Ica took over – DN.SE

According to CEO Per Strömberg, Ica cares about small local suppliers and makes sure they make money too.

They do not always agree.

Here are some examples of how it can happen when Ica competes with small local organic producers and increases its own margin.

The Ewalie brand has become synonymous with organic gluten-free products such as bread, muesli, pasta. The brand and recipes were developed by Ewa Skiöldebrand, who was an expert on IG. First, a gluten-free crusty bread mix became a hit. Then came the big breakthrough: Ewalies Fröknäcke.

A tall black cardboard box with 150 grams of crusty bread, baked in Gotland according to the recipe of Ewa Skiöldebrand. She tested the amount of seeds, oils, water, tested the thickness of the dough on the plates and showed the bakers how to do it, so that the recipe would work for large-scale production.

Fröknäcket was sold through Ica Sweden and delivered to stores across the country. At most, it accounted for about 40 percent of Ewalie’s sales.

It sold a little too well, it would turn out.

– Ica constantly measures how products are sold, they can see it very easily in their system. This is how they develop products, says Ewa Skiöldebrand.

Suddenly there was a new package with miss crack in Ica, strikingly similar to Ewalies. The same tall black cardboard, the same bread and ingredients, even the flaked salt with which it was flavored. The bread was even baked in the same bakery, and according to Ewa Skiöldebrand’s recipe. The only difference was that the package contained 140 grams of bread instead of 150.

– They just changed the label to Ica Selection. Then they had an eight-sided display on the shelf and I got three or two. Then I got a face and then I was removed from the list.

A “face” is the number of boxes that can be placed next to each other on the store shelf.

By choosing which shelf to place your product on, you also control visibility. Many face, on the shelf at eye level, a slightly lower price – this is the recipe for increasing sales.

Now Ica used that logic “backwards” against Ewalie’s Fröknäcke. Sales fell. And when a product doesn’t sell as much anymore, it can’t defend its place on the shelf, either. What is not sold is removed from the list.

In Ewalie’s annual reports right now the numbers speak for themselves. Between 2016 and 2017, sales were cut almost in half, to just over five million.

In this way, through EMV, its own brand products, Ica competes with its own suppliers.

Ica’s strategy is to increase the proportion of EMV. Increase margins and profits. According to the 2019 annual report, EMV’s share that year was about 26 percent, just over a quarter and growing.

Ewa Skiöldebrand could not stay in the food industry.

In part, it was about Ica’s competitive methods, which greatly affected his business and personal finances.

– But it is also not possible to make money in the food industry if you are interested in quality products. There are fixed price levels for what the products should cost, a muesli that costs more than 60 SEK cannot be sold regardless of what it contains. Quality is never in dispute.

Now he works with health initiatives for various companies.

But Ewa Skiöldebrand is not just to get a product out of the competition.

After DN’s articles in mid-October about the “Ica ladder of sanctions” against food suppliers, several people have contacted to confirm the image.

Ica CEO Per Strömberg said in a comment that he “does not recognize the methods” and that Ica cares about local suppliers.

Here’s another example, which also applies to bread:

It began with a reader who reacted to the fact that Ica stopped eating the “Integral” bread, from the manufacturer Brödverket.

The bread of Ica itself was “full of additives,” thought the reader. Molasses, emulsifiers, sugars, acidity regulators.

Swedish Board of Bread CEO confirms that “wholemeal” bread has been removed from the list.

– According to Ica, it has been considered that we sold too badly, and then we changed the design of the bread to give it a chance, have better visibility and modernize it. But unfortunately he was not allowed to be away for that long 1.5-2 months before Ica said “thank you, but no thank you,” says CEO Anders Nilback.

According to Nilback, the exclusion was due in part to the fact that this type of bread sold slightly less.

– And of course Ica has launched its own EMV bread, he says in passing.

Anders Nilback doesn’t sound very deranged.

– We fully respect the Ica brands and see them as a competitor, he says.

When something goes from being a niche product to selling a lot, then you can count on it being copied by the EMV of chain stores.

– Then they compare the sales figures with their own bread, if we sell worse than a corresponding bread at a lower price, they think that we do not have the right to the shelf.

This is the same logic as in the case of Ewalie’s Fröknäcke. First you copy the product, then you compete.

And since Ica has dual roles as a buyer of products and a competitor to EMV – a competitor who determines the prices, the “face,” the placement on the shelves – it’s a game against a goal.

Often the market leader that is copied. The bread factory is the leader in the protein bread market. Now they are trying to find other ways to market the breads, among other things through a collaboration with the chain of gyms Nordic Wellness, with which they launch together a protein bread.

It benefits both companies.

– They communicate with their brand in stores and us on their social networks, says Anders Nilback.

Read more: Ica regrets the similarities with Ewa Skiöldebrand’s miss crack