From an idea
to a success story
The REWE To Go concept emerged a few years ago from a REWE Group management trainee programme. The idea caught fire and grew into a pilot project in 2011. In 2016, REWE To Go launched a partnership with Aral.
The alarm clock goes off. Time to get up. Shower. Get dressed. And head off to work. Breakfast? No time! A take-away coffee. Maybe a roll on the hoof or packed in a bag to eat later in the office.
This is the way many households live every weekday. Young people, in particular, start their day in such fast fashion. Market researchers have determined that more than 40 percent of them do not eat breakfast at home. Instead, they prefer some sort of healthy food as they head to work. Rush, rush, rush. Lifestyles have changed. The next meeting, the next train, the next pick-up appointment at the day care centre – schedules are tight every day. Time is scarce. Even so, many people still want to have a balanced, fresh diet. To meet their needs, they'll stop somewhere on the way to work and buy some fresh, ready-to-eat food.
“To attract these customers, you need something different from your typical supermarket,” Philipp Pauly says in describing the idea he had a few years ago. “You need a format that can compete against fast-food chains and bakeries.” Back then, he was attending the REWE General Management Programme and had seen, especially in the Netherlands, what it takes to attract urban customers: with a convenience store that specialises in fresh, take-away products. The product range of such stores includes fruit that has been freshly cut into bite-sized pieces, warm snacks, sandwiches and beverages that customers can take with them. In making a presentation about his concept, Pauly encountered one question: “Could such an idea work in Germany?” He thought so. After doggedly selling the idea, he finally got the green light to give it a try. “At REWE, we have the core skills necessary for it: the purchasing, the sales channel and the logistics,” Pauly says.
“You can create new things only in a culture that encourages you to think outside the box.”Philipp Pauly, Head of REWE To Go
He swung into action immediately after the decision was taken. The first step involved a test operation set up in a store located on Cologne’s Hohe Street, one of Germany's busiest shopping areas – a fact that made it the perfect place for the test. Soon, other pilot stores were operating in Düsseldorf and at Cologne Central Station. “It took courage to try this,” says Pauly, who is now Head of REWE To Go. “But you can create new things only in a culture that encourages you to think outside the box.” But he did not get an opportunity to completely follow through on his idea. Instead, his career took him to other countries, including Russia, where he served as Managing Director of BILLA.Total commitment to REWE To Go
The next stage of the work to set up the sales network was entrusted to someone who – in terms of food retail – simply has to think outside the box. Because he comes from a different business. While working in system gastronomy, Udo Klinkhammer learned just how the business of eating on the run works. How you come up with products that appeal to customers on the go and meet their needs. “Sometimes, it's good when you come from the outside and initially know nothing about the internal processes,” says Klinkhammer, Sales Manager at REWE To Go. His job: To refine Pauly’s idea and move the format forward. His biggest hurdle? “It was to liberate the To Go concept from the supermarket mindset,” Klinkhammer says. After all, he adds, REWE To Go was not supposed to be a small supermarket. Rather, it was to be a convenience store, and such stores operate according to a different set of rules. “We have our own identity and a team that thinks only in terms of REWE To Go. It will not work any other way,” he states. They also suffered some setbacks and disappointments along the way. But this is always the case when you develop something new. “We never stopped believing in the success of the idea, though,” Klinkhammer stresses.
“Sometimes, it's good when you come from the outside and initially know nothing about the internal processes.”Udo Klinkhammer, Sales Manager at REWE To Go
The Cologne Central Train Station. More than 280,000 travellers and visitors pour through this building day in and day out. Each one of them is headed somewhere. In the middle of the tumult: REWE To Go, a space of 220 square metres filled with store shelves, a salad bar, fruit baskets, a hot-food counter and more than 5,000 customers every day. The tempo is tremendous. The space productivity is also disproportionately higher than in a traditional supermarket. One example: 1,800 portions of salad are sold each week in the store. Such a pace poses a challenge for the store's sales staff. Each team member must be able to do everything, and each member has to do shift work because the store is open 24/7. Shelves must be constantly refilled and products replenished. “We stock the shelves ourselves,” Klinkhammer says. “By doing so, we see quite quickly what is selling well and what isn't. We can then take direct action.” The competition is great. Customers who find nothing to their liking at REWE To Go just have to walk a few metres, to the next baker or fast-food provider, to find something to eat or drink.
A REWE To Go store can thrive in pedestrian zones, train stations or any other place where throngs of people are on the run. Why not petrol stations, too? Concept developers came up with this idea fairly early in their work. Both Pauly and Klinkhammer realised that Aral, the market leader in the petrol station business, would be their partner of choice if they decided to go in this direction. The idea came at a good time for Aral: “Our traditional Aral shops have pretty much tapped their potential and growth opportunities for the future,” says Rainer Kraus, Head of Transformation Convenience Business at BP/Aral. “At the same time, customer needs are changing dramatically. That's why it makes perfect sense to introduce REWE To Go as a high-potential concept for our petrol stations.”
The idea was tested first. In a pilot project conducted at 10 petrol stations, both partners closely monitored customer reaction to the new convenience offerings including fresh foods that they could take home or enjoy while travelling. And voilà: The customer structures of the petrol stations changed. Young people suddenly started turning up in the shops – not to fill up their cars, but to buy smoothies, salads or sliced fruit. And many customers who were only planning to buy petrol ended up purchasing something for dinner or a freshly made sandwich, fruit or a beverage to take away.
