Market Overview
Norway
Food & Drinks Industry Day
Thursday 27th November 2008
Contents
•
Norwegian economy
•
Norwegian foreign trade
•
Norwegian food and consumer spending
•
Retail sector
– Definitions
– Major players
•
Catering and foodservice
•
Convenience trade
•
Alcoholic beverages
•
Import, wholesale and service – Major players
•
Trends
•
Reasons for targeting Norway
•
Barriers/Challenges
•
Bord Bia Services in 2009
Norwegian economy
Economy
•
The Norwegian economy grew by 3.5% in 2007. Forecast GDP growth for
2008 is 2.4%, decreasing further to 2.2% in 2009.
•
The 2007 inflation rate was 0.8% and is expected to end up at 3.2% in
2008.
•
Private households spent an average of €46.150 * per year on
expenditure in the period 2005-2007, a real increase of 13 per cent
compared with the period 2002-2004. Households in Oslo and Akershus
spent over 30 per cent more than households in Northern Norway.
•
The unemployment rate was at 2.8% in June 2008.
•
Norway’s population totals 4,7 million, of which 450,000 have an
immigrant background, coming mainly from Poland, Sweden, Iraq and
Denmark.
* Exchange rate 1 € = NOK 7,91
Norwegian foreign trade
Foreign trade
•
Norwegian exports were worth €98,9 billion in 2007 (783 billion NOK)
•
The UK is Norway’s most important trading partner, accounting for 21% of
exports, followed by Germany, the Netherlands, France and Sweden.
•
Norwegian imports were worth €51,9 billion (411 billion NOK)
•
Sweden and Germany lead the import trade, with approx. 14% of imports
coming from each country. They are followed by the UK, Denmark and
China.
Norway trading with Ireland
Million €
Imports to Norway from Ireland
Exports from Norway to Ireland
2002
502,2
738,3
2003
502,2
491,8
2004
592,0
927,2
2005
723,1
1 508,9
2006
726,9
1 748,1
2007
702,4
1 630,7
Norway trading with Ireland
•
Main product groups imported to Norway are
– Machinery, transportation equipment
– Chemicals, related products
– Misc. manufactured goods
– Crude materials, inedible
– Beverage and tobacco
•
Main product groups exported from Norway are
– Minerals, lubricants,
– Chemicals, related products
– Machinery, transportation equipment
– Manufactured goods
Norwegian food import and
export by SITC 2007
SITC
Import
€ million
Export
€ million
3066,2
4866,1
24,9
3,4
110,4
24,5
75,0
82,16
0
Food and live animals
00
Live animals
01
Meat and meat preparations
02
Dairy products and birds' eggs
03
Fish and fish preparations
418,7
4515,5
04
Cereals and cereal preparations
442,6
26,2
05
Vegetables and fruit
858,3
20,3
06
Sugars, sugar preparations and honey
138,9
13,9
07
Coffee, tea, cocoa, spices
285,6
30,4
08
Feeding stuff for animals
438,3
109,9
09
Miscellaneous edible products and preparations
278,5
39,6
497,6
73,5
412,0
63,2
85,5
10,3
297,2
130,3
1
Beverages and tobacco
11
Beverages
12
Tobacco and tobacco manufactures
4
Animal, vegetable oil, fat
Norwegian food and live animals
import and export by country 2007
Import
million €
Export
million €
Denmark
383,2
France
482,7
Sweden
302,6
Russia
462,7
Netherlands
206,5
Denmark
451,1
Germany
192,7
Great Britain
327,1
Spain
181,4
Sweden
314,1
USA
169,8
Portugal
286,4
Italy
126,4
Poland
233,0
Great Britain
121,5
Japan
219,8
Brazil
116,3
Spain
183,8
France
108,5
Netherlands
173,9
Ireland ranked number 36 (€9,6 M)
Ireland ranked number 55 (€3,4 M)
Norwegian food trade with Ireland
•
Main products imported from Ireland to Norway: liquors, whiskies, beer,
(mineral) water, chocolate, sugars and food preparation
•
Main products exported from Norway to Ireland: chocolate products, soups
and broths, sugar confectionary (not containing cacao).
