Last updated on April 14th, 2017 at 09:41 am
Ahold Delhaize CEO Dick Boer pointed out some accomplishments from the company’s U.S. businesses—Stop & Shop, Hannaford, Peapod and Food Lion—as he addressed the company’s general meeting of shareholders on April 12 in the Netherlands.
This was the first shareholders meeting since the merger of Ahold and Delhaize in July 2016, and Boer said the company continues to use “Better Together” as its “logical recipe for success, as a compass to guide us.”
To create a strategy for the merged company, Ahold Delhaize looked at the strengths the companies had developed over their combined 280 years of operation, including customer relationships, products, innovation and logistics and coupled that with “the broader external trends we see developing across the world and in our markets.”
One trend is consumers’ continued focus on value, he said.
“That is not only driven by an increased budget-consciousness in the wake of the economic crisis; being frugal is the new normal and it is easier than ever to compare prices online,” Boer said.
As an example of how the chain is addressing this, he cited Food Lion’s Easy, Fresh and Affordable strategy.
A second trend is convenience.
“Customers—and Millennials, in particular—have busy lifestyles and still want to eat healthy and sustainable food. So this clearly drives the popularity of fresh, ready meal offerings, sometimes consumed now in store or office and sometimes later at home,” he said.
Boer cited Hannaford’s innovative store in Bedford, New Hampshire, as one that is offering added convenience. It offers “made-to-order food (customers) can take out or enjoy at the store and fruits and vegetables cut at their requests. The store has a pickup point for shopping done online. Learnings from this great store will be deployed in other remodels,” he said.
A third major trend is health and well-being.
“Diet-related diseases like diabetes and obesity are a growing global issue,” according to Boer. “And on the other hand, more and more consumers are more conscious of the impact of food.”
All of the company’s retail banners are working on product reformulation, cutting back on salt, sugar and fat. For example, Ahold USA took out more 272,000 pounds of sugar from products—the weight of 30 school buses—in 2016. Delhaize cut 25 percent of salt from 11 varieties from bread.
The Guiding Stars program that originated at the company’s Hannaford stores to provide a nutritional navigation system will be adopted by more Ahold Delhaize brands.
Finally, Boer said, “customers demand relevant and personalized offers and information. And they want access to it at all times, (which is) a possibility since we are going digital.”
Boer set a goal of doubling online sales by 2020, noting Peapod launched its own-brand line of fresh meal kits.
In terms of the competitive landscape, “we see consolidation, we see new competitors coming in and our traditional ones are upping their games as well,” he said. “We not only need to adapt constantly, we need to predict the next change and lead the way.”
Part of the adaptation process is operating smarter and more sustainably, he indicated, noting that operational savings can be invested into company growth as well as savings for shoppers.
In addressing food waste, Boer noted that Stop & Shop in Massachusetts built a green energy facility that turns inedible food into clean energy that powers one of the company’s distribution centers.
Boer said the company will continue to focus on promoting healthier living, reducing food waste and creating a healthy and inclusive workplace. He set some targets for 2020, including 45 percent of “own brand” sales coming from healthy products and reducing food waste by 20 percent.