“We realised one thing quite quickly: This partnership would succeed,” Klinkhammer says. Kraus is really excited about the business: “In REWE, we have a strong partner who has a powerful brand and a high level of credibility and expertise in food on our side.” Aral took the big step in February 2016: It plans to convert up to 1,000 of the company's 1,200 petrol stations to the REWE To Go shop concept over the next few years. This decision represents the largest organic petrol-station investment project in the history of BP and Aral. But it will take more than a flip of a switch to pull it off. After all, the effort involves much more than rearranging a few shop shelves. “Nonetheless, we are still able to open up to six shops each week during this remodelling phase,” Klinkhammer says. “A total of 170 shops are planned for 2017.”
Full-range and discount stores are also profiting from the experiences of the To Go subsidiary. Pauly says: “We intend to be the pacesetter in the development of the convenience business at REWE Group.” This means the pioneering spirit can never die, he adds. “We never stop re-examining ourselves. REWE To Go has this freedom.” Klinkhammer says: “At the same time, we have a strong parent in REWE who backs us up.”
Chicken eggs for more animal welfare
REWE Group plays an active role in various projects in Germany and Austria that seek to improve animal welfare in poultry farming. The beaks of laying hens are not trimmed and male chicks are raised.
They are usually white or brown. And they come in the weight classes of S, M, L and even XL: chicken eggs. At first glance, you notice very little difference among them. At least as far as their appearance goes. Anything else? Jennifer Lichter takes a deep breath when she hears this question. It makes you wonder whether she is quickly running down a checklist of responses and deciding which one she should use first. She decides to start by describing the way most poultry farms operate in Germany. The male chicks are sorted out right after they hatch and are killed because they do not lay eggs and grow too slowly to be of any value for meat-producing purposes. This happens to more than 45 million male chicks each year, animal welfare organisations report. The beaks of laying hens are trimmed just a few days after the chicks hatch. It is an extremely painful process. But what egg buyer knows anything about it?
Jennifer Lichter, an expert in the area Sustainability Ware Food at REWE Group, has visited many poultry farms. In her master's thesis, she explored the cycle of breeding and usage. In recent years, she has turned her attention to ways of preventing male chicks from being killed right after hatching and of enabling them to mature in their own stalls.
“You will never be successful if you don’t venture into uncharted territory.”Andreas Steidl, Head of Quality Management of Ja! Natürlich
Andreas Steidl, the Managing Director of Ja! Natürlich in Austria, is also very concerned about the issue of animal welfare in poultry farming. In 2004, he initiated the first attempts to raise male chicks in organic stalls. The small-scale effort initially involved 150 animals of widely used laying-hen breeds – and failed. “We got ahead of ourselves with this project,” Steidl says. “The time was not ripe yet.” In 2011, the next attempt was made with a project called “Moosdorfer Haushuhn und Gockelhahn”. Initially, Steidl conducted comparative studies in test stalls and then at organic farms. Two years later, the first male chicks were raised in mobile shelters in Energiewald of Lower Austria. Successfully. As pioneers, Steidl's team had no one to learn from, he says. “We had to do a lot of trying and testing.”
In 2016, several organic rooster farmers began to take the male chicks from hatcheries and to raise them – based on the model of Ja! Natürlich. The pioneering idea is now a highly regarded Austrian farming solution for the organic industry. These efforts all result in higher prices, but despite that the organic eggs are really popular with customers. Does that mean the goal been reached? “Absolutely not,” says Steidl, the initiator of “Moosdorfer Haushuhn und Gockelhahn” in Austria. “The deeper you explore poultry breeding, the more improvement potential you discover.”
These are good conditions for pioneers who have the courage needed to take on challenges. Steidl also understands the risk of failure: “That's part of it all. But you will never be successful if you don't venture into uncharted territory.”
Jennifer Lichter kept a close eye on the project in Austria. She also thought about how her colleagues’ experiences could be used for a similar project in Germany. The most challenging point: the different scale. The Moosdorf eggs from Austria are organic products. The number of them is relatively small. By contrast, REWE wanted a solution for Germany that could be applied by conventional farming operations. Both Lichter and her colleagues at “Moosdorfer Haushuhn und Gockelhahn” were able to share one key element: the chicken breed. “Sandy”, the fowl bred for Austria, is a more placid breed than the breeds used in the past by conventional farms in Germany. This quality makes it a particularly good choice for breeding with untrimmed beaks. It is not easily stressed and attacks fellow chickens much less frequently.
But which breeder in Germany would take on a breed with which he or she has no experience? About which the farmer does not know the amount of eggs the animals will lay and how they behave in the hen house? Whose eggs are sand coloured and not white or brown like those German consumers know so well? “We and our suppliers had to do some hard selling until we finally found a farmer,” Lichter says. Things were all set by autumn 2015 when 20,000 laying hens were initially brought to a farm in the German state of Lower Saxony and raised in a project that was scientifically supported by the University of Osnabrück. There was not a whole lot of time for testing and double-checking. “When you are entering uncharted territory, you have to trust your gut now and then, but always while bringing everybody on board,” Lichter says.
“When you are entering uncharted territory, you have to trust your gut now and then, but always while bringing everybody on board.”Jennifer Lichter, expert in the area Sustainability Ware Food at REWE Group
REWE called the project “Spitz & Bube”. The German name perfectly sums up the work. The beaks of the laying hens are left in their natural form (“Spitz”, or tip). In addition, the animals receive intensive care, are given materials they can play with like straw balls and eat genetically unmodified feed. Their male counterparts (“Bube”, or boys) are raised until they are ready for slaughter.
