How to get, hold and expand listings in German food retail
Food retail in Germany is a highly competitive channel, as tens of thousands of products are on display at the same time, with limited space and high price pressure. In addition, the attention span of shoppers is not very long, shopping trips are often done in a hurry and interest in new products is naturally low. But still, successful products can have an incredible shelf rotation and best chances for long-term sales to the mass market, which still shops food predominantly offline. We asked the German Head of REWE Start-up Lounge, Selda Morina, about her best tips on how to please food retail in order to gain long-term success.
Selda, from your experience, which attributes of a new product are the most important ones, in order to secure food manufacturers initial listings in the German food retail sector?
“Most of it highly depends on the product characteristics. Each company in the area of food innovation, from startup to traditional manufacturer, should think about these questions in advance: Does my product idea hit the nerve of the time, is the product trendy? Is a similar product already on the market or is my product a real innovation?
Promising features for a successful product are: it is innovative, aesthetic and understandable. A very important way to communicate all three is the packaging. All features should be depicted on the packaging design, so that the shopper can "understand" the product. Sustainability is a great driver as well in our current times. In general, the packaging needs to be thought through, as it is the face of the brand. Innovative packaging not only makes the product stand out from the crowd, it also increases recognition and supports brand communication. The legal requirements of course also have to be met.
When our REWE team decides about new listings, the first step of course starts by presenting the product to the responsible purchasing department. Here, the taste is also put to the test for the first time and is a highly important decision making factor.
To sum up, there is no uniform regulation in the food retail sector regarding the process for listing and the specification of which exact attributes are required for this. Each retail chain has different parameters, and of course different tastes in products. Speaking for REWE though, we of course have some legal requirements regarding product quality & packaging, requirements towards delivery & logistics and a few minimum requirements for documents/certificates that can vary depending on the product group.”
Once a product got the first listings, how do you manage to be successful in German food retail in the long term?
“This is hard to answer on a general basis, as various factors play a role here.
On the one hand, long-term success depends on what kind of trend a new product corresponds to: the sustainable or the recurring trend? A sustainable trend is characterised by steady, long-term growth. The chances of lasting success in the market are therefore good. In the case of a recurring trend, demand increases in intervals and a hype about the product is created. But after a certain period of time, the demand decreases significantly again. Only rarely, a hype turns into a sustainable trend. This reduces the chances of being successful on the market in the long term.
Therefore it is very important to think about what product to develop, and what the end consumers' need/interest is in the product – in the long run!
The subject of sales & marketing is also often misjudged. Especially many startups think that their product will sell well anyway just by standing in the shelf, and that it is not necessary to build up their own sales force. But especially with products and innovations that require explanation, it is important to actively approach customers and explain the products to them. In my opinion, an own sales force that promotes sales is therefore crucial for the success of any food brand, no matter how innovative a product might be.
Marketing also plays a major role, as it keeps the consumers interested in a product and increases the chances of continuous purchase. If you have good and sufficient marketing, you will increase sales, customer loyalty and brand awareness.
In order to stay in the market in the long term, a balanced overall package of the above-mentioned points counts and makes all the difference.”
How does the REWE Start-up Lounge support innovative companies on their way to success?
The Start-up Lounge offers young innovative companies the opportunity to gently enter German retail and gain experience during a three-months test listing in 25 selected test stores. The test stores are scattered throughout Bavaria from urban regions to the countryside, and fulfill various characteristics: There are stores with large and small sales areas, very high-turnover stores and those that are not so high in turnover by comparison. What they all have in common are "keen on startup" business people and store managers who are interested in innovations and who support startups during the test phase. If the products are well received by shoppers during the test listing, there is the possibility of a Bavaria-wide listing. The test phase is the "best practice" for food & beverage startups that want to sell to REWE.
In addition, by participating in our REWE startup lounge, the startups receive professional coaching in order to master the first steps and hurdles in retail together. As the lounge has many cooperation partners, the startups also have the opportunity to expand their network. All in all, REWE Süd's Start-up Lounge is a success platform for a well-prepared startups in retail trade.”
We thank Selda Morina for this exciting interview, sharing insights and giving tipps on how to succeed in German food retail.