Partnerships: Local Suppliers and Innovation

Products sourced from local suppliers in 2020

How we promote local production

We use specific symbols on some products to identify their local origin.

Such is the case of stickers with the colours of the national flag on Perishables, such as Fruit and Vegetables, and additional information on Private Brand products.

Support to Suppliers

The responsible way in which we try to manage our business also results in lasting and trusting relationships with suppliers. That is why we have implemented a set of economic stimulus and sustainable growth measures for the partners who grow with us.

Pingo Doce has been promoting since 2012, a measure implemented that is unique in the Portuguese retail sector. It aims to support national producers under a protocol with the Confederation of Portuguese Farmers, by shortening payment deadline to ten days (on average) for more than 370 fruit, vegetables, meat, fish, cold meat and wine suppliers.

Furthermore, in 2020, and as a result of a partnership with a Portuguese financial institution, around 100 Pingo Doce and Recheio suppliers received the payment of their invoices within an average of seven days, without any additional cost.

Ara also implemented an initiative in 2020, in partnership with BBVA in Colombia, to help the cash flow management of 280 suppliers, by offering early payment on their invoices at more favourable rates and without affecting their debt rating. Additionally, the payment time for Fruit and Vegetables suppliers was reduced from 45 to seven days.

Partnerships and innovation in the offer of local products

We seek to introduce innovative local products in our offer. These initiatives give consumers access to a diverse assortment, while stimulating partnerships with our suppliers and developing their skills. In 2020, support for domestic production became even more relevant in the context of the pandemic.

POLAND

In 2020, shopping receipts from Biedronka stores included information on which goods were produced, processed and packaged in Poland with a note reading “Dziękujemy za Twoje Wsparcie dla Polskiej Gospodarki” (Thank you for supporting the Polish economy), so that consumers knew how their purchases at Biedronka were contributing to the country’s economy and job creation.

Biedronka also invited 140 local small local farmers to supply the Company’s stores at a regional level, adding more than 200 products to its offer and providing training on the Quality and Food Safety standards required by the Company.

New communication channels were also created to help advertise the availability of these products and Biedronka’s website began to have a section that promotes domestically grown Fruit and Vegetables. Melons, apricots and peaches are just some of the examples of how the cooperation with local farmers reduced imports.

The Company has been working with strawberry suppliers since 2014 to decentralise its distribution network. Since it is a fruit with a short consumption cycle, mechanisms were created for a direct delivery to Distribution Centres and stores, thereby reducing the time between harvest and sale. In total, around 1,200 tonnes of Polish strawberries were sold in 2020.

PORTUGAL

In 2020, Pingo Doce implemented a special initiative to support domestic production, offering an outlet for perishable products that may have otherwise been wasted as a result of the sharp economic downturn. Over 1 million euros worth of beef from Portuguese breeds were bought at a higher price than what was being paid for national veal.

As a result of this integrated strategy, which included communication campaigns to promote the consumption of national products, we sold more than 440 tonnes of lamb from over 400 local producers, more than 1,600 tonnes of veal from over 1,400 smallholder farmers, more than 700 tonnes of national sausages, and around 120 tonnes of regional cheese.

In addition, Pingo Doce has also been promoting the sale of Private Brand national certified fruit with Protected Geographical Indication (PGI) and Protected Designation of Origin (PDO). In 2020 alone, were sold around 1,500 tonnes of PGI oranges, lemons and mandarins, more than 1,300 tonnes of PDO Rocha do Oeste pears and over 1,600 tonnes of PGI Gala, Golden and Starking apples.

Recheio, which for several years has been working with national producers to launch exclusive olive oil and wine references, launched the “Garrafeira de Excelência” (World-Class Wine Cellar) in 2020, a project for the exclusive representation and distribution of wine brands by small and medium-sized Portuguese producers. The goal is to combine quality wine projects with Recheio’s knowledge and scale, thereby giving them visibility in the HoReCa channel and in Traditional Retail.

Recheio also launched the “Compre o que é Português” (Buy Portuguese) campaign, in which all products with 100% Portuguese raw materials and/or made in Portugal were identified with a label of approval. In total, more than 4,100 different products from 300 suppliers were sold, corresponding to approximately 240 million euros in sales.

COLOMBIA

Thanks to its collaboration with more than 200 local suppliers, Ara had around 950 Private Brand products made in Colombia by 2020. Of note is Ara’s 100% Colombian produced Private Brand milk range, which resulted in the sale of around 75 million litres in 2020. The company also invested in sourcing locally grown Fruit and Vegetables, having increased the number of local suppliers from 38 to 73.