The first “Spitz & Bube” eggs went on sale after Easter 2016. The sales began as a pilot project in approximately 600 stores in North Rhine-Westphalia, the northern region of Rhineland-Palatinate and in some stores in the REWE Region East. “We initially wanted to test how customers would respond to such eggs,” Lichter says. The effort began slowly. As is frequently the case when something new is introduced. Customers had no idea what to think of “Spitz & Bube”. Patience was required. REWE intensified communications and explained all of the features that made the sand-coloured eggs that cost a few cents more so special. And, suddenly, sales picked up. And they jumped so strongly that some stores were sold out in no time at all. The message was clear: The test had succeeded! The next step was then taken: Eggs from this project would be available in all REWE stores across Germany by the end of 2017.
“HERZ BUBE” represents to PENNY what “Spitz & Bube” represents to REWE. Under this brand, PENNY became the first discounter in Germany to stand up for more animal welfare in February 2017: The beaks of laying hens are not trimmed and male chicks are raised until they are ready for slaughter. But the two projects differ in some ways. The “HERZ BUBE” eggs come from cage-free hens of the Lohmann Brown breed.
From September 2017 onwards, REWE’s and PENNY’s range of eggs from conventional store brands will only include fresh eggs produced by hens with untrimmed beaks. “This is how we define sustainability: from the idea to a collaborative project to the final implementation as a forerunner and then as an industry standard,” Lichter says.
CURIOSITY. COURAGE. SUCCESS.
There can be no new ideas without curiosity. There can be no success without the courage to try something new, without a culture of experimentation and without the awareness that mistakes will be made and many things can simply fail.
Theodore Levitt, the former professor at Harvard who coined the term “globalisation”, once said: “Creativity is thinking up new things. Innovation is doing new things.” At REWE Group, we have learned over the past 10 years to be creative – a quality that is hardly a hallmark of traditional food retail. We were curious and had been itching to try something new. It was exciting and produced many interesting ideas.
But: You do not need courage to do this. You need courage to actually put new ideas to the test and try them out in practice, even when you run into resistance from those who would defend traditional ways of doing things and even when you run into open opposition in the company. Without courage, even the most daring forms of creativity are utterly useless. “Innovation is doing new things,” that is, not just dreaming up something, but really putting something into action. In large organisations like REWE Group, such an effort can be difficult and exhausting.
Orders from the Management Board have no effect at all. It is only the enthusiasm, dedication and energy of the hundreds of thousands of people who work in our headquarters, warehouses, stores and travel agencies that will turn an idea into a new reality. “Doing new things” is the only way for a creative idea to demonstrate whether it can withstand the test of time. Or as English speakers like to say: “The proof of the pudding is in the eating.”
Astute members of the Management Board know one thing about organisations: Sometimes, the job of introducing something new can be compared to pouring a bucket of water at the top of a staircase and watching just a drop or two reach the very last step, at best enough to fill a tiny schnapps glass. At this point, a new idea has run out of steam. This is why employees of a company must always be sold on an idea and become excited about it. Each and every day.
“REWE Group's corporate culture, which is expressed in the three interconnected words “Curiosity – Courage – Success”, should be promoted and expanded.”Alain Caparros, CEO of REWE Group
REWE Group has made tremendous strides in innovation in recent years. The range of changes is tremendous: late store hours, cash withdrawals at the checkout counter, new gastronomy concepts, sustainability commitment to environmentally and socially responsible consumption, premium store brands, convenience concepts like REWE To Go, online food sales, a new generation of travel agencies with a virtual world of experience – in all of these areas, we were sometimes a pioneer, and sometimes even a trendsetter. The people at REWE Group have every right to be proud of the fact that our company is considered to be an innovation leader in Germany and Europe.
To me personally, however, there is something else that means much more than each of these individual innovation successes: It is the new spirit we have developed at REWE Group over the past 10 years. It is a new culture that is defined by experimentation and tolerance for mistakes. They are essential. We can remain strong over the long run only if we prevent the triple-team combination of Curiosity, Courage and Success from drifting apart. There can be no new ideas without curiosity. There can be no success without the courage to try something new, without a culture of experimentation and without the awareness that mistakes will be made and many things can simply fail.
This corporate culture, which is expressed in the three interconnected words “Curiosity – Courage – Success”, should be promoted and expanded. If we do so, REWE Group, which has become a leading trade and tourism company in Europe in the 90th year since its founding, will remain on a course of success in decades to come, no matter what challenges and changes the age of digitalisation in all aspects of life may throw our way.
I wish you an interesting read of our digital Annual Report 2016.
Shopping frequently presents a challenge to people with disabilities. In one Vienna store, BILLA has introduced a number of measures to create a virtually barrier-free shopping environment. Solutions that pass this test will be added to other stores as well.
People disabilities are often unaware of the barriers that must be overcome by people with limited mobility, low vision or hearing impairments. People like Elena L. when she shops for food. The Vienna college student wears a hearing aid that offsets her disability to the greatest extent possible. And she'd rather not be asking for help. She prefers to do as much on her own as possible. During her daily interactions with others, she understands people most clearly when she can read a person's lips as the individual is speaking. It takes a lot of concentration on her part and a little patience from her conversation partner. In particular, Elena L. must be able to clearly see the shapes made by people's mouths as they speak. But if a supermarket employee asks her whether she needs anything else while happening to be bent over some product, Elena L. will be unable to understand what the employee said very well. “To avoid such situations, I generally buy pre-packaged products,” she says. At the gourmet food counter, she prefers not to tell the employee working there that she does not hear well: “That would make me uncomfortable.”
