Investigating Dutch grocery trends over the past decade
The grocery industry has seen a number of fascinating changes over the last 10 years, even if it hasn’t historically evolved as quickly as other retail sectors. The simple fact is that the population of any country will always need to be fed, which presents a marketplace that is constant, whilst also ripe for innovation to those who dare to disrupt the status quo.
We’re happy to be at the centre of grocery innovation in the Netherlands, pushing the boundaries of what’s possible. Let’s take a look at what’s changed in the past decade, and how we think the industry is likely to move forward in the coming years.
Full-service supermarkets
In the Netherlands, it became clear that shoppers like to get their groceries in large supermarkets with everything under one roof, and retailers are well aware of this fact. Due to this consumer preference, we see in studies that around 80% of Dutch food stores follow this format — with floor space between 500 and 1,500 square meters. In response to the needs of customers, and in spite of the inherent spatial difficulties, these stores have been built in central and residential areas of cities for ease of access.
As well as the breadth of choice that can only be offered in bigger stores, these full-service locations are hoping to engage with millennial consumers by offering additional services and customised experiences. Those supermarkets aspire to be seen as a place to meet friends and grab a coffee, and they’re required to diversify product ranges to include electricals and and homewares to satisfy the needs of the younger customers looking for more than just a food shop.
The remaining 20% of Dutch grocery stores consist of smaller convenience units, wholesalers, and even larger superstores — the kind you’d find out-of-town that are only accessible by car. This retail landscape is in contrast to other European countries, where it is far more difficult to build medium-to-large sized stores in built-up areas, and where a higher proportion of inner-city grocery shopping is done in smaller convenience stores.
Dutch supermarkets
Unlike other countries where there is stronger and more varied competition, Dutch grocery shopping is currently dominated by two supermarket chains; Albert Heijn and Jumbo. Together, the pair have monopolised 52% of the market share. German discount brands such as Aldi and Lidl account for a further 17.3% of the food business nationally. This is according to the same retail foods study that I mentioned earlier, released in December 2016.
As these bigger brands have consolidated their positions, it’s left little room for the smaller independent retailers, whose numbers have unsurprisingly dwindled in recent years. Of course, Picnic is on the move to disrupt this balance by offering consumers something completely new.
Sustainability and health
New generations of Dutch consumers are increasingly passionate about sustainably-sourced products, with the market share for such products rising to 8% in 2015, with a turnover some €3 billion.
Well-being is also a key concern for the same demographics, and a trend towards healthy living has been seen in all western territories in recent years. Consumers are more willing than ever to invest in so-called “superfoods” such as nuts, certain fruits, seafood, and legumes. Organic food is also extremely popular, and has been on the up since before the turn of the century. With the exception of a brief dip in 2013, the worldwide sales of organic food have increased every year since 1999, and net sales accounted for $81.6 billion in 2015.
Organic foods and superfoods are often more expensive than more common equivalents, but mainstream media has backed them together with the associated lifestyles. As consumers become more informed (thanks in no small part to the spread of educational information on the internet), supermarkets have been quick to seize the opportunity and provide a better selection of these products.
As our understanding of intolerances and allergies has increased over the last decade, so too has the market for specialist foods and “free-from” products. Goods that were once difficult to find now have entire sections devoted to them, and it’s also common for supermarket brands to target these foodstuffs to those who don’t necessarily require them for medical reasons.
In 2014, the global market for gluten-free foods stood at around $4.21 billion. According to recent reports, the global gluten-free retail market has grown considerably from $1.7bn in 2011 with a forecast of reaching $4.7bn by 2020. People are choosing gluten-free for a variety of reasons — not just medical. This trend is also echoed in the lactose-free arena. Global figures are sketchy, but the UK dairy-free milk industry was measured at £161.5 million in 2014, escalating dramatically to £241.1 by 2016.
Online shopping
One of the overriding trends in every commerce industry over the last 10 years has been the rise in online purchasing. The “Amazon (or in the Netherlands Coolblue) generation” has become accustomed to convenient online shopping and quick delivery, and groceries are following other product ranges down this inevitable and exciting path. Online shopping, particularly for groceries, is at a different development stage in every country. The UK is leading the way in Europe at the moment, but we’re hot on the trail.
In the Netherlands, online still makes up a relatively small percentage of overall grocery shopping, but it’s taking off in a big way. Picnic is playing an increasingly influential role in the online groceries area. Our recent growth has shown that we’re making an impact and that consumers are comfortable with using technology to get their weekly grocery haul.
This area of retail can only be expected to blossom in the next 10 years, as services become more refined and reliable. All the signs indicate that the pace of change will quicken, and we’re delighted to be at the heart of grocery innovation.
Picnic’s role
So, where might Picnic fit into all of these trends? As online shopping increases in popularity in Europe, there will be great opportunities for e-retailers like us to grow and thrive. It’s already happening, for sure.
Offers of free home delivery and low-price guarantees will serve to further persuade busy consumers that they needn’t go to a physical store and do a huge bulk of grocery shopping in one go. A supermarket in their pocket with super-convenient (and clear) delivery options means that they can order what they need on a regular basis, thus reducing waste and taking the hassle out of the experience.
Our electric van delivery also addresses a fundamental flaw in online grocery shopping and delivery; its impact on carbon emissions. Not only can we provide fresh groceries at a low-price guarantee, but we also undertake better environmental practices and help the customer reduce their own personal carbon footprint. Combined with our focus on local produce, Picnic has developed a socially and environmentally responsible operation. This resonates with many people in the Netherlands and further afield.
The recent trends in grocery shopping highlight that we’re in a great position to serve Dutch consumers with everything they need, and we’re well-placed to drive innovation as the grocery industry evolves over coming years.
