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Bord Bia

PICNIC Basket Unloaded- The App-Based Retailer's Surge in Growth

27th October 2020

Niamh O'Connor, Bord Bia Fellow, Bord Bia - The Irish Food Board

The disruption caused by Digital Innovation has been accelerated by COVID-19 and increased consumer need for adaptability and positive transformation from retailers and their favourite food brands (WEF; 2020). Until recently, some food players have been slow to adopt technologies like the Internet of Things, artificial intelligence, blockchain and, even direct to consumer webshops; however, some companies are beginning to experiment and fully integrate digital into their business models.

 

The Netherlands, which is ranked as a global leader in ICT from the World Economic Forum's Global competitiveness index, has had some developments in retail technology which have facilitated both growth and admiration (Schwab; 2019). For example; the Nutriscore food filter has empowered consumers to take better control of their consumer nutrition; blockchain has increased supply-chain efficiency; QR codes have been present on packaging to evidence responsible sourcing journeys, and some innovators in the space are operating exclusively at an e-commerce capacity.

 

While most retailers visualise the future of retail entailing a blend of both online and offline channels, Picnic, a Dutch founded supermarket has revolutionised the debate by boycotting the store-front in its entirety. The idea for Picnic started when the firm's founders saw the growth of online shopping for clothes, electronics and other goods and realised that no one was doing the same for food (Iamsterdam; 2020).

 

Picnic is an online, app-based supermarket that delivers groceries to customer's homes free of charge. It can simultaneously offer consumers groceries for the lowest price with a free delivery due to the absence of a store-front which ultimately lowers operation costs.

 

Picnic delivers groceries that have been picked up locally using electric vehicles that do not go faster than 50KMPH, and they use a set route, a concept they've dubbed Milkman 2.0 (Bloomberg; 2020). Joris Beckers, the company's co-founder, has stated their "aim is [to] create a sustainable infrastructure for food delivery". While food is their entry point, they are building a more extensive e-commerce infrastructure which could allow consumers to return fashion or other goods via Picnic. For example, they have been engaging in trials with Zalando.

 

Although Picnic originally started in 2015 with only four delivery cars, today there are over 800 vans operating in more than 70 Dutch towns and in the West of Germany, where it expanded operations in 2018 (DutchReview.com; 2020). The web super was named the fastest-growing company in the Netherlands in 2019 and currently has a forecasted CAGR growth rate of 73.1% between 2019-2022 with sales estimated to reach 1,121 million (ECE; 2019) (IGD; 2020). At the moment Picnic has 0.76% of the overall Dutch retail market (IGD; 2020).

Although Picnic was originally a member of the Dutch purchasing organisation Superunie, where it bought through member Boni, Picnic partnered with German Edeka (largest German retailer) to set up a new European purchasing platform called Everest. Both Picnic and Edeka plan on doing all purchasing; fresh, private label and A-brands, via the Everest platform which shall be HQ'd in the Netherlands. Through the development of their own Picnic Brand, they plan on labelling products in French, German, English and Dutch, and the online supermarket is planning to expand into France and Britain. The Co-founder stated; 'We are already active in the Netherlands and Germany with success… so why would it not work in England, France, Spain or Poland?' (Distrifood; 2020).

 

Insights for suppliers interested in prospecting Picnic?

 

If seeking a listing with Picnic you may want to consider the following:

 

  • How could you reformat your product to better fit into one of Picnic's crates? For example; toilet paper on a shelf wraps wide for visibility; however, when ordering online, it is preferred in a square shape as it fits better into the basket. Or minimising packaging for cornflakes, which uses a large box, and is half air. Therefore, practicality trumps traditional shelf aesthetic.

 

  • How could you build your digital presence to showcase your appreciation and understanding of their channel?

 

  • How can you demonstrate you are committed to sustainability and the circular economy (sustainability is a driving priority for Picnic)?

 

  • How can you show you are a reliable supplier and can support Picnic to deliver their customers the perfect service? For example; have you been awarded in your exporting abilities? Or, have you got an innovative product that speaks to the needs of their target consumer?

References

Ardia-Wenink, A., 2020. Picnic Will Sell Its Own Brand Products - Marketingspark. [online] marketingSpark. Available at: <https://marketingspark.nl/picnic-will-sell-its-own-brand-products/> [Accessed 20 October 2020].

Digital Transformation. 2020. Digital Transformation Initiative. [online] Available at: <https://reports.weforum.org/digital-transformation/> [Accessed 20 October 2020].

Erasmus Centre for Entrepreneurship. 2020. Top 250 Scale-Ups 2020 | Erasmus Centre For Entrepreneurship. [online] Available at: <https://ece.nl/top250scaleups2020/> [Accessed 20 October 2020].

Garstenveld, P., 2020. Distrifood. [online] Picnic exchanges Superunie for Edeka. Available at: <https://www.distrifood.nl/formules/nieuws/2020/09/picnic-verruilt-superunie-voor-edeka-101138414> [Accessed 20 October 2020].

Picnic: next-level supermarket. 2020. Picnic. [online] Available at: <https://www.iamsterdam.com/en/business/key-sectors/ict/testimonials/picnic> [Accessed 20 October 2020].

Retailanalysis.igd.com. 2019. Picnic Develops Its Range And Services. [online] Available at: <https://retailanalysis.igd.com/news/news-article/t/picnic-develops-its-range-and-services/i/21918> [Accessed 20 October 2020].

Schwab, K., 2019. The Global Competitiveness Report 2019. World Economic Forum, [online] Available at: <http://www3.weforum.org/docs/WEF_TheGlobalCompetitivenessReport2019.pdf> [Accessed 20 October 2020].

Syed, S., 2020. Milkman Concept Revived By Dutch Online Supermarket Seeking Edge. [online] Bloomberg.com. Available at: <https://www.bloomberg.com/news/articles/2020-01-06/milkman-concept-revived-by-dutch-online-supermarket-seeking-edge> [Accessed 20 October 2020].