The largest cross-border food retail merger ever…

Last modified: 28 November 2023 13:45
A glimpse into the kitchen at Ahold Delhaize, with Frans Muller, a CEO who also enjoys stirring the pots himself.

CEO Frans Muller discusses:

  • How he navigates the challenging retail landscape with slim margins, new disruptive players with e-commerce and flash delivery, and a global value chain that needs to become more sustainable.
  • How he can subordinate his personal short-term interests, simplifying the merger process of Delhaize and Ahold. What is his long-term goal, and how does he plan to achieve it?

Supermarkets played a vital role in food supply during the pandemic, and Ahold Delhaize, too, responded to the demand for more healthy, convenient, and sustainable food. Frans Muller, CEO of Ahold Delhaize, steers the supermarket business with a steady hand and a wealth of factual knowledge.

Jan Peter Balkenende and Arjan Groen have previously spoken in the Captains of Industry series with individuals such as Petri Hofsté, Kevin Entricken, and Frans van Houten. Now, they converse with Frans Muller.


Jan Peter Balkenende: “Who are your stakeholders, and what do you want to achieve for them?”

Frans Muller: “We want to have a sustainable business model in the context of our larger goal: eat well, save time, live better. It means making healthy and sustainable choices easy for customers and employees, contributing to local communities through our local brands, and reducing our CO₂ emissions. Focusing on serving all stakeholders, in turn, yields returns for shareholders. Additionally, it’s crucial for the company to continue growing. Without growth, you lose your raison d’être in our industry.”

Jan Peter Balkenende: “Can you say something about the DNA of the company? What sets you apart from others?”

Frans Muller: “Our nineteen consumer brands worldwide form a unique whole. Almost all of them started as family businesses a long time ago. With shared qualities such as courage, integrity, collaboration, care, and humor. We take care of our customers and employees, as well as local communities. An Ahold Delhaize brand is mainly recognized by that local aspect. And, of course, by good, fresh products, convenience, and innovation.”

Arjan Groen: “Actively steering consumer choices can help achieve CO₂ goals and improve consumer health. Do you do that, or do you see it as the government’s task?”

Frans Muller: “This is personally an important theme for me. Eat well is part of our goal, and we know that nutrition is crucial for health. With 7,000 stores, we are close to many people. With 414,000 employees and a leading market position in almost all the markets we operate in, we have a responsibility to show leadership. We serve 54 million customers weekly worldwide. We play a significant role in making healthy and sustainable choices easier. For example, through our SuperPlus program at Delhaize, where customers can get discounts on healthier products. We believe that providing good advice and information are powerful tools to achieve our goals, and we take our own responsibility. Many customers don’t always know what is healthy. Unfortunately, obesity and diabetes rates are still rising. We are working on how we can help counteract that.”

Jan Peter Balkenende: “At Shell, the court intervened to enforce improvement. What do you think of this increasing legalization?”

Frans Muller: “It is crucial for companies to do what they promise. So, we need to be transparent and accountable. This means that it can be expected that we provide clarity on what we promise publicly, both now and in the long term. We believe in ‘what gets measured gets managed.’ That’s why we have clear goals in four key areas within the strategy. It’s about increasing the sales of healthy products, reducing food and plastic waste, providing product transparency, and reducing CO₂ emissions. We integrate our sustainability report into our annual report, and all of it is independently measured and audited. Sustainability performance is also a significant part of my remuneration (15-20%). It’s essential that all instruments are streamlined and reinforce each other.”

Strategic choices

Jan Peter Balkenende: “Looking at your portfolio, would this be the moment to sell Gall & Gall? Given the focus on health?”

Frans Muller: “The question is: what problem do you want to solve? If you want to reduce alcohol consumption among young people, consider that Gall & Gall enforces strict age verification. If we sell our Gall & Gall stores, consumers will still buy wine, spirits, and beer, but from others. We prefer to take our responsible role.”

Arjan Groen: “What does the supermarket of the future look like? What generates revenue?”

Frans Muller: “The supermarket of the future is a complex business that is even more actively involved in the entire value chain, starting with the farmer. For the customer, it offers more online delivery options, more convenience, more healthy, and more frequently fresh products. I expect that our number of products in stores – now up to 60,000 – will decrease, and the online offering will increase. During the pandemic, everyone started cooking more. That changes buying behavior, and we see that in the store. Nowadays, I also spend more time in the kitchen; I like to prepare turbot. Since 1996, I haven’t eaten meat; I am a pescatarian, and it suits me very well.”

Arjan Groen: “Can Ahold Delhaize derive more benefits from combining health, food, and medicines? All the data to better serve the customer is essentially available.”

