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Belgium's leading distributor's brand thrives on stiff competition.

GB coffee interests and activities form a relatively small but quite dynamic and respected sector of one of Europe's larger retailing groups. That is to say that they relate directly to coffee sales-- of GB's own private label products and too of national/regional coffee brands--in 150 GB super and hypermarkets throughout Belgium.

These stores command the leading position in food retailing in Belgium, followed by Delhaize, Colruy, Aldi and Makro. The chain itself is a wholly owned subsidiary of GIB Group, Brussels. GIB had total sales of 204 billion Belgium francs in 1990, and has multinational operations throughout the EEC and USA.

As for coffee in Belgium, GB stores handle 17% of the retail market. Their shelves offer a range of eight national brands of roasted coffee, plus the major regional names such as Beyers and Miko. The range runs through the gambit of roasted coffees, brick packs and tins, single service coffee filters (a Belgium specialty gaining international market attention), decaffeinated, instant and freeze dried coffees.

The GIB Group has more than 900 items in its private label line. Nevertheless, coffee is far from being lost in this multitude of articles The GB private label coffee products account for 40% of all coffee sales in the stores. The GB label by itself holds about a 7% share of Belgium's national retail market in roasted coffee, 6% of the national market in coffee filter packs. The Group management sees coffee as a 'pull' product and obviously takes care and pride in the standards of its private label production.

As well, Belgium's private label coffee market is very demanding. It controls from 30-35% of the roasted packaged coffee market. All major food stores have private label coffees, although most are buying ready-for shelf packages from private label coffee specialists. GB, however, along with the other leading retailers, handle the buying and production themselves. Until quite recently, for example, GB actually owned its very own coffee roaster plant in Belgium. Now production has been contracted to plants in Berlin and Belgium, but with all details of buying, blending, packaging managed from headquarters in Brussels.

The man in charge of the coffee program at GB is Jacques Franchois. He has been with GB since 1986. Franchois earned his 'coffee' education at Douwe Egberts in Brussels--the hard way, six years in the cupping room. Now Franchois is cupping for his own line of coffees.

Franchois is buying via traders and directly from Colombia's Federation. He works with both Belgium and international trading houses. He maintains enough suppliers to monitor competitive pricing. GB policy is to be covered for three to four months of coffee operations. But Franchois has an eye out for opportunities, and with the right one can go up to six months of coverage.

GB blends require seven to eight origins, Colombia typically being number one, followed by Brazil, Kenya, other East African, some Honduras and Costa Rica, some Haiti. Only about 2% of purchasing is in Robusta--described by Franchois as an-above-average Zaire, with which he is pleased. All buying is on CIF. Control is strict, with sampling on arrival before acceptance, and on finished products.

Something now giving the GB program an added dimension, in buying and roasted coffee production, is the company's membership in the Euro Group; a consortium of leading food retailers from various European nations that have mutual commodity/private label interests. Along with GB, Euro Group members include Vendex in the Netherlands, Coop in Switzerland, Parisdoc in France, Rewe in Germany. These companies take care of their coffee programs in varying ways: Vendex buys shelf-ready products provided by other Euro Group members and also by Drie Mollen (a private label coffee specialist); Coop still has its own plant; Parisdoc is supplied uniquely from France; Rewe buys shelf-ready products and so again the producing members of the Euro Group can be in competition for this order. Euro Group is based in Koln, Germany.

GB products are packaged as Exquis--its top of the line brand family--a mid-range family under the GB name, and a no-name or white label range. By itself the Exquis line is impressive, it includes Espresso, Tradition, 100% Colombia, 100% Colombia Decaf, 100% Colombia 'Popayan Supremo" and a 100% Marogogype label. These are sold in vacuum brick packs and tins.

Sum private label GB roasted coffee sales come to 2,500 tons per annum. More than 75% of the private label sales are in the mid-range level, with the GB name. According to Franchois, the filter packed coffee and decaf segments are steady (decaffeinated coffee already represents 11-12% of the Belgium market). The espresso segment continues to grow, but slowly. Real growth has been seen in the new 'mild' sector, something that has spread to the Belgium market from Germany where it has long been a fixture of the retail market. Mild here is in the sense of naturally mild coffees. Since becoming a market factor last year, the 'mild' segment has already taken almost 4% of the total market.

In the specialty area, GB buys its own green coffee for its private label decaffeinated products--processed by Cofex in Strasbourg. The company acquires shelf-ready freeze dry, spray-dry and freeze-dry decaf products to complete its private label range. The GB single service coffee filters are made by Sas in Belgium, annual sales come to 600,000 boxes of 10.

Although tea sales are much less significant by volume in Belgium, GB has its own 'New Delhi' label in loose tea and teabags. These are supplied directly from India. GB stores account for 23% of all tea sales in Belgium, and of this about 25% is of the New Delhi line.

Regarding changes that will impact on the market, perhaps the most drastic for GB and other coffee-tea retailers/private label marketers is EEC package standardization. This entails extensive repackaging and changes in image, etc., but ought to help minimize space loss in warehousing, transportation and on store shelves.
COPYRIGHT 1991 Lockwood Trade Journal Co., Inc.
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Author:Bell, Jonathan
Publication:Tea & Coffee Trade Journal
Article Type:Company Profile
Date:Aug 1, 1991
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