SupermarketNews Magazine | August 2021 by Review Publishing Ltd

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August 2021 • Vol. 14 No. 7

A Wake Up Call (see page 8)

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ATTENTION GROCERY SUPPLIERS The Food and Grocery Council is an industry association for grocery suppliers providing members networking, events, industry information and strong advocacy. Contact us for information on the benefits of membership: katherine.rich@fgc.org.nz • Networking • Industry Updates • Conference and Events • Education and Training • Advocacy and Law Reform

food& grocery COUNCIL NEW ZEALAND

www.fgc.org.nz

This magazine is published monthly under license. Please direct all enquiries and correspondence to Review Publishing Co Ltd. This magazine is a platform for the industry and may include content that expresses views and opinions by contributing writers. Content is attributed to the author, and these opinions and the view/s are those of the author/s. They do not necessarily reflect the official policy or position of any other agency, organisation, employer or company. The opinions and material published in this edition are not necessarily those of the publishers unless expressly stated. All material appearing in the magazine, website and social media platforms is copyright and may only be reproduced with the written consent of the publisher. Copyright 2021

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food& grocery COUNCIL NEW ZEALAND

The NEW ZEALAND BEVERAGE COUNCIL is an industry association whose members cover all aspects of the non-alcoholic beverage market both in New Zealand and the export markets. The Council members are spread throughout New Zealand and come together annually for a conference that covers industry issues and is addressed by international speakers. The organisation monitors product quality, sets standards for the industry and runs national competitions and awards.

THE NEW ZEALAND BEVERAGE COUNCIL (NZBC) P.O. Box 47, AUCKLAND 1140, New Zealand. Email: info@nzbc.nz Phone: +64 9 309 6100 DDI: +64 9 302 9932

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A WAKE-UP CALL

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By Katherine Rich, Chief Executive, NZ Food & Grocery Council

"There’s been a lot to take in from the Commerce Commission’s draft report on their market study into New Zealand’s grocery sector.

here’s no doubt everyone wants lower grocery prices for consumers, and that’s what was behind the Government’s instruction to the commission: was competition working well, and if not, what could be done to improve it? As part of the study they looked at a range of things, including: how retailers deal with suppliers; competition at the supplier level of the market; who consumers buy groceries from and who supplies those retailers; competition between retailers; and what retailers charge for groceries and how they decide on their prices, as well as the associated levels of service, product ranges and quality of groceries. No wonder it took eight months to get to the first draft! They certainly did a thorough job – 517 pages of data and analysis – and it’s not over yet. It’ll be a further five months to get to the final recommendations to the Government. Their findings confirmed a lot of what the Food & Grocery Council had been saying for years. Our prices are the sixth highest of the 28 most-developed countries, and they concluded: “If competition was more effective, retailers would face stronger pressures to deliver the right prices, quality and range to satisfy a diverse range of consumer preferences.” What surprised were some of the options to boost that competition: existing retailers could be forced to supply other retailers on fair terms; their wholesale operations could

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be run separately from their retail business; room could be made for a new independent wholesaler; Woolworths NZ and Foodstuffs could be required to separate their wholesale and retail business into entirely separate companies. There were other options around stimulating competition, the most radical being requiring retailers to sell some of their stores to create a third retailer. There’s little doubt we need more competition in retail to reduce their margins if we are going to get closer to the sort of pricing New Zealanders expect at the checkouts, and it’ll be fascinating to see what the final report recommends to the Government on some of this. But of particular interest to the growers, manufacturers, processors and importers that make up the Food & Grocery Council were the commission’s findings on how the system was working at the supply end of the sector. Basically, they confirmed all the issues I have written about here in the past: that competition is not working well for suppliers for many reasons. While there was some positive feedback about retailers, the commission found a raft of issues which showed the negative impacts of market dominance. They summed it up like this: “Many suppliers have few options and are reliant on the major retailers to sell their products. This can create an imbalance of bargaining power, and the major grocery retailers can use their buyer power to shift costs and

risks onto suppliers, insist upon uncertain terms of supply, and limit suppliers’ dealings with other grocery retailers. This can reduce suppliers’ incentives to invest and innovate, ultimately leading to lower quality goods and reduced choice being available to consumers.” Apart from the recognition of the reality of life as a supplier in a duopolistic market was the commission’s agreement that a major way of fixing this would be a mandatory Code Conduct. The Food & Grocery Council has long pushed for such a code, and the commission said it would “help strengthen suppliers’ bargaining power with retailers and prevent current conduct which reduces and ability and incentive of suppliers to invest and innovate”, and that would flow into lower prices and more choice for consumers. We look forward to working with the Commission, the Government and other interested parties on the steps towards this. There’s no doubt the Commission has raised some very important issues and I hope the supermarket chains will take them on board. But it’s not just what goes on in negotiations in head offices and at store level – I’m also talking about what happens on the store floor around the treatment of our merchandisers. All-round attitude and the grocery culture needs to change, and I believe this study is a wake-up call that that must happen for the benefit of everyone."