Norwegian food and consumer spending
Norwegian Food
•
Norway is the longest country in Europe. Food preferences vary enormously
from north to south although the most common food in Norway is seafood.
Meals in Norway often include sandwiches or crackers with cheese, salmon,
cucumber, tomato, jam, or herring, Norwegian cheese, coffee, berries, waffles
and pancakes, home baked cookies.
•
Healthy products are of growing interest, especially given that 49% of the
Norwegian population is considered overweight. Norwegian consumers are
also increasingly willing to pay more for healthy and ethical products.
•
The Norwegians ate 8,76 kg of chocolate per capita in 2006 (Ireland 7,17 kg)
and 5,11 kg of sugar confectionary per capita per year in 2006 (Ireland 3,98
kg).
Household expenditure
•
Norwegian households spend increasingly less of their budget on food. An
average household spends 10 per cent of their budget on food, compared with
40 per cent in 1958.
•
Not only does food absorb a smaller share of the budget, the Norwegians also
buy other types of food. The consumption of fish and potatoes (measured in
kilos) has fallen considerably since 1958, and they eat increasing amounts of
meat.
•
There has been a tenfold increase in the consumption of mineral water and
soft drinks (measured in litres) since 1958. The sale of wine (measured in
litres) has also increased tenfold in the past four decades.
Household spending on food
2005-2007
Expenditure per household per year in € and %
Euro
%
01 Food and non-alcoholic beverages
5 230
11,3
011 Food
4 719
10,2
0111 Bread and cereals
746
1,6
1 986
2,4
0113 Fish
312
0,7
0114 Milk, cheese and eggs
775
1,7
0115 Oils and fats
109
0,2
0116 Fruit
415
0,9
0117 Vegetables
510
1,1
0118 Sugar, jam, honey, chocolate and confectionery
494
1,1
0119 Food products
267
0,6
012 Non-alcoholic beverages
511
1,1
0121 Coffee, tea and cocoa
121
0,3
0122 Mineral waters, soft drinks, fruit and vegetable juices
389
0,8
0112 Meat
Household spending in food
2005-2007
Expenditure per household in € and %
Euro
%
02 Alcoholic beverages and tobacco
1 242
2,7
021 Alcoholic beverages
825
1,8
0211 Spirits
159
0,3
0212 Wine
351
0,8
0213 Beer
314
0,7
022 Tobacco
416
0,9
Tax and registration
information
•
VAT on food in Norway is 14%. Food served in restaurants is charged at 25%.
•
Norway heavily protects domestic production with high import tariffs and other
barriers to trade.
•
Norway has additional taxes for alcoholic beverages, non-alcoholic beverages,
chocolate and confectionary and sugar.
•
Trading with live animals, animal products and food within the European
community and EEC, and import from third countries must be registered in the
EU database TRACES (TRAde Control and Expert System). The first part of the
Health Certificate can be filled out electronically in TRACES and then sent to
the Norwegian Food Safety Authority for approval. Import of live animals and
animal products to Norway must be registered in the electronic database
Matilda VAM.
Retail sector
Definitions
The Grocery Retail Market
•
is defined as all food, drink and non-food products (i.e. health & beauty,
pet care, clothing, DIY, electronics, etc) sold through all retail outlets
selling predominantly food in a given market
– This includes the total turnover of hypermarkets and Cash & Carry
stores
– This is a consistent definition applied to all markets.
Store definitions
•
Hypermarket (9,6% market share in Norway) is a retail store selling a
variety of goods in different categories, operating mainly in self-service,
with the sales area exceeding 2,500 m². Food accounts for less than half of
the total area but the focus of sales is on groceries. A hypermarket can be
located in or near city centres, in a shopping centre or in other areas with
good traffic access.