BILLA is determined to provide people with low vision, hearing disabilities and limited mobility with a little more independence when they go shopping. In the spring of 2016, Austria's largest food retailer opened a supermarket called “BILLA ohne Grenzen” (BILLA without borders) in the Simmering district of Vienna – it's a supermarket in which a variety of measures designed to help people with disabilities and the elderly are being put to the test. “We consciously decided not to build a model store. Instead, we wanted to create a prototype where we could get some experience,” says Sales Director Gabriela Jansa. “We will introduce ideas that prove themselves here into other stores across Austria. Nobody has taken such a systematic approach before.”
“We consciously decided not to build a model store. Instead, we wanted to create a prototype where we could get some experience.”Gabriela Jansa, BILLA Sales Director
Accessible design in stores has been a standard at BILLA for a long time. All new stores built since 2008 are structurally barrier-free. All other locations were reviewed and then remodelled in accordance with local conditions and in close cooperation with government authorities and affected shoppers. “Since 2014, we've been working on solutions that go well beyond the barrier-free design of the building,” says Peter Breuss, Technical Director of REWE International. “Our goal is to create a comprehensive barrier-free shopping environment for all of our customers.” Caroline Wallner-Mikl, Disability Manager of REWE International AG, adds: “We had many conversations with organisations that represent disabled individuals and shop builders as well as conducted intensive tests with affected shoppers. We then came up with solutions that would help people with disabilities when they shop in the store. The result is the prototype store in south-eastern Vienna.” Political leaders have also applauded this BILLA project: “The positive aspect is that BILLA is taking a very broad approach here,” says Erwin Buchinger, the former head of Austria's Office for Disability Issues. “Many people simply think of the store entrance when they think about barrier freedom and forget about the shop's interior.”
Barrier freedom begins at the store’s door – and means something more than having an entrance without steps. After all, BILLA customers like Sami D. face many other challenges when entering the supermarket, challenges greater than climbing a few steps. The young man is blind. “I see virtually nothing,” he says. With the help of a walking cane and guide dog, Sami D. can safely and securely walk down the pavement. But he has problems getting his bearings in a supermarket. To assist such customers, BILLA has installed tactile guidance strips on the ground outside its prototype store – these strips consist of several rows of dots and ribs. Using a long walking cane, customers with low vision can tap their way to an information board inside the store. This display is actually a tactile map of the store that uses both pyramid and Braille inscription. As a result, it provides a good overview of the store to a group of shoppers that extends well beyond customers with low vision.
Sami D.’s fingers wander across the symbols on the display. He then says: “This is a big help. Now, I know how the store is laid out and can start shopping.” The blind man could also ring a bell installed on the information board. A BILLA employee would then come and help him select his items.
Frequently, it's the little things that complicate shopping for people with disabilities: Reverse vending machines for bottle returns whose in-feed aperture is too high, making it impossible for people in wheelchairs to use – this has been lowered at BILLA. Baked-goods dispensers that have to be operated with two hands because the doors close so quickly that they might pinch a user’s fingers – at BILLA, they shut in slow motion. Difficult-to-read displays on scales and cash-register terminals – at BILLA, the colour presentation and font size have been modified so the letters and figures are much easier to read for most customers, especially for those with low vision: White on a black background instead of yellow on red. Or a supermarket may have fruit scales that customers like Barbara D. are unable to use because their hands cannot reach the service buttons. The Vienna resident uses a wheelchair. “Sometimes, I may just be able to reach the buttons, but not the printed label,” she says. At BILLA, the fruit scales are set up so a person can run a wheelchair underneath them. Things at the checkout counter have also been made easier for Barbara D. She can place the items she just purchased into the shopping trolley because a lower belt has been installed on the front side of the counter.
A solution has also been developed for Elena L., the college student with the hearing disability. It helps her pay at the cash register and place orders at the gourmet food counter: Thanks to a microphone installed on the cash register and at the counter, employees’ voices are transmitted to her hearing aid with the help of inductive amplification and background noises are reduced. “I now have a good opportunity to hear what the employee says to me and I can also get some advice,” the young woman says.
Close to the customer
Off to Vietnam! From booking to local support in the destination country, DER Touristik Group is always at its customers' side.
Berlin, Friedrichst. 69. From here, you just have to take a couple of steps, perform a few mouse clicks and turn your head a little bit in order to go on a tour of Hanoi, the bustling capital of Vietnam. Sounds crazy, doesn't it? But it's not.
The trip starts when you enter the DER Concept Store operated by DER Touristik in The Q shopping centre located in central Berlin. The travel agency that opened in the spring of 2016 is the test field where the travel and tourism division of REWE Group is exploring the future of the travel business. This business will not be online or offline. Rather, it will be conducted omnichannel. This is the reason that many features of the Concept Store developed by DER Touristik differ from the elements seen in a traditional travel agency. You notice the difference right away when you stand outside the store. As you walk by the travel agency, you'll see someone moving in the store window: A life-size virtual woman will warmly greet you and tell you how to gain some travel inspiration by employing a few simple gestures. All you have to do is raise your hand. This gesture will then launch a video that will make you feel as though you were gliding along on the deck of a cruise ship. A gleaming underwater world on the floor will then direct you into the store. Once you enter it, animated clams will pop up beneath your feet. When you take one step to left and move towards an oversized video wall, the image will slowly melt into a burst of mosaic pieces and create a new image.
