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Private labels: more variety and innovation

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The DIA Group’s own-label products constitute the most relevant differentiating element of its commercial offer. For more than 30 years, the DIA brand has been the hallmark and launch pad for internationalization. In recent years, the company has been working on an innovation and development process that has given rise to a portfolio of quality own-label products that cover the changing needs of the customer and makes daily shopping even easier.

The multi-format/multi-channel model that the company develops involves an offer at unbeatable prices and increasingly specialized in all categories. In 2016, the DIA Group continued to innovate and deepen its product range of own brands, amounting to over 7,500 SKUs of its own-label products, DIA, Bonté, Basic Cosmetics, Baby Smile, Junior Smile, AS and Delicious.

DiaThis is the Group’s historical trade name. With more than 30 years of good standing and over 5,600 SKUs, it covers all categories of high-volume consumer goods.

BontéThis is the brand specializing in personal care and hygiene products. It currently has more than 660 SKUs and has been the most important basis for development in the past few years.

DeliciousThis is the Premium banner, with the highest added value of the Group. It has over 250 SKUs.

Basic CosmeticsThis is the own-label product dedicated to decorative make-up and cosmetics. It currently has over 550 SKUs.

BabySmile and JuniorSmileThis is the banner for baby and child care. At the end of 2016, it had more than 230 SKUs.

AsSpecializing in pets, it has over 160 SKUs.

DIA’s own-label products have a presence on the shelves in all the countries in which the company operates, representing 46% of turnover. Thus, in Spain, sales represented 49% of the total range, and in Portugal this percentage was 54%. The excellent penetration of the group’s brands in emerging countries is noteworthy, mainly in Brazil and Argentina, which have a less established practice of shopping in this respect. In both countries, the sale of own-label products represented 38% and 37%, respectively, in addition to 7% in the Chinese market.

Private labels by market

Average of total sales by value.

Due to the extremely competitive framework in which the company operates, the DIA Group maintains a constant policy of investment in prices, allowing it to have a significant gap versus the main banners of hypermarkets and supermarkets.

In 2016, the company devoted significant effort to reducing prices, giving rise to attractive offers and promotions in all countries.

For their part, the main national brands also have a presence on the group’s shelves, further pursuing customer needs, giving them greater free choice.

At the end of the financial year, sales of national brands represented 54% of total sales, mainly supported by the innovation of the most consolidated formats and the development of the newly arrived Plaza de DIA and Clarel.

Increasingly satisfied customers

The DIA Group constantly monitors its brands and different formats, both in terms of positioning and customer perception.

Under the guidance of the international consultant Kantar Worldpanel, it carries out regular listening and monitoring of its customers to gain first-hand knowledge of how the latter perceive the commercial offer and price image in each of the countries in which the company operates.

Accordingly, the company can react quickly to the changing needs of its customers, with a better adjustment of its commercial processes.

Partnerships that benefit customers

The commercial partnerships that the company has in place to improve shopping conditions also make it possible for it to sustain margins and have a positive effect on prices for customers.

Its commercial standing was strengthened in 2015, with the creation of a purchasing centre in Portugal, called CINDIA, together with Intermarché, also a distribution operator.

Also in 2015, a similar partnership was established with Eroski, with the aim of improving negotiating conditions in Spain with large national brand suppliers and which, in 2016, led to the signing of another international partnership with the French company Casino, which, among other things, strengthened the development of the own-label products and that of national brands.

An agreement with Casino was signed with the company ICDC Services, which has become one of the largest negotiating platforms for own-label products in all of Europe. Through this partnership, the company expects to reach a volume of 50% of own-label products in the future in Europe in both companies.

In these agreements, all of the main groups maintain completely independent commercial policies, allowing the DIA Group to remain committed without restrictions to its strategy of being the distributor with the best price image in all the countries in which it operates.

DIA World Trade

The DIA Group’s effort to pass on the best prices in the market to its customers is supported by a vitally important company: DIA World Trade. Created in 2012, this group company, based in Geneva, is in charge of coordinating commercial relations with large international suppliers of the group in a unique and global scenario.

Through joint collaboration with these suppliers, DIA World Trade works on reaching framework agreements that complement those already established by the same players in a more local environment and according to the specific characteristics of each market.

This accomplishment makes it possible to implement joint business plans that are more efficient for both parties, focusing on the implementation of overall improvements in the supply chain of each country or the innovation and penetration of new products, among others.

Quality, the main commitment

The DIA Group’s main commitment to the customer is to offer products that have the best value for money.

The DIA Group’s Food Quality and Safety policy, approved by the Board of Directors in 2016, establishes the general principles that govern the company’s activity in this area.

The entire DIA Group and, in particular, the Quality Control team (with 267 employees), is focused on this commitment to the customer.

The DIA Group’s strategy to guarantee safe, quality products to customers is based on a Quality Management System, which is certified under ISO Standard 9001:2008. The system covers everything from the validation of suppliers, the technical definition of the product and the evaluation of proposals by the consumer through blind tastings (at the product development stage), to the analytical control after the merchandise has begun to be distributed to the warehouses and the store network (internal and external control plans).

During the final selection stage of suppliers for the own brand, applicants must pass a strict standardization audit, which guarantees the safety of each of the plants where DIA products are going to be made.

This audit also evaluates both the general management of activities and facilities, as well as the specific production conditions and the quality and environmental control system. 100% of the suppliers of own-label products have been audited, and out of these, 60% have IFS and BRC certification.

As an additional requirement for their incorporation into the own-label range, each product must be submitted to and pass a consumer tasting test that allows an assessment regarding the organoleptic characteristics of the product under development.

In 2016, a total of 2,879 validation panels were conducted in group countries.

The quality and safety of the products received in the warehouses and stores is supervised through a comprehensive control plan. The DIA Group has a total of 43 internal laboratories located in its warehouses in which a total of 743,616 internal analyses were carried out in 2016 under this control plan.

The DIA Group also collaborates with accredited external laboratories, where it carries out analyses supplementary to the internal controls. In 2016, 21,365 external analyses were conducted.

Furthermore, the warehouse and store auto-control systems define the health and hygiene conditions established by the DIA Group to ensure that product quality and safety is maintained throughout the supply chain.

To ensure the application of these standards, the Quality Control Department makes regular checks and periodic audits of warehouses and stores, where it supervises and assesses aspects such as order and cleanliness, expiry date management and the cold chain, among others.

In 2016, a total of 2,594 health and hygiene audits were conducted at DIA facilities (warehouses and stores).

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