Background Agribusiness Awards
How the milkman of the past inspired Picnic
With online supermarket Picnic, entrepreneur Michiel Muller (see photo) wants to surpass his success with the unmanned gas station chain Tango. They are trying to conquer the Dutch street scene with electric vans that look almost futuristic. At the same time, they apply the same principles as the milkman of the past. During the award of the Agribusiness Award of Boerenbusiness At the ABN Amro headquarters in Amsterdam, Muller shared with the audience the lessons he has learned as a successful entrepreneur.
His first major achievement was Tango, which was the first to introduce the unmanned gas station in the Netherlands in 2000. It became a resounding success. The idea behind the concept was quite simple: unnecessary costs were skipped. "The largest cost of a gas station is the staff. You need considerably less capital if you build new stations without a shop," Muller explains. In addition to lower construction costs, it saves space. That made the search for new locations a lot easier.
Yet, according to Muller, this was not the big secret behind Tango's success. "We were able to grow quickly because we provided ourselves with working capital, so to speak. Customers paid at the pump and a day later the money was in our account." Extensive payment terms of approximately one month had been negotiated with the French fuel supplier Total. The excise duties and VAT on fuel were only collected by the Tax Authorities much later.
To keep the costs low
After selling Tango in 2004, Muller continued. He devised, among other things, roadside assistance Route Mobiel and competed with ANWB. "From this adventure I learned that you can compete against strong brands, provided you play the game smart." Muller has been active in the food sector since 2015. Together with a number of partners, he invented the online supermarket chain Picnic.
Although Muller is very enthusiastic about the concept, the harsh reality is that no profit has ever been made. In fact, in 2022 the loss doubled to €208 million. Partly because consumers dropped out during the corona crisis, the company said.
Michael Muller
Yet Muller also thinks he can make Picnic a success. Just like at Tango at the time, the CEO believes the trick is to keep costs low. So no physical stores, but only online sales. This does mean opening up a new market, because only 20% of Dutch people do their shopping online. However, the market potential seems much greater. According to Muller, you would have to be crazy not to do your shopping online and get free delivery. As a consumer, you are, in short, the order picker in the warehouse of the traditional supermarket." In addition to the Netherlands and France, Picnic has recently also started operating in Germany, where they are working together with large supermarket Edeka.
The online market is growing rapidly, Muller notes. "In Amersfoort, more than 65% of consumers have downloaded our app, of which 31% have actually purchased something." The figures are hopeful, but the trick is to retain loyal customers. According to Muller, families with children are ideal customers. They buy a lot of fresh food and therefore return weekly. Picnic also focuses on good and affordable house brands. Unlike private labels in traditional supermarkets, online supermarkets do not have to be boring and decent. This is because they should not stand out 'as cheap' on the store shelf.
The modern milkman
Unlike the competition, Picnic does not have dozens of delivery times per day, but only one fixed time. A different delivery time every day in a specific neighborhood in a rhythm that is repeated weekly. For example, Monday afternoon at 15:00 PM, or Tuesday evening at 18:00 PM. "You should not want to tire the consumer with unnecessary choices. In this way we try to become part of the daily routine of customers, just as the milkman used to pass by at a fixed time during the week." This method saves Picnic a lot of logistics costs and CO2 emissions.
Muller cannot promise a better revenue model for the farmer, he responded to a question from the audience. "We have to compete with the rest of the market, and competitive purchasing prices are necessary."
As an entrepreneur, he knows that success cannot be achieved. "In addition to a good plan, you need a good dose of luck. An idea does not have to be perfect at the start. And once you have started, you cannot keep doing the same thing for years to come. That was possible thirty years ago Not yet and certainly not anymore."
Wouter Job
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