“A trip is a highly emotional product,” says Andreas Heimann, Managing Director of DER Reisebüro. “Our goal at the Concept Store is to use cutting-edge image technology to awaken wanderlust and enable people to experience a destination even before they go there.” It's a risky proposition. After all, too much technology or the wrong type of technology could have the opposite effect on customers, creating boredom, indifference, a desire to leave. But, Heimann says, this was the challenge the company faced when it developed the concept for the pilot store: It wanted to create a digital stage that piques customers' interest and inspires them. In the process, it didn't want to simply add technology to a conventional travel agency. Such technologies may have indeed made processes more efficient, but they would have also suppressed the emotions so vital to travel sales.
Hanoi is not so far away now as a result. Other visitors to the DER Concept Store who really have not made up their minds about their next trip can head off with one of the store's travel experts to an area at the back of the travel agency called inspiration island: After sitting down on a couch, visitors set off on a different sort of journey. The stage turns and takes them to a unique world of holidays. The DER employee will select appropriate photographs, information and short videos that are then projected onto a huge curved television screen. Dimmed lighting and soothing music create a holiday mood in customers' own small cinema.
“A trip is a highly emotional product. Our goal at the Concept Store is to use cutting-edge image technology to awaken wanderlust and enable people to experience a destination even before they go there.”Andreas Heimann, Managing Director of DER Reisebüro
With these impressions fresh in their minds, the future holidaymakers then walk to the consulting desk. Once there, the travel expert will call up information on his or her monitor that will also be projected on to the desk for the customers to see. This can include things like a map of Hanoi. How far is the desired hotel from the airport? Where are the key sights? Such questions can be answered quickly. At this point, the job of looking is over. It's now time for the customers to immerse their senses into the world of holidays. The magic phrase is virtual-reality technology. Using 3-D glasses controlled by head movements, holidaymakers can take a 360-degree tour of hotels, cruise ships and holiday destinations – places like Vietnam.
The country of the Mekong Delta is increasingly becoming one of Europeans’ most popular travel destinations. Erkan Tuncaakar, General Manager Vietnam at DER Touristik Group’s own destination agency Go Vacation, cites two reasons for this interest: Vietnam is more original than many of its southeastern Asian neighbours and can meet a broad array of holiday needs. Beach lovers are enchanted by the country's beautiful bays. Holidaymakers who prefer to take tours are fascinated by the country's many exciting cities. “Vietnam is the up-and-coming travel destination in Asia,” Tuncaakar says. Last year, around 15,000 guests flew to the country with the tour operators of DER Touristik Group.
“The employees in the travel destination see the holiday location through the eyes of the customer. As a result, they are best able to fulfil the travellers' wishes.”Christoph Müller, Managing Director Go Vacation
“We want to be in the places where our customers go on holiday,” says Christoph Müller, Managing Director Go Vacation. “For this reason, we established a separate agency in Vietnam under the umbrella of Go Vacation Thailand in the autumn of 2016.”Local support for guests
Colleagues in the country serve as the extended arm of the tour operators: They organise transfers from and to the airport, arrange exciting excursions, put together multifaceted round-trip tours, answer travellers' questions and solve their problems at any time. Anyone who has ever lost a passport or money or had an accident while travelling abroad knows what a relief it is to have a professional by your side to take care of all the details. “The employees in the travel destination see the holiday location through the eyes of the customer,” Müller says. “As a result, they are best able to fulfil the travellers' wishes.” But the job performed by the agency staff extends well beyond traveller assistance. They help the tour operators purchase hotel-room allotments in the destination country, negotiate terms and handle follow-up negotiations locally.
In recent years, DER Touristik Group has significantly increased its network of agencies around the world. At the end of 2016, the network comprised 51 offices located in 19 countries. A total of 1,500 employees in these locations make sure that our guests have a pleasant holiday. This good infrastructure also appeals to international third-party clients. In this work, destination agencies also assist smaller tour operators that cannot afford to set up their own networks. Conversely, DER Touristik Group works with partner agencies in less-travelled destinations where its own office would not be fully utilised. As a result of this work, holidaymakers will find local contacts in each of the 179 destination countries offered.
That is welcome news to many customers. This is particularly the case when they head off to a place they don't know – like Vietnam, perhaps. The trip with the virtual reality glasses to the bustling city of Hanoi or through the karst field formations of the Halong Bay may indeed be really exciting – but it can never beat the alternative of experiencing it all in person.
Fruit and vegetables with character
They may be gnarled, diminutive or blemished. But PENNY still gives a chance to those fruit and vegetables that would never win a beauty contest. Two other qualities matter most of all: the products’ organic origin and their delicious taste. Since 2016, the Naturgut Bio-Helden (organic heroes) are available in all PENNY stores.
Shoppers frequently equate a store's fruit and vegetable displays with the runways used in fashion shows: It is the good-looking, voluptuous and flawless products that become the apple of their eye. They want the products that have the smooth skin and live up to their ideal of the perfect product.
Employees at PENNY viewed things differently and came to one decision: “We've got to take matters into our own hands.” Their rallying cry: Fruit and vegetables with character deserve a chance, too! By this, they mean such things as a lemon that has a birthmark or two on its peel, carrots that may be gnarled and potatoes that lack a perfect oval shape. Looks can indeed deceive: Such products taste no different and can be stored for the same amount of time as their unblemished, uniform cousins. They just look different.
