REWE Group Sustainability Report 2017

Organic and PRO PLANET

GRI 204-FP2: Percentage of purchased volume which is verified as being in accordance with credible, internationally recognized responsible production standards, broken down by standard

PRO PLANET

As a trade company, REWE Group sees its key role as providing customers with high-quality products and services. It is important to REWE Group to offer these in a quality which, beyond the characteristics of the goods, also convince in terms of environmental and social sustainability. With this is mind, REWE Group has developed the PRO PLANET label. This “navigation system for more sustainable products” is a reliable guide for those consumers for whom environmental protection and the social compatibility of products is important when shopping. With the PRO PLANET assortment, REWE Group is seeking to offer products with sustainable added value at attractive prices and to promote sustainable consumption across the board.

In 2017, the PRO PLANET products in individual product groups generated different results. Overall, a sharp increase in the number of PRO PLANET products was seen in Germany. But this fact was not reflected to the same degree in customer contacts and percentage of sales. The reason for this development was that a number of high-volume products lost the PRO PLANET label as part of the planned review process used by the PRO PLANET label. Many of the newly added products are also found in the assortment of toom Baumarkt DIY stores. As a result, they are available in a comparatively smaller number of stores. In 2017, the revenue share for PRO PLANET products in Germany was 10.1 per cent, slightly below the level recorded in the previous year (2016: 11.0 per cent). This decline is due to the fact that revenue from PRO PLANET products has remained about the same, but the total revenue against which the PRO PLANET products are examined has increased.

Overall, however, this metric has moved in a positive direction over the years. A similar trend for PRO PLANET was seen at REWE Group in Austria. Just like in Germany, high-volume products lost the PRO PLANET label, a development which is reflected in a decline in the number of products, customer contacts and revenue share.

PRO PLANET

2015 2016 2017
Customer contacts1 of PRO PLANET products in Germany (G) and Austria (AT)
PRO PLANET (G) 886,566,228 879,086,573 839,221,394
PRO PLANET (AT) 43,473,741 43,974,874 36,748,234
Number of PRO PLANET products in Germany (G) and Austria (AT)
PRO PLANET total (G) 874 957 1,222
PRO PLANET (AT) 280 260 255
Share of gross sales value in Germany (G) and Austria (AT) (in per cent)
PRO PLANET (G)2 11.2 % 11.0 % 10.1 %
PRO PLANET (AT)3 1.33 % 1.34 % 1.26 %
1 Customer contacts are based on scan totals for individual products. Exceptions are fruit, vegetables and flower products. As a result of different data-management practises in IT systems, customer contacts here are determined on the basis of purchased items.

2
The percentage is based on all store-brand products and industry brands in product groups where industry brands were given the PRO PLANET label.

3
The percentage is based on total revenue in food retailing in Austria (including PENNY and wholesale, but excluding ITS and BIPA). Area of application for Germany: REWE including partner retailers, PENNY stores, toom Baumarkt DIY stores; Area of application for Austria: total food retailing (including PENNY and wholesale, but excluding ITS and BIPA)

Organic Products

The various organic product ranges offered by the sales lines of REWE Group all performed well during the reporting period. These gains were reflected in both the number of products and the percentage within the assortment. This positive trend in organic farming can also be seen across Germany: The percentage of organic products in Germany was 4.8 per cent in 2016. For food retailing overall, the figure rose by 14.6 per cent from 2015 to 2016 (German Alliance of Organic Farming: Organic Sector 2017).

REWE

REWE Bio replaced Füllhorn as REWE’s organic store brand in 2013. The product range has been continuously expanded since then. During the reporting period, the number of items was increased once again, from about 500 products in 2016 to more than 520 in 2017 (average during the entire year). As a result, REWE Bio products made up about 4.2 per cent of the assortment’s sales value in 2017. The total rose to 5.8 per cent when the organic products of branded manufacturers are included.

PENNY

At PENNY, the Naturgut brand replaced the organic store brand B!O in 2014. With Naturgut, PENNY unites regional, vegetarian and organic products under one brand name. The share of Naturgut products in terms of sales value is 2.3 per cent and thus has remained stable.

