M-Industry wants to grow further abroad with exclusive brands

Migros has also had a store in China since last fall. It is called "Orange Garden" and is an online store where Chinese customers can buy Migros products such as Café Royal coffee capsules, Candida toothpaste, Frey chocolate and Milette baby shampoo (Werbewoche.ch reported). With "Orange Garten", Migros is testing how its products are received by Chinese consumers. At the same time, it is also a test run to see whether Migros can also grow abroad with online stores selling products other than coffee capsules.

M-Industry chose China as a test market because this market is growing strongly and the Internet is already an important purchasing channel in this country, as M-Industry CEO Walter Huber explained at a media conference in Zurich on Wednesday. China was also chosen because China allows the sale of products in their original packaging, said Huber. This is also what customers want, he added. "In the land of copies and imitations, consumers want the original."

Popular coffee capsules for businesses

As in all other export markets, Migros limits its product range in China to particularly Swiss products such as rösti or chocolate and strong own brands such as Café Royal or IceTea. However, M-Industry is also pushing ahead with expansion projects in other export markets. For example, new marketing and sales organizations were set up in France, the Netherlands and Spain in 2017.

The reason for this expansion is Migros' entry into the coffee business for business customers. Since winter 2016, Migros has been offering so-called coffee pods for the Nespresso Professional system under its Café Royal brand - with great success, according to Huber. Demand has far exceeded M-Industrie's production capacity, he said. M-Industry is therefore significantly expanding both sales and production.

Another growth area for M-Industry abroad is the cosmetics business. In 2017, the Mibelle Group sold more than half of its products abroad for the first time. M-Industry aims to grow in this business segment with strategic partnerships, among other things. This involves M-Industrie manufacturing entire product lines for other retail companies. The exclusive Lee Stafford brand, for example, is already on the market and can only be purchased in Boots stores in the UK.

Stagnating domestic market

In its international business, M-Industry increased sales by 14% to CHF 901 million in 2017. Overall, sales increased by 2 percent to 6.5 billion Swiss francs in the past financial year.

In the Swiss market, on the other hand, M-Industry only achieved slight growth of 0.4% to CHF 5.6 billion thanks to good business with major customers. In business with hotels, hospitals and care homes, growth was driven by the expansion of the range of products and services, among other things. For example, M-Industry established a digital platform in the beverage trade, strengthened its position in the fish trade with the integration of Tipesca and has also been supplying hospitals and care homes with medical consumables since May 2017.

Although the Swiss market is stagnating, M-Industry invested CHF 230 million in Switzerland last year. According to Huber, the focus was on expanding capacity, rationalization and digitalization.

Huber also sees digitalization as a great opportunity for Switzerland as a workplace. In 2017, M-Industry further expanded its workforce in Switzerland. It rose to 14,000 employees. According to Huber, there were no relocations of production abroad last year despite price pressure and expansion. (SDA)