris - from delis and gourmet stores, to wine and spirits outlets.
“Bon appetit” with Meat and Dairy products
In 2014’s edition, 1000 exhibitors (around 15% of the show) represented meat and dairy products. In 2016, these flagship sectors will be under the spotlight again thanks to a series of dedicated events, including 2 conferences with SIAL TV and cooking demonstrations at La Cuisine.
Meetings - SMEs/Retail
Once again, food-sector SMEs and retailers will have the chance to meet during SIAL Paris’s “Meeting – SMEs/Retailers” events organised in partnership with the FEEF (Fédération des Entreprises et Entrepreneurs de France). Stores such as Auchan, Carrefour, Casino, Intermarché, Leclerc, Monoprix and Système U have already confirmed their presence! These meetings aim to develop commercial relationships between the parties, by facilitating networking and understanding.
World Tour - a Pertinent Source of Inspiration
During the World Tour, 28 journalists presented products and trends from their respective countries. Nielsen will complete this food industry ‘map’ and help companies to both understand the specific characteristics of these global food markets and find new development opportunities.
These trends and products will be exposed at SIAL Paris in passing corridor between halls 5A and 5B.
Distribution on film
On the set of SIAL TV, live from the Show, there will be both conferences and roundtables dedicated to new forms of distribution.
Market figures per SIAL zone
- Middle East: Food market value of 50 billion US$; 2/5 in retail; food sales in the distribution sector have increased by 27% since 2012. The concentration of distribution is stabilising.
- Philippines: 3rd food market in the ASEAN region; strong growth (due to demographics) is estimated to reach 600 million US$ by 2020; rapid modernisation of distribution channels (declining market share for traditional shops: 56% in 2012 vs. a projected 43% in 2020). Of the 642,013 food stores, 638,826 are grocers (99,5%), 1,550 are convenience stores (0,24%), 1,157 are supermarkets (0,18%) and 458 are shopping centres (0,1%).
- Canada: Projected food market value of 5 billion US$ in 2017, with highly structured distribution channels
- 27% are independent stores, 14% of which are ethnic food shops
- 73% are supermarkets
- Price sensitive market (36% of products are purchased as promotions)
- China: The middle classes represent 350 million people; the market is growing by 20% each year (estimated at 1.500 billion US$); the biggest player is the online market; supermarkets grew by 9.2% in 2016. By 2018, 4,801 supermarkets will have opened in China.
- Indonesia: The middle classes represent 45 million people; modern retail accounts for only 1% of the market (15% in value); large international chains are starting to be developed here; it’s the world’s leading market for halal products.
SIAL Paris - on the Pulse of Global Distribution
The food distribution sector is on the move in France and across the world: SIAL Paris puts the latest market trends, ideas, and product innovations and concepts under the spotlight.
Global Distribution Transformations
Food distribution is changing all over the world. Nielsen (in partnership with SIAL Paris) has studied the major European trends: Though old distribution methods no longer work, the hypermarket is still a valid player. Modern facilities are pushing older versions out. Discount stores are not the heavyweights we imagined them to be. And outside the UK, food-based e-commerce is still in its infancy. In terms of discount stores, some countries stand out: in Germany for instance, they account for 42% of the market – as opposed to a maximum of 20% in Europe as a whole. In France discount stores represent just 10%.
A Shop for Everyone
When it comes to food, most consumers have their own habits and stick to them. And though this may appear to have hindered innovation, it is actually a chance - for despite the uncertainties of the modern world, distributors haven’t sustained any significant falls in business. For recurring purchases, clients choose the points of sales that best reflect their lifestyle or culture. Most prefer traditional stores where choosing products is a ‘real’ experience – hence the enduring popularity of large stores: in France, shops over 1000 m² make up almost 80 % of the market. Fewer customers opt for e-commerce (3,8 % of the French market, according to Nielsen). The stores concerned use different sales models: one is a “total” model, which includes services (such as Tesco in Great Britain); another is a “partial” model like drive-throughs, which are growing by 15 to 20 % a year in France.
Connected Stores are Already a Reality
As with other sectors, the food distribution industry has started its own digital revolution. There are dozens upon dozens of food delivery platforms and apps – everything from cooked meals and groceries, to fresh products… In France, UberEats has hit the Parisian market with the promise of “instant” deliveries (within 30 minutes – 10 minutes for express offers) thanks to its taxi fleet, Uber. And Frichti has launched an attack on junk food with ready meals (home-cooked on the start-up’s premises) at affordable prices: 10 to 12 euros a menu.
Connected stores also appeal to clients looking for endless inventories and great prices. In the U.S.A., several companies are simplifying clients’ lives with disintermediated food shopping services. With Google Express Shopping, for instance, customers can shop at several retailers and Google will take care of the logistics, collecting all purchases in one single order. With the phone app Instacart, clients shop on their smartphones, then Instacart employees at the store in question collect the products, sort out payment and deliver.
The Right Recipe for Creating Brand Preference
In an increasingly fragmented world, where supply is higher than demand and price wars reign, opening a store in the ‘right place’ it is no longer enough to secure success or sustainable growth. Food businesses need to create brand preference – notably by responding to clients’ needs and scoring high on product value and service. Only this way can they retain clients and prevent them from going to the competition.
Sources: Nielsen, World Tour, Olivier Dauvers