Global and local procurement at Metro

Metro’s global sourcing of fruit and vegetables for its main product categories takes place in its Valencia Trading Office (VTO), from where it serves most of the Metro shops in 28 countries worldwide. The trading office acts as a centre offering support in category development, focusing on direct sourcing, food safety and supply chain control, while offering strategy, guidelines, new concepts and country support.

Continuity is important in the sourcing process.

“The Valencia Trading Office is looking to give a 12 months’ solution,” said Ward Verbeeck, from the VTO.

Spain is its main sourcing area for fresh produce but other sources, though smaller in volume, are growing fast, such as Italy, Belgium and the Netherlands. Greece is the exception, with negative growth, where the effects of the Russian ban are visible.

The customer is central to Metro in the sourcing process: “We spend a lot of time getting to know our customers,” Verbeeck said. Metro focuses on HORECA—hotels, restaurants & catering—which with 52 %, is its largest segment and “our main focus in most countries.”

Another key customer is the trader, such as wholesalers, kiosks and petrol stations. They make up 19 % of Metro’s customer base. Another 29 % is taken by institutions like industries and office-based services, and services, which include healthcare and wellness.

Tomatoes: a prominent category

Tomatoes have a prominent place in the fruit and vegetable segment, being responsible for a large chunk of turnover. In fact, “tomatoes are the most important category in fruit and vegetables,” Verbeeck said.

For Metro Cash & Carry, the turnover in fruit and vegetables (excluding potatoes) totals €1.6 million. Tomatoes have a 7.8% share in that, for a value of €140,000. For the VTO, these figures are respectively: €175,000, a share of 9.5% with a value of €16,500, according to Metro Group figures.

In terms of types, Verbeeck said the share of vine tomatoes is stable and loose tomatoes are the biggest group, but that segmented tomatoes are becoming more important. The Metro tomato assortment is built around customers’ needs. To cover the basic needs there are tomatoes with obvious criteria like good quality and freshness, a good price and food safety.

To meet what Metro calls the differentiation, they need to offer authenticity, innovation and fun. And then there is the customer with premium needs which are met by niche products and exclusivity under a more tailor-made approach.

Authenticity & seasonality

“What we learned from the extensive contacts we have with our customers is that authenticity and seasonal products are becoming more and more important,” Verbeeck said. He sees a tendency for customers to go back to the source and a greater interest in taste and old varieties.” The customer wants to experience the real tomato,” he said.

Metro indicates this is not occurring only in the West, but is an international trend. Also important are the innovations and solutions customers need and which Metro is aiming for. For instance, a tomato is now on offer that does not leak and is thus perfect for sandwiches, since it avoids soggy rolls

 “We discovered the right variety, making the sandwich better and increasing sales,” Verbeeck said. Another trend Metro sees with HORECA customers is they are always looking for new things to bring to their customers. “So we look for them to achieve differentiation in taste, shape and the experience,” Verbeeck said. “These are the trends we aim for. These are the future.”

METRO at a glance

Metro Group, based in Düsseldorf, is a leading international retail company. Worldwide, around 250,000 employees dedicate themselves to optimally meeting their customers’ expectations. Metro’s operating business focuses on self-service wholesale trade, consumer electronics shops, hypermarkets, department stores and online trade. There are 3 independent sales lines within the group:

• METRO Cash & Carry is a leading international player in self-service wholesale trade;
• MediaSaturn concentrates on consumer electronics shops in Europe;
• and Real is one of the leading hypermarket companies in Germany.

With their products and services, the sales lines serve professional and private customers in 31 countries in Europe and Asia. Metro’s focal points include customer needs and expectations, as well as growth in all segments of the group.

This article was originally published on page 27 of edition 145 (Sep-Oct 2016) of Eurofresh Distribution magazine. Read more retail and other fresh produce news from that issue online here: www.eurofresh-distribution.com/magazine/145-2016-sepoct