“This is a problem for our organic farmers,” says Katja Becker, Quality Management Officer at PENNY. Organic farmers do not use any chemical-synthetic pest-management products or highly soluble fertilizers. As a result, they regularly harvest smaller or larger products and fruit with imperfect peels. They are unable to sell this part of their harvest through food retailers. Instead, they market the products to industry at comparatively lower prices. Or they simply destroy them.
PENNY had a different idea: We will increase the tolerances for organic fruit and vegetables and give organic farmers an opportunity to sell a larger share of their harvest in retail. In the process, we will help cut down on food waste.
PENNY does not segregate such flawed organic fruit and vegetables from its regular range of organic products. They are a regular part of the organic range. For instance, a net filled with five lemons may include one that is not bright yellow. PENNY calls such products “Bio-Helden”, or organic heroes. It began to market them under the Naturgut brand name in April 2016.
“If you have an idea, you must have the courage to carry it out – even if you may run into resistance.”Katja Becker, Quality Management Officer at PENNY
It took courage to ignore customers’ ideal of beautiful fruit and vegetables. At the time, no other German food retailer had dared to go this far. Not one single company in the discount or full-range business regularly offered slightly blemished fruit and vegetables in its product lines. “If you have an idea, you must have the courage to carry it out – even if you may run into resistance,” Becker says.
The X factor in this project was customer reaction. What would happen if customers turned up their noses at the Bio-Helden? “To diminish this risk, we tried from the very beginning to intensely communicate one message to consumers: Our Naturgut Bio-Helden result from the caprices of nature. But in terms of taste and quality, they are just as good as optically flawless products.”
Patricia Brunn, Head of Department Ware Discount Ultrafrische 1, sums up the success of the Naturgut Bio-Helden this way: “With this marketing concept, we have done something good for nature and our producers. We are also helping people learn to appreciate food. We'll have done everything just right if our customers like to buy these products and enjoy eating them.”
Good communication – this has been the key to success. PENNY customers have been increasingly selecting the Naturgut Bio-Helden ever since sales began. Fruit vegetables are particularly popular. The product assortment is constantly being expanded: Courgettes, mushrooms, asparagus, grapes and avocados. “Our suppliers keep coming up with new product ideas for us,” Becker said. But that's not surprising. After all, organic farmers know one thing: PENNY dares to make a difference!
A commitment to home
Since the autumn of 2016, PENNY in the Czech Republic has been elevating the priority of selling national products. The discounter was the first food retailer to decide to add a special label to domestic products. The decision was based on a new law that defines the criteria for labelling foods made in the Czech Republic.
No matter whether they want dairy products, meats or beverages, many consumers in the Czech Republic prefer to buy foods produced in their native country. Which criteria does a product have to fulfil before it can be labelled a domestic product? As part of a legal reform carried out in 2016, the Czech Ministry of Agriculture spelled out the legal requirements for the first time. The regulations took effect in January 2017. Foods that consist of just one ingredient, like milk, must always come from the Czech Republic in order to qualify for the new label, “Česká Potravina” (Czech food product). For products that consist of a number of different ingredients, at least 75 percent of ingredients must come from the Czech Republic. It's a clear rule that serves as a reliable guide for shoppers.
“At PENNY Czech Republic, locally produced products have always played a key role,” says Espen Larsen, Managing Director PENNY Czech Republic. “That is why the labelling of domestic products is very important to us. We welcome the new law.” The discounter whose slogan is “Go ahead and buy Czech” was determined to be the first food retailer who would provide its customers with a broad selection of products that bear the official label. This would give it an edge on other food retailers in the country's highly competitive market.
During meetings with PENNY, suppliers agreed to change some recipes or replace certain ingredients so that their products would meet the strict rules laid down by the Ministry of Agriculture. It was a daring move because at that time, autumn 2016, the new law had not gone into effect. The producers could have waited until the reform had been in effect for a while. Or they simply could have said “no” out of principle. In this case, PENNY would have had to look for new suppliers or drop the product.“Česká Potravina” at PENNY
Even before work on the new law was completed, PENNY took a preventive approach with the help of its suppliers. As a result, it had a broad range of products bearing the “Česká Potravina” label long before the reform took effect. Seven of 10 foods sold by PENNY Czech Republic are Czech. No competitor has such a product range. PENNY also ranks first in terms of revenue. “We intend to further increase the number of domestic products in years to come – while maintaining the same quality,” says Larsen.
To alert shoppers to the new line of products, PENNY initially had to use shelf wobblers bearing the colours of the Czech flag in its 366 stores. The reason: Producers began to use the official logo on the product packaging only some time later. PENNY customers welcome the assistance. The courageous decision taken by Larsen and his team has set off a trend: All other food retailers are now determined to offer as many products as possible that bear the official Czech label.
High standards for natural stones
Working conditions in Chinese quarries, the source of many natural stones sold in Germany, are frequently alarming. With the help of experts from Xertifix e.V., toom has become the first DIY chain to examine the entire supply chain.
With a deafening whir, meter-high disc-cutting machines slice through blocks of stone. Dust fills the oppressively hot air: Working in Chinese quarries and processing operations is a gruelling way to earn a living. Not to mention dangerous. But workers rarely wear the safety equipment they need to perform the job, according to the organisation Xertifix e.V. that has been monitoring the problems of natural stone production for years. They labour in unfavourable conditions without any type of dust masks, hard hats, safety goggles or earmuffs. They frequently wear simple shoes or sandals instead of safety boots. In India, the workforce even includes children. “The working conditions are alarming,” says Thomas Mura, Head of Activity and Master Data Management and Project Manager of PRO PLANET at toom. “They frequently violate not only international standards, but also local laws.”