Frans Muller: “I think food retail has a unique advantage when it comes to promoting health: prevention is cheaper and more effective than cure. One of my dreams is to offer simple diagnostics, measuring blood pressure or cholesterol, in the store. And, of course, we provide information. At Etos, we now have a ‘Week of the Heart,’ which is especially important for women because their heart problems are less well recognized than men’s.”

Market value

Arjan Groen: “The valuation of supermarkets by shareholders is decreasing when comparing them in the S&P index with the rest of the market.”

Frans Muller: “The supermarket sector is sometimes labeled as boring; I call it a vital and reliable sector. It’s hard work, small margins, large volumes. But during the pandemic, we proved to be very robust and took responsibility for maintaining the food supply. Last year was exceptional in terms of results, but under circumstances I don’t like to see repeated. Some companies had extra wind in their sails, but that is diminishing now. 2022 is going to be a very interesting year for the sector.”

Arjan Groen: “When it comes to creating financial value, could a listing for or a separate IPO in the United States unlock value?”

Frans Muller: “We get that question more often. We do, in line with IFRS, a segment reporting. is indeed less visible because of that; we get a supermarket multiple for an e-commerce company. We continue to take steps to improve that; the question is whether a separate IPO in America adds much.”

Arjan Groen: “What would be the advantages of a merger with another major player, such as the American supermarket company Kroger?”

Frans Muller: “Mergers are highly situation-dependent; I won’t speculate on that. However, we believe that scale is important. In retail, we incur a lot of costs in the digital and technological field. If you can spread those over a larger turnover, it makes a big difference. So, it’s good to grow, especially through scaling within markets because that yields the most synergy. In America, we bought 70 Bi-Lo stores last year in an area where we are already present. Anything you can serve with the existing supply chain is attractive to us.”


Arjan Groen: “Is it conceivable that you will take further steps through acquisitions in new areas, such as q-commerce and e-commerce?”

Frans Muller: “Certainly, we have many partnerships and regularly engage in acquisitions. In the field of e-commerce, for example, we bought Fresh Direct in New York this year to gain market share and because they are very close to the farmers. They work directly with 150 farm businesses in the New York area and get everything two to three days earlier on the table. That is interesting, and we can learn from it. Verticalization through the acquisition of production is also conceivable, such as the meat factories we already have in America.”

Arjan Groen: “Large countries like France and Germany are missing in your European segment.”

Frans Muller: “Yes, that’s correct. We have a strategy that we want to be number one or two in all markets where we operate. We are also open to new countries, but such a step would only be possible through acquisitions. There must be something available there that fits in many respects, and that purchase must add value for all our stakeholders.”

Arjan Groen: “Can you export brands?”

Frans Muller: “Our brands can travel to some extent. They mainly have a strong local experience. Where possible, we do it. For example, we brought Albert Heijn and to Belgium, and Hannaford to other states in America.”

M&A Lessons

Jan Peter Balkenende: “How do you look back on the Ahold-Delhaize integration process?”

Frans Muller: “It was the largest cross-border food retail merger in the world. Ahold and the Delhaize group were two companies that were very similar.” Laughing: “I was immediately warned about all the things that can go wrong in a cross-border merger, in this case, between Dutch and Belgian companies. But overall, I think we did an excellent job, although it could have been faster.

What went well was the focus on culture and people. Both sides were involved and represented. I believe leaders should set aside their personal interests. Initially, I became the deputy CEO, and that was fine. The collaboration between Dick Boer (then CEO of Ahold and CEO of the combined entity) and me (then CEO of Delhaize) went well from the start, and I think many people noticed that. One tone and example from the top. We also saw that in the teams.

The synergy went according to plan, but looking back, we could have harmonized systems and processes in three instead of five years. In the meantime, we have reduced the number of IT applications from 700 to 300. The choice of the headquarters location is always sensitive. Once it was suggested: why not place it in Breda? Or in Amsterdam? But you also have to consider retaining talent and costs, so we are simply located in Zaandam.”

Jan Peter Balkenende: “What is your point on the horizon? What is your long-term vision for the company?”

Frans Muller: “My dream is to become the leading omni-channel company, both in vision and performance. We want to do that financially responsibly and be a leader in health and sustainability. With employees who feel at home with us. For that, we need to grow strongly, increase our scale, and reduce the number of products. Further consolidation within the sector is very likely, we always keep our eyes open. We will also explore further possibilities of verticalization through acquisitions of producers. It’s a long, exciting journey, but with a beautiful destination.”

Arjan Groen: “How do you think about divestments?”

Frans Muller: “It is conceivable that we make choices about what is more and less strategic. You will understand that I want to leave it at that.”


Ahold Delhaize was formed through the largest cross-border retail merger ever. The integration seems to have gone well, although it could have been faster. Growth is crucial in this sector, especially with increasing technological investments. CEO Frans Muller considers further consolidation in the retail sector very likely. The company is open to entering new countries, and acquisitions of producers as well as divestments are conceivable.

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