PARIS (Reuters) – Carrefour (CARR.PA), Europe’s largest retailer, said on Monday that the head of yogurt maker Danone (DANO.PA) will sit on a food advisory committee the supermarket group is setting up as it seeks to boost sales of organic products.
FILE PHOTO: Alexandre Bompard, chief executive officer of French retailer Carrefour, addresses a news conference in La Defense, near Paris, France, January 23, 2018. REUTERS/Philippe Wojazer/File Photo
Carrefour said in January it would revamp its food range and focus more on organic food as customers demand healthier products, under a global five-year plan to increase group sales and profits.
“The group’s ambition is to lead the food transition … This is a big challenge. We absolutely must prove our new positioning to the customer through very strong, precise and coherent actions,” CEO Alexandre Bompard told journalists on Monday.
The new food advisory committee will be led by Carrefour’s Group Secretary General Laurent Vallée, who in January was tasked to spearhead food transformation across the Carrefour group.
It will include seven people from outside the group including a French chef, a farmer, a cancer researcher, as well as Danone CEO Emmanuel Faber, who has said he wants the world’s biggest yogurt maker to play a central role in the revolution sweeping the global food industry.
As more consumers, notably the “Millennial” generation, opt for healthier diets and a more socially responsible way of life, retailers as well as large consumer goods group such as Danone or rival Nestle (NESN.S), have been seeking to adapt.
Danone bought U.S. organic food producer WhiteWave in a $12.5 billion deal, bringing the company more into line with healthier eating trends and its boss will part of a committee that shares best practices and ideas with Carrefour.
Carrefour’s five-year overhaul announced in January also entails cutting costs, boosting E-commerce investment and expansion into convenience stores in the face of fierce competition from more agile rivals like Leclerc, and challenges from online retail giants like Amazon (AMZN.O).
Under the plan, Carrefour, which is France’s top organic food retailer, targets 5 billion euros in organic food sales by 2022, compared to 1.2 billion generated in 2017.
“Changing lifestyle habits, an increasing focus on health and food quality as well as growing distrust of the food industry in the wake of recent health scandals is propelling fresh and organic food sales higher in France, allowing retailers to benefit from higher prices and strengthen their earnings and margins, amidst a fiercely competitive environment,” Vincent Gusdorf, senior analyst at Moody’s said in a recent note.
In 2017 organic food sales in France rose 17 percent to 8.4 billion euros from 2016, according to organic food agency Agence Bio.
Carrefour also on Monday unveiled Act For Food, a worldwide program to educate customers about its initiatives to tackle issues such as food safety, product origin and relationships with farmers.
In July, Carrefour bought So.Bio, specialized in the distribution of organic products, with revenue of nearly 40 million euros. So.Bio currently has eight stores in South West France. Carrefour will open three new So.Bio stores by early 2019, including one in Paris and one in Toulouse.
Reporting by Dominique Vidalon; Editing by Susan Fenton