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BFD Expert Voices - Retail Deals

BFD Expert Voices

Around 84% of grocery retailers have plans to invest in food waste technologies over the next two years, according to a Coresight Research survey, Kimberly writes.

Why it matters: U.S. grocery stores throw out about 30% of their surplus food, according to nonprofit ReFED, and such waste is estimated to cost the grocery industry around $16 billion in net profit annually.

Context: The COVID-19 pandemic exposed how parts of the supply chain have contributed to food waste, “from the farm, the producer, the transformer, the manufacturer, the processor, the distributor, the retailer, the consumer, all of those and in between,” Susan Flake, global director of food and logistics at Avery Dennison, tells Kimberly. 

Avery Dennison provides intelligent food and digital ID technologies to help retailers manage their inventory and supply chains. 

State of play: Food waste management has become an increasingly important issue for retailers as they grapple with inventory levels during the pandemic.

Over-ordering has contributed to a supply glut for many retailers—not just in food, but in apparel and housewares, too.

What we’re watching: Accurate demand forecasting and planning technology, powered by artificial intelligence, emerged as the top area of planned future investment, Coresight’s survey finds.

Other hot tech includes electronic shelf labels and radio frequency identification (RFID), per the survey.

RFID, which gives products a digital identity, pinpoints a product’s location in the supply chain and its shelf-life, and has been used to monitor inventory levels to prevent product shortages — freeing employees to complete other tasks, Flake says.

Blockchain, which helps provide a system of record to better track a product’s journey, has also gained traction.

Separately: “The social impact is still going to be [an] overarching driver,” behind retailers investing in food waste technologies, Flake says.

Food waste accounts for about 10% of global greenhouse gas emissions. 

About 50 million people in the U.S. will face food insecurity this year, according to ReFED.

Roughly 30% of retailers who plan to invest in food waste technology say part of the reason is to meet their sustainability goals, Coresight's survey finds. Another quarter say they'll invest to improve profitability.

The bottom line: Despite an uncertain macroeconomic environment, Flake says investment in food waste tech will pick up.

“It's going to become even more critical,” she says. “You're going to look at more and more ways to save for the bottom line.” 

Editor’s note: This article was updated to clarify US grocery stores dispose of 30% of their surplus food and not 30% of their total food supply.

1 big thing: Grocers eye food waste tech

Illustration of an apple on a "Good/Bad" scale, with the scale arm hovering over "Good".   

Dufry (Swiss: DUFN), the world's largest duty-free retailer, agreed to merge with Autogrill (Milan: AGL), a travel concessionaire controlled by the Benetton family. 

Upon closing, the combined entity will generate revenue of more than €12 billion and EBITDA of about €1.3 billion, based on 2019 figures, the announcement said.

Why it's the BFD: This will be a test of scale and synergy, against the backdrop of a travel industry resurgence, our colleague Dan Primack writes.

Details: The Benettons will transfer their 50.3% Autogrill stake to Dufry in exchange for stock, and Dufry will launch a mandatory tender offer for remaining Autogrill shares at a €2.44 billion valuation.

The tender, to be offered in either cash or stock, is at a significant discount to where Autogrill shares closed on Friday.

The combined company would have 5,500 stores, including those that are located within 1,200 airports. 

The company foresees cost savings in rent, product purchasing and logistics. 

Yes, but: Synergies from the tie-up of airport and non-airport (i.e. highway) assets remain unclear. 

Of note: "The combination with Dufry is the second major deal in recent months for Alessandro Benetton, who took the reins at family holding Edizione earlier this year," per Bloomberg.

The bottom line: Travel was among the hardest-hit sectors during the pandemic, but the industry's recovery and pent-up demand internationally could buoy dealmaking.

2. The BFD: Dufry merges with Autogrill

Data: U.S. Census Bureau/FTI Consulting; Chart: Will Chase/Axios

Online retail sales growth may have slowed compared to its monster increase in 2020 — but the e-commerce share of retail continues to inch up, Axios Markets colleague Kate Marino writes.

The big picture: FTI Consulting projects that annual online sales will cross the $1 trillion mark this year, according to a report published this morning.

3. E-commerce's $1 trillion year

Lanvin Group, the Shanghai-based fashion group, plans to make more acquisitions later next year, Bloomberg reports.

“We are screening good targets in the market,” Joann Cheng, Lanvin's chairwoman and CEO, told the news service.

The report noted that skin care and beauty companies could also be considered.

In addition to its flagship French couture brand, the group also owns Italian footwear label Sergio Rossi, Austrian lingerie brand Wolford, U.S. women’s clothing label St. John Knits and Italian menswear brand Caruso.

Meanwhile: Both WWD and Bloomberg report that Lanvin Group is preparing to file detailed financials in the run-up to its public debut via a merger with SPAC Primavera Capital Acquisition Corp.

4. Retail therapy 

Illustration of a silhouette of head with a brain made out of price stickers.

• Deuna, a Mexican one-click checkout startup, raised $30m in Series A funding. Activant Capital led, and was joined by Valor Capital, Abstract Ventures, Acrew Capital and Upload Ventures. http://axios.link/mPl1

• Pure Archery Group, a Eugene, Ore.-based maker of archery products, is being acquired by JDH Capital Company, the Houston-based PE firm announced. Norwest Equity Partners lists Pure Archery as a current holding, but was not named in the press release as the seller. No terms were disclosed. http://axios.link/EQCv

• Graves Foods, a Jefferson City, Mo.-based foodservice distributor, is being acquired by Ontario, Calif.-based GS Foods Group, owned by PE firms Highview Capital and A&M Capital Partners. No terms were disclosed. http://axios.link/kEL6

5. Retail transactions

• Domino’s Pizza’s U.K. franchisee named Edward Jamieson as its new CFO. He most recently served as regional finance director for the U.K. and Ireland at Just Eat Takeaway. He replaces interim CFO David Surdeau. http://axios.link/dEPO

6. It's Personnel

Happy Monday, Retail readers. Richard's back!

🌎 Situational awareness: All Access subscribers — Join our Climate Deals colleagues on Wednesday for a conversation with Anthony Oni, managing partner and CEO of the Elevate Future Fund at Energy Impact Partners, and Eric Toone, CTO of Breakthrough Energy Ventures. Sign up.

July 11, 2022

1 big thing: Grocers eye food waste tech