•
Supermarket is a mainly self-service-oriented grocery store focusing on
food, with at least 400 m² sales area and food accounting for over half of
the sales area. In the practical statistics of the sector, the supermarket
stores are divided into the large ones (19,7% market share in Norway)
with over 1,000 m² and small (50,7% market share in Norway) with 400–
1,000 m² convenience stores.
•
Large self-service shops are grocery stores of 200–399 m² while the
small stores in this category have 100–199 m² (19,7% market share in
Norway). The term “corner shop” or “neighbourhood store” often refers to
self-service stores. This group also includes the discount stores.
Norwegian retail
•
Norway’s grocery retail market is worth €13,9 billion in 2007 and grew 5,9%
compared to the previous year.
•
In 2007 consumer prices went up 2.5%.
•
Market dominated by Coop Norge AS, ICA Norge AS, Norgesgruppen and
Reitangruppen.
•
The four leading players hold a combined market share of over 90%. They
also dominate grocery sales through gas stations and kiosks.
•
Lidl entered the Norwegian market in 2004. Retailers responded by opening
new discount stores and developing their own low-priced private label. But as
of June 2008, the activities (50 stores) of Lidl have been taken over by
Reitangruppen.
Norwegian retail
•
The dominant retail chains are involved in grocery trade in other Nordic
countries as well, either through mergers or cooperative agreements.
•
Compared to other Nordic countries, the discount sector has a high presence
in Norway, mostly due to high domestic prices.
Retail sector
Major players
Sales M€ per group
market share in %
Total sales / group
7 000
39.2%
6 000
5 000
23.8%
4 000
17.5%
17.3%
3 000
2 000
1 000
0
Norgesgruppen
Coop Norge
ICA Norge
Rema 1000 Norge
Major players in Norway
2007
Market share
Turnover (million €)
•
Norgesgruppen
39,2%
€ 5 801
•
Coop Norge AS
23,8%
€ 3 526
•
ICA Norge AS
17,5%
€ 2 591
•
Rema 1000 Norge AS
17,3%
€ 2 553
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Coop Norge AS
•
Coop was founded in 1906 as a joint organisation of the Norwegian Cooperative Union and Wholesale Society. Coop has registered more than 1
million members.
•
Coop Norge AS is a subsidiary of Coop Norden and responsible for
purchasing, the supply of goods, chain operations and marketing.
•
Coop Norge has 870 outlets and a turnover in 2007 of €3,5 billion.
•
Coop has taken over Smart Club’s chain of discounted, warehouse-like
retail establishments, including Christiania Gourmet & Catering.
Coop Norge AS
Coop Norge consists of:
•
Marked
•
Prix
•
Extra - first retail chain with all stores having the Swan Ecolabel (June
2008)
•
Obs! – the only hypermarket chain in Norway
•
Mega
Coop Norge
•
Future Priorities
Before the end of 2009, over 700 stores will receive a make-over
•
Private label
Annually Coop sells private label products valued at €543 million. 25% is
produced by Coop Norge Industry AS, covering Coop Kaffe (coffee), Røra
factories (juice, jam) and Goman bakeries (bread and bakery products).
ICA Norge AS
•
ICA Norge AS is one of Norway’s leading food retailers with a total of 642
stores operated either as independent units or as franchises.
•
ICA Norge AS (formerly known as Hakongruppen) is part of ICA AB, a
Swedish retailing corporate group.
•
In 2007, ICA Norge AS reported sales of €2,089 million, 4,348 employees
(excluding the employees in the franchise shops)
ICA Norge AS
•
ICA Norge AS has 4 different store concepts:
1. ICA Naer – convenience stores
2. ICA Supermarked - supermarkets
3. ICA Maxi - hypermarket
4. RIMI - discounter
ICA Norge AS
•
Future Priorities
From December 2007 ICA Norge offers sugar free counters at cash
registers to promote health. Fruit and nuts now replace candy, chocolate
and sodas.