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R eal The , r o ct ire

Leadership

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Gerry Lynch

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EXPECTATION TO WORK AFTER HOURS LEADS TO STRESS

"It’s Friday evening, 7pm and you have just had dinner with your family and are winding down from a tough week at work when the phone pings, and you get a feeling of dread. It’s your boss and he/she wants you to work on a report to be ready for Monday – There goes your weekend.

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ith the increase in working from home over the last year, the boundaries between work and home have blurred considerably. When do you sign off from work, when do you stop checking emails? A recent study, shows that simply thinking about afterwork email is causing us stress. In France, it's legal for employees to ignore work-related emails when they're not on the clock. German law prohibits managers from emailing employees outside of work hours, except in emergencies. So why in New Zealand do we allow this practice to continue? Being expected to monitor work emails 24/7 may take a toll on the mental health and well-being of both employees and their partners, according to research published recently in Academy of Management Best Paper Proceedings. Individuals who said they felt an obligation to check professional emails outside of traditional work hours also tended to report higher levels of anxiety and lower measures of well-being, the researchers found. This effect seemed to be true regardless of how much time individuals actually spent on their work accounts, suggesting that the mere expectation of being online was enough to take a toll. What’s more, the partners of these people

also reported decreased well-being and relationship satisfaction as a result. So what should good companies and good leaders do about this? Firstly, be clear about what your policy and expectations are and ensure every employee understands these – Ensure it is covered during induction. Set clear times when you will expect leaders not to email people in the organisation. The leader of the organisation sets the tone so if she or he states that they will not look at or respond to emails outside or work hours, unless it’s an emergency, then that sets a very clear tone from the top. If you are not the leader of the organisation, make clear to people sending emails outside of work time that you don’t read work emails and will review during work hours. A simple thing that you can do in Outlook is delay send an email to the following morning. Remember that you are not only doing this for the good of your team but for their family also. So get a life and make sure your team have a life by setting some boundaries and setting the tone from the top. I am passionate about building great leaders and high performance teams and cultures so if you need some help and want to be challenged to be your best drop me a line – Gerry@realleadershipNZ.co.nz."

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THE KIWI BEER BRAND THAT’S DEFINING TOMORROW Following its carbonzero certification announcement in November last year, one of New Zealand’s most popular beer brands has now rolled out new packaging for the full Steinlager range showcasing the carbon zero achievement of Aotearoa’s finest with carbon zero features on the underside of the bottle caps and Toitu shown on the bottle label and cardboard packaging.

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teinlager is committed to taking action against climate change and was excited to become the country’s first large scale beer brand to be Toitū carbonzero certified. To reach this significant milestone, every step in Steinlager’s product life cycle saw emissions reduced or offset, from growing the hops and barley, making the beer at the brewery, to bottles, caps, packaging and transport, right down to the length of time the beer will spend in the consumer’s fridge. The iconic Kiwi beer, owned by Lion, represents almost 10 per cent of the total New Zealand beer market, with Lion investing in Steinlager’s certification after successfully undertaking this process in 2019 with their sustainable beer brand, The Fermentist. “The decision to go carbon zero for Steinlager aligned with our broader sustainability strategy and was a multistakeholder process. Lion has a Science Based Target to reduce carbon emissions by 55 percent by 2030 (from an FY19 baseline) aligned with limiting global warming to under 1.5°C,” explained Simone Resentreter, external relations