Nearly 90 percent of the natural stones sold in toom's stores come from China. And this includes granite, basalt and porphyry – the type of rocks that gardeners love because they come in so many colours and forms. “As a company that acts responsibly, we are called on to promote occupational health and safety and to fight child labour in the quarry industry,” Mura says. But how do you go about doing this by yourself and as a relatively small buyer of natural stones from China? The first step is to create transparency, says Kai Battenberg, Head of Sustainable Products at toom. “We must be able to seamlessly track the supply chain all the way back to the quarry,” Battenberg says, adding that this is the only way to regularly make unannounced inspections of the production sites to determine whether social standards are being applied and no children are being employed.
toom has resolutely pressed forward with this work. With the help of experts from Xertifix e.V., the DIY chain has become the first company in its industry to develop a process that creates transparency in the supply chain. The first Xertifix-certified stones went on sale in toom DIY stores in 2016. “We can now trace the source of the natural stones and ensure the producers are complying with occupational health and safety rules and are observing human rights,” Mura says. The big challenge toom faced was to persuade the suppliers to participate – and to terminate the business relationship if they refused to do so. toom managers understood one thing from the very beginning: Any company unwilling to meet these standards over the long term could not be one of toom's business partners. In 2014, REWE Group drew up its Guideline for Natural Stone Products under the guidance of toom. This policy clearly spells out the requirements placed on the supply chain – from wholesale to stone processing and quarries. Audits conducted by Xertifix e.V. were the next step.
“We hope that many competitors will follow our example and purchase natural stones only from suppliers who put their operations through a strict audit process.”Thomas Mura, Head of Activity and Master Data Management and Project Manager of PRO PLANET at toom
Natural stones supplied by producers who fulfil a number of requirements going beyond the Xertifix standard are awarded the Xertifix PLUS label and the PRO PLANET label. “We terminate the supply relationship if violations occur and drop the products,” Battenberg says. This has already occurred – because toom is uncompromising.
Generally speaking, pioneers do not particularly like to be copied. But not in this case: “We hope that many competitors will follow our example and purchase natural stones from suppliers who put their operations through a strict audit process,” Mura says. “This will increase the pressure on companies to improve working conditions.”
A way of reducing rubbish
In 2016, REWE became the first food retailer in Germany to drop plastic bags. PENNY abolished them as well and also decided to stop using plastic for banana packaging. In Austria, BILLA, MERKUR, ADEG, BIPA and PENNY began the transition to long-life and paper carrier bags at the start of 2017.
Plastic bags generally have short lives. An hour perhaps. Or two. It all starts at the checkout counter. This is where they are called on to perform their job of holding a shopper's purchases. Once the shopper gets home, the bag has done its duty and gets tossed into the rubbish bin. Or, in the best-case scenario, it lands in a drawer – and can wait to be used again. As a carrier bag or rubbish bag. Even then, its life isn't particularly long. That's one way to view things.
Another is that such bags never really go away. Plastic is virtually non-biodegradable. For this reason, plastic bags pose a centuries-long problem for the environment. A particular threat is faced by the world's oceans and seas, where a large share of plastic waste ends up.
But something can be done about it – simply stop providing plastic bags. Each year, 140 million plastic bags are sold at REWE stores. At PENNY, the total is around 62 million. And at BILLA, MERKUR and PENNY in Austria, the figure is 28 million each year. How about simply dropping the plastic bags and replacing them with reusable cotton carrier bags, paper bags and boxes? No one in the food retail business wanted to take this step for a long time. Because they feared to upset customers. REWE wanted to find out for itself. It wondered whether consumers would actually like the idea of dropping the trusty plastic bag and helping to protect the environment in the process.
So REWE did a test. For three months, more than 130 stores in the northern German state of Schleswig-Holstein were declared “plastic bag-free zones”. About 1,000 customers were asked one question: What do you think of this step? The result was clear: A large majority welcomed the decision to drop plastic bags and the opportunity to use alternatives made of paper and cotton. Even consumers who put a low priority on sustainability issues did not reject the decision.
On 1 June 2016, REWE took a stand to protect resources and bodies of water by discontinuing plastic bags at all REWE stores and at the REWE Lieferservice (delivery service). It was the first food retailer in Germany to take this step. The remaining inventory was sold, and that was it. “This was a logical and resolute step in our sustainability strategy,” says Lionel Souque, member of the Management Board of REWE Group who oversees more than 3,000 REWE stores in Germany as part of his responsibilities. The discounter PENNY stopped deliveries of plastic bags at the beginning of December. It then began to sell off the inventory in 2,150 stores in Germany. Customers who use the limited PENNY carrier bag with Günter Kastenfrosch design made of recycled materials receive a 10-cent discount on their purchase. PENNY donates an additional 10 cents to organisations that support children and young people, for example.
“We understand that banning plastic bags is an important step, however a first one only, in reducing plastic waste.”Lionel Souque, Management Board of REWE Group
In Austria, too, the days of the “Plastiksackerl” have come to an end at BILLA, MERKUR, PENNY and ADEG. The switch from plastic to long-life and paper carrier bags was started there at the beginning of 2017.