•
Private label - Euroshopper
Norgesgruppen
•
Norgesgruppen
– Norgesgruppen, founded in 1994, is a privately owned company and
Norway’s largest trading enterprise. The core business is grocery
retailing and wholesaling.
– Roughly 56% of shop turnover derives from retailer-owned chain
members, with stores directly owned by NorgesGruppen accounting for
the remainder. NorgesGruppen also cooperates closely with several
independent regional chains and shops.
– Turnover in 2007 was €5,801 million.
Norgesgruppen
•
Norgesgruppen consists of 3 retail concepts (profilhus)
1. Profilhuset Kiwi
- discounter
2. Profilhuset Meny-Ultra
- super supermarkets
Meny-Ultra makes a complete range of grocery products available to
consumers in full-scale, regional superstore settings under the franchise
names Meny, Ultra, Centra and Jacob`s.
3. Profilhuset Kjøpmannshuset - corner shop /supermarket concept
Including Spar, Joker, Eurospar and Naerbutikkene
Norgesgruppen
– In 2006 a number of dissatisfied ICA franchisees switched to Bunnpris
(small discounter), escalating the growth of the chain.
– JOH-SYSTEM AS and the regional ASKO companies supply the retail
chains with dry food, chilled and frozen products, including fresh meat,
tobacco and over-the-counter medicine.
Norgesgruppen
•
Future Priorities
– Focus on operations in the rest of Scandinavia
•
Private label
– The main private label brands at NorgesGruppen are Eldorado and First
price. Eldorado is an international private label brand, also used by
Tradeka in Finland and Axfood in Sweden.
Reitangruppen
•
ReitanGruppen –The Reitan Group is a leading Scandinavian commercial
operator, organizing and operating franchise-based activities in the fields
of low-price trading (REMA 1000) and the convenience trade (7-Eleven,
Narvesen, Pressbyrån).
•
Reitan has only one concept in retail; Rema 1000, but it is the biggest
retail chain in Norway. Rema 1000 has business activities in Norway,
Sweden and Denmark.
•
Rema 1000 Norway has rebuilt the shops around a new design and has
strengthened its focus on fresh food, fruit and vegetables.
Reitangruppen
•
Future priorities – focussing operations on Scandinavia. The purchasing
collaboration with EDEKA (Germany) will be strengthened further.
•
Private label
– The main private label brands are Godehav (fish) and Solvinge (white
meat and eggs).
Private label
•
In March 2008, private label accounted for about 9,8 % of Norway’s total
grocery market, of which frozen and fresh food are in the lead, followed by
beverages and packed food.
http://no.nielsen.com
Major players in Norway
2007
Group
Chain
Store type
Coop Norge
Mega
Prix (incl Extra)
Obs!
Marked
Supermarket
Discount
Hypermarket
Supermarket
145
314
23
368
32,2
29,7
21,8
15,2
ICA Norge
Rimi
ICA Supermarked
ICA Naer
ICA Maxi
Service - Mat/Livi
Discount
Supermarket
Supermarket
Hypermarket
263
79
275
25
118
39,6
22,5
22,2
14
1,7
Norgesgruppen
Kiwi
Meny
Spar
Bunnpris
Joker
Ultra/Center
Eurospar
Other
Discount
Hypermarket
Supermarket
Discount
Supermarket
Hypermarket
Supermarket
420
140
326
180
465
13
21
29,3
21,9
17
8,5
7,9
4,3
2
8,3
Reitangruppen
Rema 1000
409
100
No. of outlets
Market share %
within group
Market share %
by chain 2007
5,3%
9,4%
Marked
Prix (incl Extra)
0,4%
5,4%
Obs!
