October 18, 2022

United Nordic comes to SIAL Paris 2022 with a big team and big ambitions

The powerful Scandinavian food buying consortium is owned equally by Dagrofa (Denmark), Axfood (Sweden) and NorgesGruppen (Norway), with annual total sales of approximately €20 billion

Find out what makes this influential buying group tick and what it is looking for at the show. Managing Director, Steinar Halvorsen, speaks to SIAL Daily.

After the trials of Covid, what, in particular, made you come to SIAL Paris 2022 this year?
As a major buying group, we have come to SIAL with a big contingent to look for innovations and to meet with suppliers. We are here with a team of more than 40, so among Scandinavian markets we are one of the largest groups here. We come to the flagship Paris show because it is a key event in the food and drink industry calendar.

And what are your impressions of the event now that it’s back after the downtime due to Covid?
I was happy to see so many suppliers and they seem very glad to be back. The atmosphere is friendly at the counters and the fair looks fresh. We know many of the suppliers, some who have been coming for more than 20 years. Overall we have good and positive feelings.

That’s a nice, upbeat assessment. Are there any changes compared to the pre-Covid show in 2018?
The big difference is the price increases that have come in – pretty much in all categories. But these are not under discussion at the fair itself. Here, we are looking for innovation and developing and consolidating partnerships with our suppliers. We don’t talk about the price increases at the show as there isn’t enough time in a 30-minute meeting; it’s not the right moment for that. We are more focused on new launches and potential new partnerships, and just the fact of the industry being back to normal business.

So with around 40 buyers, are they looking at pretty much all categories at the show?
All our buyers are specialists in their areas. For example, we have a team looking at fresh meat, so they are all in Hall 6, a team for dairy products and cheeses, and specialists in dry foods and so on. They are all looking for new suppliers and new products though, of course, much of their time will be spent seeing old friends and existing clients as this may be the only time in the year when we meet them. It’s an opportunity to talk about logistics, deliveries and also inform them about when we may be coming out with a tender.

That’s interesting. How do the tenders work?
For categories like dry goods or fruits, nuts and vegetables we tender every 12 months. We have something like 160 tenders annually. We pinpoint the specific product and characteristics for each tender we issue. Each one goes to existing and potential suppliers such as those we may have contacted during the fair who have been qualified to take part. We qualify them based on, for example, CSR, sustainability and packaging. Among our 160 or so tenders, about 80-90 are for one year and the rest are rolling contracts for up to three years where we can revise terms.

That is a lot of work. Is it all for private label?
At United Nordic we only work with private label but our mother companies have their own specific departments for A-brands. That is separate from what we do. We have private labels in certain categories that can be found across all of our parent companies. But our focus is not to have common brands. It is important that the individual partners in the three different Scandinavian countries have the freedom to select products that fit their own markets and which protect their own brand identities.

Given the economic situation right now, I imagine accessibly-priced private/own label is in high demand at the moment?
We are seeing more of a shift to private label. The share in Scandinavia is about 25%,, and maybe about 30% in Sweden. It varies by country but it is less than the UK for example. Private label is important for turnover but also for our margins and we do see the consumer moving in this direction and it is being driven by the cost of living crisis. There is also a shift to discount brands and products, and away from premium. So some of the discussions we are having at the fair are about securing more volumes.

In general that consumer shift is good news for United Nordic, right?
Yes, though with the high-volume discount brands, the margins are lower. However, we maintain products across all the key price segments to ensure we cater to all our customers. In general, people today are looking for a good deal and they are shopping around so it is also a challenging market in this respect.