Category: news

The French FMCG market is slowly recovering from the shock of new legislation. After a 10% drop in both value and volumes during Easter week, the market has rebounded to +1.2% in value but remains negative 1.6% in volume. Why?

Unsurprisingly, the supermarket format is growing as the limit on promotion and maximum margin on farmers goods remove all insentive to drive to a periphery for overstocking. E-commerce is in a fall (-5% versus last year). As mentioned earlier, a few weeks ago, the last pure quick-commerce player have shut their doors in France. What is wrong with E-commerce in France? Wasn’t it the future of retail?

Thanks to new legislation that limits promotions, home and personal care categories are down about 10% in both value and volume.

This is a slightly better performance than the -15% seen last week, but there is still no promise of recovery on the horizon.

On the other hand, the annual inflation rate has slowed down to 2.2%, which is likely linked to the consumption drop. However, the risk of deflation and subsequent recession is obvious if things remain unchanged.

Several retail CEOs and VPs have requested an audience with Emmanuel Macron. Let’s see if that bears any fruit (meat or cheese).

Summer is a great time to disconnect from digital media and appreciate the feel and touch of paper books, deep diving into the thoughts, analysis, experiences, and beliefs of their authors, who relentlessly dedicate their own time to their future readers.

Personally, I like to combine educational, business and recreational literature, reading several books in parallel and listening to their audio versions when driving.

Here is my summer shelf:

1.      “Good Strategy/Bad Strategy” by Richard Rumelt (finished)

2.      “The Silk Roads: A New History of the World” by Peter Frankopan

3.      “How the World Really Works: A Scientist’s Guide to Our Past, Present and Future” by Vaclav Smil

“Good Strategy/Bad Strategy”, 2011.

Richard Rumelt has vast academic and consulting experience in strategic management. In his book, he provides definitions of strategy and gives multiple examples of various business actors’ challenges to define or re-invent their strategies and organizations.

According to Dr. Rumelt, true strategy is not a simple collection of goals or a “shopping list” type set of actions, but rather a coherent and focused plan that addresses the fundamental challenges and opportunities a person or an organization faces. Many companies lack a clear understanding of their underlying problems and a plan to overcome them. He identifies this as “bad strategy,” which often leads to wasted efforts and missed opportunities.

Here are some quotes that stood out for me:

“A strategy is, like a scientific hypothesis, an educated prediction of how the world works.”

“Good strategy requires leaders who are willing and able to say no to a wide variety of actions and interests. Strategy is at least as much about what an organization does not do as it is about what it does.”

“The most basic idea of strategy is the application of strength against weakness. Or, if you prefer, strength applied to the most promising opportunity.”

Here is a random fact for you. Snails are the 2nd most populous species on earth after insects.

There are at least 60,000 known species of snails. They live in both fresh and salted waters as well as on land. For comparison, humans are only one species – homo sapiens and we share our preferred habitat with snails.

What makes snails so populous is probably the fact that they can reproduce both with and without partner. Snails can combine both solitary and social behaviors. Studies showed that the snails deprived of the social group interactions would prefer to stay solitary the rest of their lives and never return to society.

Humans, on the contrary are the social beasts. Our ability to dominate all other life forms and nature is not due to our large brains (in fact they are 25% smaller than of Neanderthals), nor our longevity (Hydras are known to be immortal and whales can live more than 200 years), but of our ability to create social links, form groups, organizations and governments.

One of the oldest human projects was probably Göbekli Tepe – an 11,000-year-old ritual site, built by stone age people, erecting 5-meter-tall pillars weighing up to 10 tons. It is located less than 200 km away from the city of Gaziantep, in the region where on February 6th 2023 two consecutive earthquakes took place, destroying countless number of homes and killing tens of thousands. Since then, more than 40 countries have sent their rescue workers to help save as many people as possible. Same governments pledged to support the rebuilding efforts financially.

In the turbulent times some of us act like snails, hiding in their shells, sealing the door shut and ignoring the outside storm. Others prefer to act. And it is this act of bravery, solidarity and compassion that moves humanity forward, pushing our horizons, changing our lives for better, achieving unprecedented results.

Being snail is easy as long as you have your shell…

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I flew next to one of the major bank’s regional head recently (imagine, they fly economy too! :)).

After a small talk we introduced ourselves. He was fascinated by the retail industry and the tectonic shifts in both retail and consumption behaviors. It reminded him of the old days when the ATMs transformed the retail banking. Everyone those days was afraid of losing jobs to machines. Manual retail banking operations have indeed dramatically decreased, but so did the space they had to occupy. Thus, the need for smaller space and the lower cost pushed competitors to open much more “proximity” banks, greatly increasing the number of staff needed, growing the retail industry thanks to the ingenious automation.

