The brand’s producers accuse Mercadona of not selling their new products. This is the final chapter of the “war for the shelves.”

Mercadona usually makes headlines for many reasons. Thanks to the large sales quota, the huge profits it generates, or the huge assets of its president, Juan Roig. Today, the Valencian company is again in the news, albeit for a completely different reason: Promarca, the association that brings together manufacturers of famous brands of food, drinks and pharmaceuticals, has just called it almost the enemy of innovation. And it does this for a very simple reason: in the eternal struggle between manufacturers and large supermarket chains, Promarca assures that in 2023 Mercadona will not include a single new product on its shelves. At least not one that doesn’t have a white label on it.

The industry is already talking about “unfair competition.”

2023 without brand news. “There is one distributor who has not mentioned any new products from the brand in 2023. Although he works with many brands, he chooses not to support innovation.” This is what Promarca President Ignacio Larracoechea said yesterday during the presentation of a report on the sector. And although his comment did not point to any specific supermarket chain, the data revealed during the association’s presentation, held in Madrid and distributed to the chains, ultimately clearly pointed to a well-known name in the supermarket chain. retail Homeland: Mercadona.

Old pulse, new drifts. With his commentary, Larracochea opens a new theme in the old struggle between the manufacturers of established brands and the large supermarket chains, two groups destined to understand each other, but which collide at a key point: the struggle between popular brands such as Bimbo, Danone or Pescanova; and the so-called “white” – brands supported by the retail chains themselves, such as Auchan, Hacendado or Eroski Seleqtia.

This is not the first time that Promarca has warned of the consequences of this shock for customers, both in terms of the variety of offers and the prices themselves; But yesterday the association emphasized a new aspect: the damage this impulse is doing to innovation in the sector itself.

But… What do the numbers say? Data provided by Promarca, which is inherently an interested party in the dispute; but the conclusions they leave are telling. Research released yesterday by Kantar shows that the percentage of third-party “brand innovation” introduced by Mercadona in 2023 was zero. 0%. In 2021 and 2022 it was around 4%; and in 2020 it was 7%.

Other chains where Promarca notes a low percentage of manufacturer brand innovation are Lidl – 4%; Aldi – 10%; and Gadis with 14%. At the opposite pole are Carrefour (61%), Alcampo (38%) and Eci (25%).

“Unfair competition”. In practice, these percentages will be expressed in a greater or lesser willingness of supermarket chains to place on their shelves new products produced by various manufacturers. The fact that Mercadona did not mention any of the innovations on the market represents a “new record” for Larracochea, which prompted her to go one step further: “It is a little unusual and a practice that is not very desirable either for the general public or interest, nor for the economy, since it works with many brands, but does not include innovation. And if, in addition to not incorporating innovations, it copies them, then this is unfair competition.

It’s interesting that he “TOP 10” innovations 2023, calculated based on the “penetration rate and repetition of innovation” of products, is led by a product from Bosque Verde (Mercadona): a transparent film incorporating a sliding saw system. In any case, Promarca assumes that of the nine remaining “TOP” products, eight are from third-party brands.

Implications for the sector. It is no coincidence that Promarca clearly points to the position of Mercadona or Lidl. The market share of both chains, especially the Valencian one – 26.2% in 2023 – is important, so their willingness to give more or less market to new products on their shelves directly affects producers. So much so that Promarca noted yesterday that the pace of company launches is slowing.

More precisely, he claims that over 13 years, innovation in new products in the mass consumer sector, which includes food, beverages, pharmaceuticals and personal care products, has fallen by 43%. In fact, only 89 innovations were brought to market in 2023—an “extremely low” figure.

“Innovation needs more support, affection and care to promote sustainable market growth,” warns one of the authors of the Promarca study. The group also claims that product launches are boosting demand from both brands and distribution networks themselves.

Image | iStock

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