3,8%
3,3%
5,1% 3,0%
12,6%
Mega
ICA Maxi
1,5%
ICA Supermarked
1,4%
Rimi
0,8%
0,4%
1,5%
ICA Naer
Service - Mat/Livi
Meny
Kiwi
Spar
Bunnpris
8,5%
Joker
17,3%
Ultra/Center
Eurospar
11,6%
6,0%
Other
Rema 1000
Number of outlets 2007
Marked
420
Prix (incl Extra)
140
326
Obs!
118
Mega
180
275
ICA Maxi
ICA Supermarked
Rimi
ICA Naer
Service - Mat/Livi
263
465
Meny
Kiwi
Spar
79
13
25
21
145
23
409
314
368
Bunnpris
Joker
Ultra/Center
Eurospar
Other
Rema 1000
Catering / Foodservice
Catering / Foodservice
Umoe catering AS
•
Umoe Catering AS
– Umoe Catering is Norway’s leading chain of service establishments with a
an annual turnover of €253 million (NOK 2 billion) and a staff of 4,000
divided between 205 restaurants and cafés.
– Umoe Catering is owned by Umoe AS. The Umoe Group is a family owned
company historically running business in the maritime and ship-owning
industry. Umoe Catering also owns 50% of Togservice Norge AS (together
with Rail Gourmet Holding AG, subsidiary of Compass International).
The company’s subsidiaries are:
– Peppes Pizza AS, established in 1970, 4 million pizzas per year
– King Food Norge AS (Burger King)
– American Bistro Scandinavia AS
– Café Opus,
– La Baguette AS
– Pubcompaniet AS
Catering / Foodservice
Servicegrossistene
•
Servicegrossistene
– Servicegrossistene AS is the second largest wholesaler group in the
Norwegian Horeca and catering market.
– The company has 23 owners, all with own warehouses.
Servicegrossistene serves over 3,500 customers ranging from hospitals,
cantinas, hotels, restaurants and fast food restaurants. The total turnover
is €150 mill.
– Servicegrossistene also supplies products for vessels and the offshore
industry.
– Purchasing is taken care of by Systemkjøp Norge BA.
Catering / Foodservice
Norrein Gruppen / Egon
•
Norrein Gruppen
– Egon is part of Norrein Gruppen, founded in 1981, owning 4 hotels, 2
restaurants and 27 Egon restaurants in Norway.
– Egon is a Norwegian chain of restaurants serving traditional dishes and
drinks.
Convenience trade
Convenience trade
Reitan Servicehandel AS
•
Reitan Servicehandel AS
– Reitan Servicehandel, part of Reitangruppen, is a leading Scandinavian
retailing group, that specializes in franchise-based convenience retail
businesses.
– Reitan's retail brands include 7-Eleven in Scandinavia, Narvesen chains
(Norway) and Pressbyrån (Sweden).
– Reitan Servicehandel serves 200 million customers and has over 1,500
outlets. It also has a market share of 32,4% and a turnover of €1,25
billion (NOK 9,9 billion).
– The company has acquired Hydro Texaco and entered a joint venture
agreement with Shell. 7-Eleven will take care of the kiosks at YX gas
stations (taken over by Shell).
Convenience trade
NorgesGruppen Servicehandel
•
Profilhuset Servicehandel (Norgesgruppen)
– 1,100 sales points including kiosk, gas stations and restaurant chains
Includes:
– Mix Kiosk* (kiosks, 695 kiosks)
– Deli de Luca Storkiosk (mix between shop and deli, 27 shops)
– Kaffebrenneriet Kaffebar (coffee shop, 17 locations)
– Big Horn Steak House restaurant (28 restaurants)
– Bon Appétit Gatekjokken (fast food, 23 locations)
– Dolly Dimples (Pizza restaurant, since 1986, 84 restaurants)
– Jafs Gatekjokken (fast food, 47 locations)
– Le Café Kafé (coffee shop, 19 locations)
* NorgesGruppen owns the store concept, not the stores
Alcoholic beverages
Alcoholic beverages
Vinmonopolet
•
Vinmonopolet is an independent, entirely State-owned company, founded in
1922, with the exclusive right to retail wine, spirits and strong beer (>4,75%)
in Norway.
