The Axfood conglomerate consists of various parts. Purchasing and logistic is handled by Dagab. For fruit, vegetables and flowers they have their office and warehouse in Helsingborg. From this location, all affiliated branches of the two supermarket chains are supplied. Willy’s and Hemköp are the two retail chains that are part of the company. Willys is a soft discounter with about 200 branches. “The assortment is more extensive than those of Aldi and Lidl,” Daniel explains. Hemköp is more of a service supermarket, and also has about 200 branches. Hemköp was founded 1963 and Willys 2001. A third branch of the company is Axfood Närlivs who focuses on smaller shops that mostly have a convenience segment, such as night shops and filling station shops. “We have a market share of about 85 per cent in that. For example, nearly every filling station sells our products.”
Consumer demand changingAll supermarkets are supplied from the DC in Helsingborg. Annually, 220,000 tonnes of fruit and vegetables pass through the DC. From that position, Daniel has a clear image of the developments. “The supermarkets Hemköp and Willys don’t have the same range. Willy’s is a discounter and has lower prices.” For example, for apples this means that large sizes are sold via Hemköp, while the smaller apples are sent to Willys. “We try to have an assortment for everyone within every chain. In Sweden, we have a large group of immigrants with a different food culture as well.” Besides, the Swedes travel all over the world, and demand changes due to that. Flat parsley and coriander are offered in larger packaging, and the assortment is becoming more international. “We don’t have seasons in fruit and vegetables anymore either. In the past, pineapple was only available at Christmas, now it’s available year-round,” Daniel exemplifies. The same is true for berries. Traditionally, demand and supply peaked around midsummer’s night, nowadays, berries is available year-round. “Seasons have as good as disappeared.”
Daniel Mansson.
In Sweden, the market for local products is quickly growing. “But it changes per season,” Daniel says. “We have a bad season for apples, for instance, due to frost in spring. This trend is also prompted by a growing number of vegetarians and the discussion of influence of food on the environment. Besides, consumers focus on organic products. Hemköp only offers organic bananas to their customers which has been a big success. The bananas boost organic sales enormously,” says Daniel. The market share is between 10-25% for organic depending on which supermarket “Sometimes it’s tricky to get plenty of volume, like in the first months of this year, when supply from Southern Europe was problematic,” he says. “But Sweden is a small market, so developments here don’t have much influence on the European market.”
Higher transport costs
Dagab imports as much as possible themselves. “When we have sufficient volumes, we import directly. We try to be as close to the grower as possible.” That means the company imports from both Europe and from overseas destinations. “Direct import means better quality and better information about products and seasons.” For some products the company uses both its own import and the spot market. Risks are limited because of this.
Swedish companies primarily use SRS crates. The grey crates can be found in every warehouse. Import products are sometimes supplied in boxes, but the crates are asked for more often, especially from within Europe. “We prefer SRS, and try to get more products delivered in these crates every year. For instance, Spanish cucumbers are supplied in SRS boxes.”
Lingon berries season is in full swing. This wild berry is popular in Sweden.
The average price for fruit and vegetables in Swedish supermarkets is higher than the European average. The cost for a truck from Spain currently costs between 3,500 and 4,500 euro. Besides, Sweden has a 12 per cent tax on food, which explains the high prices in supermarkets. “We also have higher logistical costs to reach all shops, due to the great distances we have to travel in our long country,” Daniel says. “The same prices are used in all of our supermarkets.”
For more information:
Dagab
Daniel Mansson
Box 15038
SE 250 15 Helsingborg
+46 (0) 42 295 412
daniel.mansson@axfood.se
www.axfood.se