Rewe: Private Label Pioneer
Rewe opened the first green supermarket building in Germany in November 2009.
One of Germany’s private label pioneers, Rewe today pursues a clear four-brand strategy.
Rewe has a long history of private labels – the introduction of private labels was first mentioned as far back as in its 1948/49 annual report. Since then, Rewe has remained a pioneer in the German private label landscape: In 1988, it was the first supermarket chain that introduced an organic range. And in 2006, it was the first major grocery retailer that used the store fascia as an umbrella brand for a private label range - since then, both market leader Edeka and hypermarket chain Real,- have followed with a similar approach. And while the premium brand Feine Welt, introduced at the end of 2009, was not the first of its kind, it is currently easily the most extensive and best presented premium range in the German PL market. Rewe’s current marketing slogan is Jeden Tag ein bisschen besser – Every day a little bit better. While a cynic may ask why go to Rewe today when it will look even better tomorrow, there is actually a lot in Rewe’s PL offering which should prevent consumers from misconstruing the slogan in this way.
Four Brands
Rewe is pursuing a clear four-brand strategy: Ja! is its discount brand, Rewe its mid-price quality brand, Feine Welt its premium brand and Rewe Bio! is its organic brand. Ja! and Feine Welt have a clear brand identity terms of packaging design, while the design of Rewe products is more similar to branded products, although the red Rewe logo is clearly visible on them. In stores visited by PLI, shelf markers were only used for Ja!, but all PL brands feature prominently in weekly store leaflets. This also includes temporary price reductions, mainly for products from the Rewe range.
Occasionally, the Rewe Bio and Feine Welt are promoted in special brochures that can be picked up in the stores. All four brands are profiled on Rewe’s website (www.rewe.de), while in addition Feine Welt as an own separate website (www.rewe-feine-welt.de).
At the beginning of the year, Rewe had upped advertising for its private labels, launching a TV campaign promoting both Feine Welt and ja!. The ja! campaign, under the slogan “Keiner ist billiger” (Nobody is cheaper), challenges consumers to directly compare ja! prices with those of leading discounter Aldi. “We want to show that prices in a Rewe supermarket are as competitive as in a discounter. For long-lasting success, focus on price alone is not sufficient, the quality has to be right, too,” said Marcus Haus, Rewe’s marketing executive.
As part of the “Nobody Is Cheaper” marketing claim, prices are adjusted the next day if necessary, like for this ja! still mineral water.
Rewe’s approach does seem to be the right one - ja! sales were up “in the double digits” in the first half of 2010 according to Rewe, with combined private label sales accounting for some 25% of Rewe’s total sales. And in a study by Düsseldorf-based management consultancy Batten & Company, ja! came out top as Germany’s best-known and strongest private label brand, followed by Edeka’s Gut & Günstig and real,’s TiP (meaning the top 3 consist of Germany’s three large price-entry ranges). However, the Rewe mid price range came in sixth place, making it the highest-scoring non-entry level grocery brand. This vindicates Rewe’s strategy of using one strong umbrella brand rather than a multitude of brands with no relation to the store fascia, which had been common in Germany prior to the 2006 launch of the Rewe brand.
Ja! Brand
Ja! was first launched in 1988 and currently consists of some 400 products across both food and non-food. As part of the “Nobody Is Cheaper” marketing claim, an independent company daily compares ja! prices with competitors, and prices are adjusted the next day if necessary. Products that had their prices changed are displayed on the website, and the results of the price check – a list of all ja! products and their prices – can be downloaded from the website. Therefore, and reflecting the low German price level at discount, ja! products can be a substantially cheaper alternative to branded products. For example, a 1.5 liter bottle of ja! cola is €0.29, while a 1l bottle of Coca Cola is €1.05. A 450g of strawberry jam is €0.89, while a market leading brand Schwartauer is €1.89 – Rewe-branded jams are €0.99 for a 340g jar. A 750g box of Honey Wheats is €1.89, while the lowest-price Kellogg’s products such as Frosties are €3.79 for 600g. A 200g pack of mozzarella is €0.49 compared with €0.99 for Galbani’s Santa Lucia. A 100g tablet of milk chocolate is €0.35 compared with €0.85 for Ritter Sport. Frozen salami pizza is €2.49 for a pack of three pizzas (350g each), while the market leading brands cost around €2.49 for a pack containing just one – the Rewe-branded pizzas are all €1.89. A 300ml bottle of shower gel such as Apricot & Almond Shower €0.89 while leading branded ranges are around €1.49 for 250ml, and a box of forty seven-in one dishwashing tablets is €3.19, compared with €5.45 for Henkel’s Somat 7-in1.