manager at Lion. “It was always Lion’s intention to scale up learnings from going carbon zero with a smaller brewery to one of our blockbuster brands and we know that consumers are concerned about the environmental impact of products they buy and want action on climate change.” The Steinlager brand, sustainability and supply chain teams worked closely together throughout the process and from project inception to carbon zero certification it took around 10 months or so. The first step was meeting with Toitū to understand the process and agree on a plan. The process was extremely thorough and involved collecting and verifying data across the entire product lifecycle of the Steinlager range (from the hops and barley, the brewery, bottles and caps, packaging, and transport), followed by an independent audit and finally certification. The certification process is key and involved developing a specific Emissions Reduction Plan with targets on a 5-year cycle and then purchasing offsets to balance out Steinlager’s carbon footprint to ‘net zero’. “Our offsetting projects include protecting 738 hectares of Māori owned native rainforest In Fiordland and a Wind farm in Chitradurga, India.” Carbon offsetting is the last lever to be pulled, however, after working with suppliers and customers to drive down carbon emissions as much as possible. “Taking action on climate change is a core part of our sustainability strategy at Lion,” noted Kat McDonald, Lion Sustainability Manager. “We’re always looking at ways to reduce carbon emissions and will continue to in the future.” n

REFRESHED PANTRY STAPLES With the principle of making people happy by providing new taste experiences at the best price, Acton International Marketing was founded by Ray Thomas in 1977. Following the sun, Ray travelled the world discovering quality, innovative and exotic dishes. With his adventurous spirit, his understanding of global cuisine and knowledge of the New Zealand market, he created Golden Sun in 1987. With his son, William, now at the helm, the Thomas legacy continues within the New Zealand grocery market, bringing Golden Sun products to supermarkets - now with a bright and updated look. “We are transforming our packaging to place more focus on the farmers that grow our product and the suppliers that preserve our ingredients. It’s an

exciting move for Golden Sun, and we hope Kiwi’s will embrace our new look and improved source transparency,” expressed Lizzy Yeo, brand manager at Acton. Working with some for decades, Golden Sun has a strong relationship with its suppliers. “Our range is made up of produce that doesn’t naturally grow in New Zealand, or isn’t viable, but these are ingredients that New Zealanders want. So, we go to the places where our range of ingredients are the speciality, and we bring them to New Zealand.” Golden Sun visit farms and factories where the products are grown, ensuring a quality product. “Our suppliers have even come to visit us, to see first-hand how much Kiwi’s love our range.” The company is currently

working on some new product ranges, taking them to new countries and suppliers. “When we search for new suppliers, we look for companies that act with integrity. We want to work with companies that look after their staff, and their farmers. We want to support global communities all over the world.” Golden Sun is a heritage brand that wants to continue to provide Kiwis with its extensive range. Having not looked at its packaging for a long time, the brand felt like it was time for a refresh. “With consumers becoming more interested in where their food is coming from and what is in their food, we can’t just continue to be the affordable choice. We need to tell more of the story about where our ingredients come from. We need to stand out on the shelf and our packaging needs to communicate more than just an affordable price.” “This is why we want to share stories about where our products are grown, and about the farmers who grow our products. Our new packaging is one of the first ways we can do this, and when we launch on social media in

September, we’ll be able to share more stories about our suppliers and our farmers.” Golden Sun is thankful to be in a strong position since the outbreak of COVID-19 in 2020. The company protected its business by having a policy of always holding more than three months’ worth of stock in case of shipping delays or other unforeseen events. “It’s one of the key things that has help keep our business strong.” Golden Sun’s range has been part of New Zealand’s regular grocery shop for over 30 years. Its asparagus is number one in the canned asparagus category and its gherkins are number two in a huge and growing category. “Our jalapeños are the highest selling in the category – they have just the right amount of spice for your pizza topping or sprinkled over your tacos,” concluded Yeo. Since its creation, Golden Sun has grown from strength to strength, with an exciting and unexpected range of pantry staples. From sour sweet gherkins, tinned asparagus, to moreish Morello cherries. Golden Sun’s products are loved by Kiwis around the country. n

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THAT DREADED TELECOM MOMENT By Ernie Newman

stonishingly, it's 40 years since I worked in the grocery sector – as Executive Director of the then Grocery Manufacturers' Association, precursor to today's Food and Grocery Council. But when I saw the Commerce Commission Market Study recently, random memories came flooding back. For example, I realised that I could recall the names, faces, and companies of every one of the eight men (yes, all-male) who made up the GMA's Governing Committee in those days. More usefully, I had a flashback to a prescient presentation by our Chairman at the time to a GMA conference around 1983. He talked about the three "ages" the industry would go through in the coming years. Back then, he said, we were in the "age of the manufacturer". Manufacturers held most of the cards because they controlled powerful brands that consumer demand kept on the shelves and had dual trading relationships with individual stores and wholesalers. The next stage would be the "age of the retailer." Retailers would grab control by strengthening cooperative wholesalers, eliminating direct deals with manufacturers, and dominating the branding by focusing on house brands and generics.

