International news analysis: DM's new private label at first glance

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German healthcare specialist DM-Drogerie Markt has launched its first organic grocery private label across its 12 European markets.

The retailer’s latest assortment, released under the DM Bio label, consists of 48 products.

DM is clearly prominent among the ranks of private-label pioneers in its home market of Germany. However, for its 25th own-brand range, it is focusing on products already well-established in the segment.

One reason may be that, despite having a firm grounding in health and beauty, DM is not as advanced in grocery - DM Bio represents the retailer’s first large-scale grocery private label.

The move indicates that the partnership with organic supermarket chain Alnatura - which supplies DM with its own-name brand - is in critical condition.

According to anonymous business insiders, there have been tensions between the two companies for months - partly because of negotiations over terms and conditions.

DM is also said to have approached some of the same suppliers behind the Alnatura lines for its new private label. It seems that rather than looking to new categories, DM has essentially replaced items offered under the Alnatura brand, with a clear focus on best-sellers.

Alnatura - which also sells its products via retailers such as Dohle’s Hit - is said to have contacted Rewe Group and Edeka as it reportedly seeks new partners. It is also readying an online shop, now that DM has de-listed significant parts of its assortment.

The DM Bio products sport a fresh, white design. However, the products are at present sorted by category and, therefore, grouped in among items from the Alnatura range. Some items are now only available under one brand, while others in similar category groups are sold under another. As a result, the grocery shelf lost some visual consistency.

Furthermore, shoppers may be a little disappointed. DM announced its new private label via several marketing channels to generate a buzz.

However, customers can now find the same products and prices as before, but under a different name. Some of these issues could be resolved in the near future as DM plans to gradually increase its offering. We look forward to DM showing some eagerness to experiment with the DM Bio brand and hope for innovations as exciting as those in the health and beauty private label segment.