Retail of 2023 is about sense. Seamless flow, automation and digitalization, mixed with smart cost management and nature preservation are the key ingredients in the recipe of success.

Having acquired Swania (Maison Verte), Henkel will pioneer Direct-To-Consumer business model in Europe. It is a unique opportunity to test the channel through a relatively small niche yet very trendy brand.

Unilever has been experimenting with Dollar Shave Club to no avail, finally relaunching it through proven brick-and-mortar channel to offset $1Bln investment in the US, but Swania example and the risk of missing the train might trigger changes. I believe that sooner than later Seventh Generation and Love Beauty and Planet will be knocking on our doors directly.

Let us see if finally P&G will launch their re-usable hybrid diapers on subscription. They too experiment with DTC elsewhere.

In any way, the DTC trend in Europe is bound to grow. It should reach the tilting point of profitability through offer premiumisation and on-subscription model.

Congratulations to Henkel. A true gem in the crown of household giant.

Happy new earth, Luxembourg 🙁

Today we have consumed an equivalent of one earth’s annual natural resources.

To put it bluntly, should the world’s 8bln people consume at the rate of Luxembourg, they would require 8 earths.

So, what is it that we are doing so wrong in Luxembourg that people of Indonesia don’t do? Any thoughts?

#climatechange#sustainability#globalwarming

According to the World Resources Institute, the top three greenhouse gas emitters — China, the European Union and the United States — contribute 41.5% of total global emissions, while the bottom 100 countries only account for only 3.6%. Collectively, the top 10 emitters account for over two-thirds of global GHG emissions.

The world cannot successfully fight climate change without significant action from the top 10 emitters.

WRI created a set of interactive charts called “Climate Watch” for tracking the progress of the Paris agreement.

I will discuss in details each of the key polluters status and pledges in the next article.

Meanwhile, I encourage you to check the charts and take responsible actions in your daily lives.

#climatechange #sustainability

Here are my “stay-at-home” holidays reads. Get inspired!

1. Mars
The lockdown-enabled hobby of mine. I have literally opened my horizons and wish you to use this time to learn something new. Like our neighbor, planet Mars!

2. Subprime Nation, a very detailed and thorough analysis of the world working laboriously to re-install the US as a global power. Are we repeating the same mistakes, making poor nations poorer and the US stronger and richer than ever before ring now?

3. Atomic Habits
Self-development book. An easy to follow guide on changing yourself into a better version of you. Highly recommend.

4. Chimpanzee politics
The story of power and social life of apes in captivity. Can’t wait to see the parallels with human society. Excited! Got it today as a birthday gift.

European Commission’s Remanufacture Report 2015 states that currently, less than 2% of all produced products are remanufactured. Nevertheless, this sector employs 194,000 people and accounts for almost 30Bln€ in revenue in EU alone.

In December 2019, the EU Green Deal has been announced. It was then adopted by France and Germany in March 2020 turbo-boosting the remanufacturing industry by imposing significant limitation on product-to-waste business models and incentifying remanufacturing.

For example, on February 10th 2020, France has adopted their own “Anti-waste law for the circular economy”. Among it’s five core objectives, part 4 specifically focuses on remanufacturing:

1. Apply a repairability index and make progress towards a durability index
2. Facilitate repair and promote the use of used spare parts
3. Extend the legal guarantee of conformity
4. Introduce mandatory information on the duration of computer and phone operating software updates
5. Create repair funds
6. Enable the use of 3D printing for the repair of objects”

#remanufacture#EUGreenDeal#Antiwaste

(image source: thesamba.com)

Here are two exciting books I am finishing now. Quite unorthodox. Written by a historian Yuval Harari. Highly recommend!

Some of my favorite quotes from Homo Deus:

“History isn’t a single narrative, but thousands of alternative narratives. Whenever we choose to tell one, we are also choosing to silence others.”

“The greatest scientific discovery was the discovery of ignorance. Once humans realised how little they knew about the world, they suddenly had a very good reason to seek new knowledge, which opened up the scientific road to progress.”

Some of my favorite quotes from the 21 lessons:

“If you cannot afford to waste time, you will never find the truth.”

“The very sophisticated artificial intelligence of computers might only serve to empower the natural stupidity of humans.”

By manufacturing a never-ending stream of crises, a corrupt oligarchy can prolong its rule indefinitely.”