The third stage would be "the age of the customer", at every level of product and service, customers spoilt for choice. Prices would become amazingly competitive, and the industry would have a dynamism as we had never experienced. With four decades of hindsight, he was right about stages one and two. The wholesalers and their tied retailers have achieved a dominance that seems to have the suppliers shaking in their shoes. But whatever happened to stage three – "the age of the customer?" The Commerce Commission could hardly have been more damning. Supermarket profitability is "consistently and materially" above comparable countries. Competition between retailers is "weak," major retailers actively limit competition between their retail banners, and new entry has been non-existent since 2006. NZ ranks as one of the most expensive OECD grocery markets, and "excess returns" are made by the big two. The only comparative country that has more expensive groceries in all categories is Iceland – perhaps understandable as it's not the most hospitable place to grow food. These are not just vague opinions of the Commission. A massive volume of evidence

backed up by 517 pages of painstakingly argued economic data is at the top of my reading pile. So we're not in the "age of the consumer." Somehow the New Zealand grocery industry morphed into the "age of the retailer" but then stopped for a very long profitable break. The surprising part is that nobody blew the whistle earlier. As consumers, we've all known that grocery prices are over the top compared internationally – we've seen that every time we've travelled. Most know that underlying the apparent competitive tension between the various banner groups, it's just two "Mr Bigs" that control our grocery market. We've all known that behind the façade of loyalty schemes and constant price specialling, there is only one winner, and it isn't us. Sixty percent of our groceries, according to Nielsen, are purchased on promotion. The telecommunications sector openly admitted "using confusion as a marketing tool." Sound familiar? The similarities between the telecommunications and grocery sectors, once they finally got the full attention of the regulator, are many. You have to wonder whether the industry leaders solely focused on maximising the year's profit and bonuses. In both cases, they forgot about the danger they created for the very survival of

their business models over the medium to long term. So what will happen now? The government will act. Despite its reputation for too much talk and too little action, it cannot afford to put the Commission's work in the too-hard basket. I'd pick either some form of structural separation, an enforced selloff of some stores, or action to bring in a third entrant. Economists argue that three players are the magic number where the tacit collusion the Commission has identified becomes far less likely. Whatever the outcome, I would predict a much better grocery distribution sector will emerge. That's what happened in telecommunications. Telecom, forcibly split back then, became Spark and Chorus, both highly successful and profitable. Alongside them, scores of smaller retail telecommunications companies entered the fray. New Zealand went from the absolute bottom of the OECD for telecommunications services and pricing up to the midrange. I predict the same in the grocery industry. That sounds to me like we can enter the age of the consumer. The GMA Chairman I recalled might have been right – just his time scale was out of whack. Change is coming, and with it, new opportunities for all. Let's all look forward positively."

Ernie Newman is a Waikato-based consultant who worked as a lobbyist in the telecommunications industry in the 2000s when he was at the heart of the campaign for more competition and the grocery industry in the 1980s. He advises many clients, including the Food and Grocery Council. The views in this article are entirely his own.

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PROPER CRISPS MARKETING MANAGER NIKKI NEATE (PICTURED IN THE CONVEX PLANT) IS WORKING CLOSELY WITH CONVEX TO EXPAND THEIR COMPOSTABLE PACKAGING RANGE.

UNPACKING THE BENEFITS OF COMPOSTABLE BAGS This year marks 25 years since Convex New Zealand launched their first home compostable pack. They are now using their in-depth understanding of sustainable packaging materials to help supermarket brands navigate the unchartered territories of compostable and recyclable packaging.

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ince purchasing their first compostable resin in 1995, Convex has developed a string of planet-friendly innovations including their Econic home compostable packaging range used by eco-conscious market leaders like Proper Crisps, Ceres Organics and Trade Aid. They have also pioneered several recycling innovations, including their recently launched plastics #2 and #4 recyclable pouches. Convex Managing Director, Owen Embling, is passionate about producing packaging that is both eco-friendly and functional, and he encourages everyone he works with to treat their packaging as an asset that can be recycled, reused, or composted at the end of its life. Owen says, “We are 100% supportive of the move away from single-use plastics and applaud the supermarket trade for helping drive that move. We endeavour to add to that positive move by helping businesses transition from single-use plastic to a more sustainable alternative