In April 2016, PENNY introduced the Naturgut Bio-Helden as a way to boost organic farming. The brand comprises organic fruit and vegetables that have minor flaws in their shape or skin. Such problems are more common with organic products. But they do not reduce the quality of the products in any way. In the past, farmers have been unable to sell this part of their harvest via food retailers. Instead, they marketed the products to industry at comparatively lower prices or they simply destroyed them. The Naturgut Bio-Helden are not packed in any special way or sold at a lower price. They are simply a fixed part of the organic product range offered by PENNY stores. By selling these products, PENNY plays an active role in the fight against food waste in the upstream production stage. Organic farmers can sell a greater amount of the crops that they produced with so much hard work through retailers and strengthen their economic base in the process. At the same time, consumers are being successfully shown that products with outer blemishes can still be perfect in terms of taste and quality.

Exactly two years after the introduction of the Naturgut Bio-Helden, the Naturgut Junior-Helden were put into PENNY stores in April 2018. Before then, only conventional or organic fruit and vegetables were permanently part of the assortment. This has changed with the introduction of the new brand. These are “in-conversion products” from producers who are transitioning to organic farming. The demand for organic products has been steadily increasing for years and cannot be met by domestic production. One reason for this are legal hurdles. For example, there is a long conversion period for producers who have opted for organic farming. During this time, farmers have to produce organically and therefore at higher cost, but only receive conventional revenues. This is because the goods may not yet be provided with the organic farming label. Therefore, not enough producers are making the transition to keep up with increasing demand. With the introduction of the new brand at PENNY, we are offering a new marketing opportunity to those producers who are yet to obtain an official certificate. The producers receive more revenue than for conventional products, but slightly less than the organic price. This discount is passed on fully to the customers and also communicated on the label. This gives farmers a greater incentive to switch to organic farming. In this way, PENNY is securing organic fruit and vegetables from Germany and Europe over the long term, because the goods receive the organic farming label after the conversion period.

toom Baumarkt DIY stores

toom Baumarkt DIY stores have been selling organic-certified store-brand products for kitchen gardens since 2014. These products include peat-free soils certified by the Bio-Grünstempel® (organic green seal), organic fertiliser, organic herbs and organic vegetables. The assortment comprised over 350 products in 2017.

REWE Group in Austria

With the creation of Ja! Natürlich in 1994, REWE International AG became a pacesetter in Austria. Today, the organic brand generates more than 90 per cent of revenue produced by organic products. PENNY Austria sells organic products under the store brand Echt B!O.

Performance of organic products (in per cent)

2015 2016 2017
Organic products
(store brands and industry brands in gross sales value1, REWE Markt GmbH)
5.1 % 5.7 % 5.8 %
REWE Bio
(in gross sales value1, REWE Markt GmbH)
3.7 % 4.2 % 4.2 %
REWE Bio fruit and vegetables
(in gross sales value of fruit and vegetables, REWE Markt GmbH)
9.9 % 10.9 % 11.6 %
PENNY B!O/Naturgut
(in gross sales value1, PENNY)
2.2 % 2.3 % 2.3 %
PENNY B!O/Naturgut fruit and vegetables
(in gross sales value of fruit and vegetables, PENNY)
6.6 % 7.3 % 7.3 %
Ja! Natürlich
(in gross sales value, Austria Full-Range Stores)
6.6 % 6.8 % 6.6 %
Ja! Natürlich fruit and vegetables
(in gross sales value of fruit and vegetables, Austria Full-Range Stores)
16.4 % 17.3 % 17.4 %
Echt B!O
(in gross sales value, PENNY Austria)
1.6 % 1.6 % 1.8 %
Echt B!O fruit and vegetables
(in gross sales value of fruit and vegetables, PENNY Austria)
5.7 % 5.6 % 4.6 %
1
Excluding near-food and non-food products, tobacco and alcoholic beverages

More topics:

GRI 102-11

Risk Management

GRI 204

More Sustainable Product Range

GRI 204-1

Regional Products

GRI 204-FP1

Raw materials

GRI 301

Materials and Packaging

GRI 304

Biodiversity

GRI 308

Environmental Standards in the Supply Chain

GRI 412, 414

Social Standards in the Supply Chain

GRI 416

Customer Health and Safety

GRI 417

Promoting Sustainable Consumption

FP10

Animal Welfare