May 22th 2024 | 3:24

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Mercadona withdraws Pascual milk

Mercadona employee change shift

Maria Jose Gonzalez

April 18, 2024 | 5:40 p.m.

Mercadona has decided to remove Pascual milk from its shelves to strengthen its white label, Hacendado, marking another chapter in the supermarket chains' strategy of favoring their own products over those of external suppliers. This strategic decision is part of a growing trend that impacts large brands such as Leche Pascual, which is now seeking to diversify its sales channels to mitigate the effects of these policies.

The food distribution industry in Spain is witnessing significant changes in the relationship between supermarkets and their suppliers. Mercadona, led by Juan Roig, has chosen to exclude Pascual milk from its shelves in favor of promoting its Hacendado line, although it will maintain other Pascual group products such as Bezoya water and Bifrutas juices. This movement is not isolated within the sector; Similar strategies have been adopted by other major players such as Carrefour and Día, which have also readjusted their product offerings to promote their own brands.

Strategic response of Leche Pascual

Tomás Pascual, president of the company based in Aranda de Duero, has expressed a resilient perspective regarding this decision. Following the philosophy of its founder, Pascual emphasizes the importance of not depending excessively on a single client or supplier. This diversification policy has allowed them to mitigate the impact that decisions such as Mercadona's could have on their operations. «My father did not want to depend excessively on anything; neither from a bank, nor from a client, nor from a supplier. And he never wanted to have more than 10% of sales in the hands of a client," says Tomás Pascual.

Local market and adaptation

Curiously, Leche Pascual will continue to be available in Mercadona within Burgos and Segovia, where the brand has a strong presence and acceptance by consumers. This exception underscores the importance of understanding and adapting to local dynamics, a strategy Pascual appears to handle astutely.

The future of Pascual and independent brands

Faced with these challenges, Pascual is not defeatist: «I am worried about not being on all the shelves, but if someone doesn't want me to be there, I can't do anything. “I will try to be in the rest,” says the president. This proactive approach towards diversifying sales channels and finding new markets is crucial for any brand facing exclusion from large chains.

The trend of own brands

Mercadona's decision reflects a broader trend in the retail sector, where supermarket chains are increasing focus on their own brands due to higher profit margins and control over the supply chain. This poses significant challenges for traditional suppliers, who must adapt to a landscape where distributor loyalty can be volatile and heavily influenced by internal brand strategies.

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