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Germany: Penny positions 'Naturgut' as its own organic private label brand

Discount Retail Chain Penny Germany (owned by German REWE Group) sharpens its organic range, Penny wants to score points with price-sensitive customers and still remains far behind its competitor Lidl. Meanwhile, the first stores are getting a new store design.

Do you remember how singer Nena, as Penny's “brand ambassador”, trudged with a group of happy-looking like-minded people through a green urban backdrop, with men with beehives reading newspapers on terraces, others on the balcony of theirs, scented with flowers “It's a fine day” Giant residential gourds stretched sleep out of their arms and construction workers sang operetta-like out of manhole covers?

That was two years ago, and in all its mysteriousness, it's long been a discount story. The aim was to "further increase awareness and acceptance of a natural diet," said the Cologne headquarters about the organic carnival.

Actually, however, attention should primarily be drawn to the Penny own private label brand “Naturgut”, which had already breathed new life into the retail chain in 2015 after a temporary mothballing, in order to “for the first time in the German discount store current nutrition trends such as vegetarian / vegan, regional and organic under one brand together”.

The aforementioned universal positioning was, as already noted at this point, from the customer's point of view, however, rather confusing and Penny also seems to have noticed that in the meantime.

Organic is more in focus

When selected Naturgut products were labeled with the expanded nutritional information Nutri-Score last summer, the message was already explicitly referred to as an "organic private label". In the meantime, Penny is communicating much more emphatically to customers in its advertising that there are "over 200 organic products" to buy under the name Naturgut in the approximately 2,200 stores (but an undisclosed number of them only irregularly).

The slogan “Of course for everyone”, which occasionally dangles from the shelves, becomes “organic for everyone”.

In addition, the packaging is given a new design in a more eye-catching grass green, which also replaces the wooden box look printed on the cardboard boxes on the shelves. And in moving image advertising, it is communicated more clearly: “Our diverse range of natural goods is organic and cheap,” says a new spot.

In response to a supermarket blog request, a Penny spokesman confirmed: "It is correct that we focused on the original positioning of the Naturgut range and that today we are primarily focusing on the 'organic' aspect."

Regional products are now primarily identified by the "regional window" logo on the packaging. There are also vegetarian / vegan Naturgut products, also made in organic quality. Penny recently introduced its own brand “Food for Future” for explicitly vegan products (which then don't have to be organic). And if you look at it long enough, it might make sense too.

At first glance, however, it is still above all: incredibly confusing. After all, Penny remains loyal to the chaos of its own private label brands that it regularly organizes.

While the discounter has been seen as a trendsetter for a number of years in the course of the format modernization, in Cologne one has recently been forced to readjust because competitors are running ahead. The attempt to position 'Naturgut' more clearly as an organic brand was long overdue especially since Aldi and Lidl are engaging in an extremely eye-catching race for potentially more price-sensitive organic customers.

The cooperation with Bioland has catapulted Lidl far forward. At the same time, the initiative also led other retail chains to try to work more closely with cultivation associations in order to also be able to offer (private label) products that go beyond the EU organic standard. See here for more on a private label development

No partner is mentioned on the package

Penny's mother, REWE, has been working with Naturland for a long time and most recently became a member of the Demeter Association. When asked whether Penny also wants to strive for association-certified quality, the company explains: “For many Naturgut products, we already offer our customers food that comes from renowned cultivation associations. However, due to the not consistently available quantities, we do not make any claims on the respective natural good product. "

Which is quite annoying because the quality of the association, which cannot be guaranteed throughout, can only be communicated with great difficulty. Online it says: “Our farmers also undertake to adhere to stricter requirements from various organic associations. You can recognize this by the words '100% Association [s] quality' on the packaging. "

In contrast, Lidl is much better positioned thanks to its Bioland cooperation. (Most recently, "around 80" organic products out of a total of 340 permanently available organic products were communicated there.) “Then the newly branded products appear successively on the shelves. Depending on the lead time for the changeover of the packaging, this will vary depending on the product."

New store design with a fixed number of customers

Until then, however, there will be inconsistencies in the shops. "Bio for everyone" is currently being promoted "from our advertising" at the ends of the shelf. This includes products in the old and the new design. These include sugar lemonades and whiskey iced tea in non-organic quality from the same weekly brochure.

The organic range at Penny has not been particularly wide so far, the torn shelf positioning also tends to make it invisible. And we don't even begin to think about how far this is from the ecotopia once communicated in advertising.

That could change if the stores, as has now been decided, are converted to a new store design that was first tested in the Czech Republic (see supermarket blog) and later in some stores in Germany.

The “Markthalle concept” sounds quite interesting and is characterized by the fact that it provides customers with a fixed route along the individual ranges (similar to Ikea) instead of relying on open transverse rows of shelves as was previously the case. This enables "easy orientation" and product groups can be "thematically grouped" in niches in order to make shopping "more intuitive", according to the Rewe employee magazine "One".

Not enough space for the concept?

Above all, the shopping atmosphere should be improved after Penny had recently looked rather old again against the modernization efforts of Aldi and Lidl.

In order to occupy locations that were (so far) out of the question for the main competitors, Penny had also settled in areas in recent years that required significantly greater flexibility in the arrangement of the range. Imposing a concept on them that seems to be more space-intensive than the previous one does not work. That is why the project team has developed “a 'light” version of the concept, in which only the new fruit and vegetable arrangement and a few other elements would be adopted, “the shelves are still arranged horizontally”.

After all, this is more progressive than going back ten years in time; Whether the design mess is also a smart decision will first have to be proven in Cologne.

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