Alnatura grows by 24 percent

Bucking the market trend and in defiance of the ominous economic situation, the Bickenbach company – Alnatura Produktions- und Handels GmbH – has grown in the financial year 2007/2008 by 58 million euros to 304 million euros (+ 24 %). It has passed the 300 million mark, even though growth was 10 % less than the year before. With the opening of the tenth store in 2008, the total number of its SuperNaturMärkte will be 45 by the end of this year. (Chart: Alnatura’s growth in turnover)
Because of the general state of the market, Alnatura’s brilliant 34 % growth last year could not be repeated. However, 24 % growth is an outstanding performance in view of the massive bottlenecks in the supply of raw materials and the general drop in organic sales that preoccupied the industry in the first half of the year. The founder of Alnatura, Dr. Götz Rehn, regards the overall current market situation as a challenge for the wholefood trade: “In future, we’ve got to concentrate on our profile, and on emphasising authenticity and sustainability at ever level.” Alnatura is already succeeding in doing this – at least for the Lohas target group – as a survey by touchpoint communications shows (see Chart). “Our efforts to establish transparency and credibility are bearing fruit,” is Dr. Rehn’s comment on the results.

At the annual press conference in Frankfurt, Rehn (picture) spoke about the financial year 2007/2008 and pointed out that sales had been rather muted during the summer. He said that since September turnover had again been accelerating nicely with double-digit growth. He thought that the fresh food range in particular still had big potential, especially cheese, yoghurt, fruit and vegetables. He justified price reductions, for which Alnatura had been criticised by some in the industry, as a way of fine-tuning the business: “We’ve got to stimulate demand, because we have a responsibility to the producers regarding the volumes we purchase from them.” He made it clear that the price reduction of 10 cents on milk was not to the disadvantage of the farmers. He insisted that pricing had been agreed with the producers and the reduction was borne by Alnatura. “ We want to get things moving so, with stagnating sales of milk, that’s why we put the price down. Customers got the message and acted accordingly,” said Rehn.

The share of turnover of the current 44 stores owned by the company is approaching 50 % of total turnover. In the financial year 2006/2007, 35 stores took 93 million euros, which was 38 % of total turnover. 62 % of turnover was generated by the marketing of the Alnatura brand via the partner companies Budni, Cactus/Luxembourg, dm, Globus, Hit and Tegut. Rehn said that Alnatura collaborated with partners (2600 outlets) in two sales channels in addition to the wholefood trade, namely conventional retailing and drug stores. He regarded this as a positive factor that stabilised overall growth in turnover.

In Rehn’s view, one of the key criteria for success is the ability of a company to react flexibly and creatively to customers. He said that Alnatura was trying even harder to take account of customer feedback in formulating company policy on both product range and design issues – company maxim, customer participation. They wanted to react even more quickly and precisely to customers’ wishes. Customer evenings, that proved to be surprisingly popular, showed that customers do want to be involved. As a completely new approach to customer involvement, Alnatura is launching a “Customer Edition” in 2009, its 25th anniversary year. There will be a competition in which Alnatura customers will design the packaging for eight anniversary products that will appear on the shelves from next August.
(Picture: Götz Rehn with employees)

The Customer Edition is part of what Alnatura is calling its initiative for the future in the anniversary year: the company wants to create a conversion fund for organic farmers that will be built up from the sales proceeds of the Customer Edition, donations and other sources. The target is to raise 100.000 euros that will provide expert advice and other measures to help 100 farmers to convert to organic. The campaign is supported by the Research Institute for Organic Agriculture, FiBL and organic associations. The fact is that the increase in the number of organic farms and the growth of organically managed land cannot keep pace with the rising demand for organic products.

“Evolution and expansion” is the maxim for the new financial year too that began on 1 October 2008. Alnatura’s aim is to continue growing at double-digit rates. Under “evolution” Rehn understands a continuous process of improvement in the company, especially in the stores. He picked out the example of fitting the chilled shelves in all its stores with glass doors (picture above) that save up to 60 % of energy and make a significant contribution to climate protection. Another step it has taken is re-designing the wine department.

Key concept expansion: at the beginning of the new financial year, the company became the focus of attention by opening four new stores in October alone – in Pforzheim, Munich, Hamburg-Ottensen and Berlin-Lichterfelde. Another new store in Munich will round off the year 2008. And continuing in 2009, Rehn want to expand his network rapidly with eight to ten new stores. These will be in Hamburg, Hanover and Berlin in the north of Germany, where he wants to see a denser network (see Chart). However the process will start with two stores planned for south west Germany - in Filderstadt and Alsbach-Hähnlein in the spring of 2009. The number of people employed has risen by 200 to 1150. With 106 trainees, Alnatura is one of the companies with the most training places in the organic food industry.

The Alnatura brand range was expanded last year by around 70 articles and now stands at 850. The lines Alnatura Sélection (27 premium products) and Origin (regional specialities) have been particularly successful. Both lines are to be expanded further.The design of the premium brand Alnatura Sélection (picture) has received no less than three awards: the prestigous “red dot design award”, conferred by the Design Zentrum Nordrhein-Westfalen and one of the biggest design competitions in the world, the “iF packaging award” and a nomination for the Design Award of Germany.