that delivers the performance and shelf life they need at a reasonable price.” With the current demand for sustainable packaging moving faster than the available materials, technology, and infrastructure – and many different packaging options claiming to be eco-friendly - there have been questions raised about which ones really are good for the environment, particularly in the compostable space. RECYCLING BY NATURE Owen says, “Compostable packaging offers the ultimate ‘closed-loop’ planet-friendly solution, by allowing packaging waste to be made into compost that adds nutrients back into the soil.” Although the development of compostable packaging has been constrained at times by the high cost and limited availability of materials, Owen is confident these challenges will be overcome as new technologies emerge. Owen says, “Compostable packaging is not the answer

for every packaging need, but it does have a lot of exciting applications that we are continuing to actively explore.” “It’s a mistake to think of home compostable packaging as `single-use’. I prefer to think of it as `recycling by nature’ as that is what actually happens when it is composted, which I am confident will happen more frequently as consumers become aware of their disposal options and our composting infrastructure expands.” MAKING END-OF LIFE COMPOSTING EASIER Owen regularly fields objections about the current lack of composting facilities and is adamant there are solutions. He says, “Several commercial composting facilities have tested the breakdown rate of our compostable offerings and have agreed to accept and compost them, and some of our Econic customers have implemented initiatives to collect and compost used bags from their customers. We have also set up collection bins at

all our offices where our used Convex compostable packs can be returned for composting at our Hamilton plant. I am confident that as time goes on, there will be more options to compost used packaging and it will one day become as normal as consumers taking their own shopping bags to the supermarket.” CERTIFICATION SOLUTIONS Another big topic Owen often gets asked about, is certification. All the individual flexible films Convex uses to make Econic packaging have been certified as home compostable. However, because Convex specialises in customising Econic, which can cause variations in things like ink coverage, each completed pack variant needs to go through a certification process to be marketed as `certified’. Owen explains, “What many people don’t realise is that the bio-degradation testing required for home compostable certification has only just become available in New Zealand, at a cost of

around $35,000 per item plus a 12-month lead time. Despite these hurdles, three of our Econic customers, including Proper Crisps, are actively pursuing certification for their packs and we are working to get some of our standard Econic packs certified as well. We are also exploring ways to share the cost of certification across multiple customers using the same film structures to make it more affordable. The one thing I can assure everyone, is that every home compostable pack we make has been thoroughly tested to ensure it will break down in a typical home compost environment.” THE DIRECTIVE TO CHANGE The New Zealand government has already made a directive to move to packaging that can be reused, recycled, or composted, and Owen believes consumers will increasingly get on board to drive this change. Owen says, “It’s time for us to all work together to find workable solutions that will make it easier for consumers to make the change.” n

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FONDNESS FOR LOCAL PETFOOD DRIVES NAME CHANGE After almost 50 years satisfying the appetites of New Zealand dogs, Kiwi petfood company Fond Foods is changing its name. Best known for its popular Superior Chunky and Possyum brands, the Paeroa business will become Superior Pet Food Co. from 1 September. General Manager Clint Bolderston said the new name reflects the company’s growing reputation as New Zealand’s leading manufacturer of highquality dog food. “The Superior Pet Food Co. name clearly communicates our mission to make top notch pet food that dogs love. It builds on the legacy of our existing Superior

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Chunky brand and is a significant step forward in defining our identity and positioning us for a successful future.” The business will celebrate its 50-year anniversary in 2023, marking a major milestone in its journey from a small upstart serving food to New Zealand’s rural dogs to one that has become a household name across Aotearoa. “We’re proud of our history and the people who moulded the company into the industry leader it is today – a wholly New Zealand-owned business that stands out in a market flooded with huge multinational competitors.”

The companies key dog food brands – Chunky, Possyum and Ranchmans – will all remain the same, along with the branding for its Chunky and Possyum NZ natural dried dog treats. Field and Forest – Hypoallergenic was recently added to the company’s product range, blending premium possum meat with chicken and lamb to create a fresh option for dogs with allergies to beef and dairy foods – a common canine issue. “Chunky continues to be our best seller but we’ve seen a growing demand for our more premium range of possum-based rolls,” Bolderston said. “More than 100,000 kilos of possum

meat is now devoured by Kiwi dogs each year in the form of our Possyum and Field and Forest – Hypoallergenic dog rolls.” The possum meat used the company’s dog rolls is sourced from processing facilities licensed by the Ministry of Primary Industries, helping to create jobs and reduce New Zealand’s pest population in the process. Fond Foods produces more than 3,500,000 kg of dog food per year for domestic and international markets. The company’s extensive range of dog rolls and treats are available across New Zealand in supermarkets, rural supply stores and vet and pet specialty stores. n