A step that sends a signal. Other major retail chains have now dropped plastic bags as well. For the environment's sake. “We understand that banning plastic bags is an important step, however a first one only, in reducing plastic waste,” Souque says. The journey will be long. REWE and PENNY took other steps on it in the spring of 2017. They are conducting tests with organic avocados and organic sweet potatoes that use no outer packaging or labels. A label can be applied on the outer layer of the peel with laser technology. PENNY also sells bananas that have not been wrapped in plastic film.
DER Touristik bid farewell to plastic bags in March 2017, too. Since then, the approximately 500 DER travel agencies in Germany offer only carrier bags that are made out of paper or recycled materials – or foldable shopping bags.
Order online, pick it up yourself
REWE is setting up a pickup service to go along with its traditional store business and delivery service as a way of expanding customers’ shopping opportunities.
You buy food in the store and then carry it home. Or you order it online and have it delivered to your doorstep. So far, so good. But is there perhaps an alternative approach that offers the best of both worlds to shoppers? And one that brings stores and retailers into the online world in the process? REWE also has an answer to this question: the pickup service. “Customers conveniently place orders online and then pick up the items at a nearby pickup-service store at a time of their own choosing,” says Gero Hennesen, who heads the project at REWE Digital Operations. Last autumn, REWE opened the first pickup locations in Gießen and Hamburg and has continued to roll out the concept in 2017. The idea is being initially introduced in existing stores. However, it's being increasingly added in new projects as well. No other food retailer is so systematically and broadly turning the idea of a pickup service into a reality.
REWE took its initial steps in this area in 2013 with its DRIVE locations. These sites were set up on a small scale at 12 locations across Germany. But the time was not ripe yet.Concept for small and medium-sized cities
With the pickup service, REWE is taking a new approach that applies a revised concept and offers the pickup option at a growing number of locations. In addition to major cities like Berlin and Hamburg, REWE is focusing on small and medium-sized cities. That is, regions the delivery service is not covering yet. “The typical user of the pickup service commutes between his or her home in a rural area and a job in the city. Such customers are on tight schedules. That's why they like to pick up their purchase when they drive by on the way home,” project manager Gero Hennesen says. Ideally, it should take five minutes to pick up the order: Customers will park in reserved spots. Ring the bell. Receive the order. Pay with cash or debit or credit card as usual. Load the vehicle and drive off. The online shopping process is a breeze, too: Easy-to-understand search functions help customers navigate their way through an assortment of more than 10,000 products that includes frozen foods, fresh fruit and vegetables, meat and sausage products and dairy items. Anyone who uses the service once will soon become a regular. With the right location, the pickup service can provide stores and retailers a chance to make a name for themselves. This requires a willingness to try something new. But customers will reward these stores for the effort – something the initial experience with the service has already begun to show.
Rice from Austria
For years, the idea of cultivating rice in Austria was nothing more than a pipe dream. The brand Ja! Natürlich decided to give it a try anyway. In 2016, BILLA and MERKUR began to sell the rice known as “red Seewinkler” and “black Seewinkler” from Burgenland for the very first time.
With its many hours of sunshine, its low amounts of rainfall and its ever-so dependable wind, the Austrian national park region Neusiedler See–Seewinkel draws sailors and surfers like a magnet. Winemakers, too, appreciate this region’s special climate. A few years ago, Andreas Steidl, the Managing Director of Ja! Natürlich, began to think the region was perfect for something else as well: “You could grow rice there, too.”
Cultivating rice in Austria? That's a crazy idea. Particularly when you think about all the favourable conditions that have to come together in traditional rice-production regions in Asia and Italy to produce a successful crop. Steidl concedes the point: “Yes, it's an unusual idea.” The last time someone tried to grow rice in Austria was more than a half-century ago. And things did not turn out well as the project fell apart on the parched sandy banks of Neusiedler Lake. “But you need the courage to venture off the beaten track,” the REWE Group manager says. His goal: high-quality, sustainably produced rice.
It's always the same story with ideas presumed to be “crazy”: They need people who believe in them. Otherwise, they remain nothing more than wishful thinking. Steidl found some allies in Erwin Unger and Erich Leyrer, two organic farmers in the Burgenland region of eastern Austria. They decided to take on the challenge of growing “the world's most northerly rice”. Their biggest enemy in this battle is not the weather, as you might expect. The national park region that runs along the border with Hungary easily generates an average temperature of 18 degrees Celsius six months of the year – just what you need to grow rice. No, their biggest enemy is weeds. Rice farmers in China’s terraced fields or in Italy's Po Valley fight these opponents by flooding their crops with water to prevent the weeds from growing. But such a trick cannot be applied in the dry region around Neusiedler Lake. Instead, Leyrer and his workers have to use this back-breaking option: They hack the weeds from the ground in hundreds of hours of manual labour. His neighbour Unger is trying to do the same job with the latest technology: He uses a camera-guided rake to liberate his plants from the weeds. In doing so, these organic farmers win the battle against the weeds without using any synthetic chemical pesticides or chemical fertilizers.
Experimenting, analysing, rejecting and correcting: Creating something new is a laborious process. “And you always run the risk of failing,” Steidl says. The hard work in Austria has paid off. The first sacks of the wholegrain rice “red Seewinkler” and “black Seewinkler” that appeared under the organic brand name Ja! Natürlich were sold in no time. The farmers harvested more than 6,000 kilograms of the rice last autumn – a really impressive total. The next step will be to further professionalise the dry-land cultivation process and to make it economic. It takes patience and persistence to develop something new. And crazy ideas. But, as far as Andreas Steidl is concerned, there are no such things: “Ideas are only bad if you don't express them.”