While the ja! design is pretty basic and not very appealing, Rewe also makes a claim of high quality for all ja! products, and several products have passed quality tests by consumer organizations such as Stiftung Warentest with excellent results.
Rewe and Rewe Bio!
The Rewe brand was introduced in 2006 and replaced a multitude of previous brands such as Salto, Erlenhof and Today. It currently consists of some 700 products, making it by far Rewe’s largest PL range. Rewe claims products are nearly indistinguishable from branded products in terms of quality and/or taste, while prices are lower. While many products are copies of branded products, the range also includes some innovations: for example, the frozen pizza range has a salmon variety, which is not available in within the two leading brands, while in jams Rewe offered a limited edition summer variety (Lemon & Lime) which was not available within the leading branded ranges.
Rewe’s activities in the organic segment began in 1988 with the Füllhorn brand, which was substituted by Rewe Bio! in 2009. It covers most of the standards that are included in most organic private label ranges by rivals, including dairy products such as milk, various yogurts, butter, mozzarella and various packaged cheeses, eggs as well as cereals and muesli, sunflower and olive oil, packaged charcuterie products, frozen vegetables and some fruit such as raspberries. But the range also includes a number of unique products. For example, Rewe is the only player to offer frozen ready meals, with varieties such as Swabian Noodles with chicken and vegetables, Pasta Farfalle with Pesto Rosso and cherry tomatoes and chicken curry. Two further unique products are two chilled Italian-style specialties: Filled Gnocchi (alternating varieties are Basil Pesto and Gorgonzola) and Cappelletti filled with Spinach Ricotta. Rewe Bio also includes a small range of spices (black pepper, sweet paprika and oregano). Of course, conversely there are also some products that are unique to private label ranges by competitors and not included available within Rewe Bio. For example, Edeka has a selection of savory breadspreads, which Rewe does not offer.
Feine Welt
Rewe’s salmon Pizza Classica variety is not available in the two leading brands.
Feine Welt was launched in October 2009. Initially consisting of some 100 products, it has now grown to some 125 products. The underlying concept is to offer specialties and innovative product creations from all over the world, illustrated by the brand’s “Expedition Genuss” (“Expedition Indulgence”) slogan. Competitive prices are another key selling point, as Rewe says Feine Welt prices are some 15% below comparable premium brands. However, for many Feine Welt products there is no direct branded equivalent. Feine Welt products can be found throughout the store, but also on specifically dedicated Feine Welt prime front site shelves (usually one per store).
Feine Welt covers a broad spectrum of products. This includes breakfast cereals such as Golden Almond or Tropical Morning (€2.49 for 400g), jams such as Alsace Plum or Danube Cherry (€1.49 for 250g) and various spreads including Chocolate, Milk & Coconut Pistachio Nut (€1.99 for 200g). Antipasti (sold in jars) include Sicilian Olives and South African Pepper Balls (€3.29 for 250g) filled with a chili & orange cream. Pasta products include dry pasta, such as Alsace Pasta (€1.59 for 400g), as well as four varieties of chilled filled pasta (for example Gorgonzola & Pear and Truffle & Mascarpone), as well as pasta sauces.
Products in cans include Whole Yellow Campania Tomatoes (€2.19 for 425g) as well as various soups. The drinks range includes various directly pressed juices, such as Sicilian Blood Orange, Merlot Grape and Cox Orange Apple (all €1.99 for 0.75l), as well as various herbal and black teas and coffee. Other Feine Welt products are sweet and savory biscuits and chilled desserts such as tiramisu, while ice cream varieties include Vanilla with Pumpkin Seeds and Orange Sauce and Coffee with Cardamon and Chocolate Bits.