•
There are 222 Vinmonopolet outlets in Norway (December 2007).
•
The products are purchased through importers (210 companies – Sept. 2008)
holding the required license. The list can be found on www.vinmonopolet.no
•
Vinmonopolet buys approx. 250 – 300 new products each year, being
launched the first Saturday of every other month; from January to November.
•
Vinmonopolet has no own production but buys from the also state-owned
company Arcus AS.
•
Fact: Vinmonopolet stocks 30 different items of Irish whisky in its range.
Alcoholic beverages
Arcus
•
Arcus AS is the largest supplier in Norway of wine and spirits to Vinmonopolet
and the Horeca (hotel and restaurant) trade. Arcus AS is currently the only
distiller in Norway and has more than 80 years of experience as a supplier
and producer of wine and spirits.
•
Arcus imports spirits such as brandy, cognac, armagnac, Dutch gin, whisky,
rum and tequila.
Import / Wholesale
Import / Wholesale
NorgesGruppen / ASKO
•
NorgesGruppen / ASKO
– ASKO is Norway’s largest wholesale business, with almost 2,200
employees and sales in 2007 of €3,9 billion (NOK 31 billion). The
wholesaling business delivers to grocery retail, institutional household,
newsstand merchandise and service business market segments.
– The assortment consists of 22,000 product lines and the company has
about 13,000 customers.
– ASKO is also one of the country’s largest transport enterprises.
– In April 2008, NorgesGruppen / ASKO and Statoil Norge signed a
wholesaler agreement for the distribution of food and newsstand
merchandise.
Import / Wholesale
Unil A/S
•
Unil
– Unil A/S is NorgesGruppen buying and marketing organisation for private
label products. The company is responsible for the distribution and
marketing of the products. The company has over the last 40 years built
Norway’s strongest private brand for food and food-related products. The
brand awareness for the Eldorado brand is 95%.
– Unil A/S is fully owned by NorgesGruppen.
Import / Wholesale
Haugen Gruppen
•
Haugen Gruppen
– Haugen Gruppen is one of Norway’s leading providers of international well
known brands within foods and beverages, being no. 1 or 2 in almost
every category.
– The company is active in grocery products, food service and wine and
spirits.
Import / Wholesale
NorgesGruppen / ASKO
•
NorgesGruppen / ASKO
– ASKO Servicehandel supplies kiosks and small shops serving
approximately 2,300 customers.
– ASKO Storhusholding supplies products to gas stations, cantinas,
cafeterias and hotels
– STORCASH 7 Cash & Carry stores
International partners
•
Coop Trading
– Coop Trading is the inter-nordic procurement company for Coop in
Denmark, Norway and Sweden. The head office is located in Denmark.
Trends
•
Focus on healthy food – low fat and reduced sugar
•
Multinationals establishing a foothold in Norway
•
Domestic players becoming active abroad
•
Regional producers providing local specialities
Reasons for Targeting the
Norwegian Market
•
Norway has one of the highest per capita income levels in the world
•
It has empathy with Ireland and Norwegians have a favourable image
of the Irish food and drink culture
•
A concentrated retail sector with links to the other Scandinavian
markets
•
Prices and potentially margins are high
Barriers & Challenges
•
Norway is outside the EU and imposes punitive import taxes on most
categories of agricultural produce and in a more selective way, on
most processed foods.
•
The currency is the Norwegian Kroner which is now suffering from the
economic turmoil across the world.
•
Regulation – for example, the off-trade sale of alcohol is regulated for
alcohol over 4.7%.
•
Transport Costs and Distribution
Bord Bia Services
•
Market Information & Trade Contacts
•
Research tailored to company requirements
•
Mentoring Service to enter and grow the market
•
Contact Bord Bia Head Office:
– Frank.murray@bordbia.ie
– Mobile +353 87 7680567