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PARTNERS IN GROWTH! “Do you want to accelerate your brand’s growth in the New Zealand grocery and foodservice channels? It may be time to review your route to market in the ever evolving retail landscape. Acton International Marketing (Acton) is a leading New Zealand sales and marketing agent that specialises in building long term partnerships with brand owners that delivers year-on-year growth. HOW MUCH DO YOU WANT TO GROW? Call our Business Development Manager or General Manager on the numbers below to discuss your business needs and growth aspirations. We are happy to arrange a no obligation meeting with our internal sales, marketing, logistics and trade experts to discuss your business needs and brand growth aspirations. Acton will then provide a tailored proposal with clear growth targets for your consideration.

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WE DELIVER GROWTH Acton takes pride in the success it has achieved for itself and its brand owners. In partnership with our brand owners we have again and again demonstrated the ability to take brands from launch to market leader in their respective categories. And while we recognise and respect our past successes, we are continuously adapting our business to remain best in class. TAILORED SERVICES TO YOUR NEEDS Acton will tailor its services to best support your business growth, from merchandising services, brokerage, to a full service distributor based on your specific business needs. There is no one size fits all solution when it comes to your brand. It takes careful discussion and planning to understand the right routes to market that delivers the greatest success and value to your business.

Different sales channels have different needs and brand success relies on understand the customer and consumer needs when representing your brand. Benefits of moving to a Full Service Distributer or Brokerage model • Greater focus on core strengths. • Business simplification. • Optimised organisational structure. • Leveraging Acton’s customer relationships. VALUED BY CUSTOMERS The first step in brand growth is the ranging and support of our customers. Retail and foodservice customers highly value Acton’s sales, marketing and merchandising teams in supporting their sales targets and margin expectations. We have strong key account management for each of the major retailer groups as well as dedicated key account management for foodservice, industrial and Asian/ independent grocery. Our key account managers are supported on the ground by a field sales team of 14 Territory Managers and 65+ Merchandisers. All our field sales team are equipped with real time CRM technology that optimises

field sales productivity and sales results while providing up to the minute reporting on your brands activation plans. PARTNERSHIPS THAT DELIVER LONG TERM GROWTH Strong partnerships that deliver year-on-year growth are the core of our business. Ray Thomas founded Acton over 40 years ago and many of the relationships he established then still endure today. We value the stability long term partnership provides to all parties and the confidence it gives to invest in brand growth. CONTACT US TODAY! Come and talk to Acton team at any time about your brands, we are participants in a fabulous industry that we care about deeply and we will always enjoy a discussion with likeminded people. We may not do business together but we can certainly build a link between our businesses to the industry we work in.” Contact Gavin Siegel, 021 875 912, gavin@acton.co.nz, or Simon Gordon, 0275 500 243, simon@acton.co.nz or visit www.acton.co.nz.

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From concept to closing date and everything in between, we lead the way in creating instant winners with simple mechanics utilising bespoke fun game entry interfaces that deliver on your digitally agile customers’ needs in real-time. Scratch a virtual card, spin a prize wheel, shake your device or simply swipe to win – whichever works best for your product or service, BTL can make it engage your audience and deliver record results for your brand.

bob@btl.co.nz

kirsty@btl.co.nz

This market is prime for promotion*, and we can help. Did you know we also have promotional merchandise and experiential marketing divisions? And yes, we can even do wobblers – with lights of course! GROUP *IMI Promo Track 2021

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CHANGING CONSUMER PREFERENCES Why values are the new drivers of customer loyalty By Stephen Walker, Regional Director, Toluna, New Zealand

"Despite being relatively sheltered from the COVID-19 pandemic, the events of the last year have markedly impacted the attitudes of New Zealand’s consumers. In addition to living through a global health crisis, the economic concerns and major political, social and environmental issues raised over the past year, have drastically changed consumer behaviour.

tore closures saw some Kiwis shopping online for the first time, while scarcity in supermarkets forced shoppers to try new brands. Life-long habits were broken during a time when deep seeded beliefs were being challenged. The research shows us that as a result of these dramatic events, consumers’ priorities have changed. Kiwis have found themselves re-evaluating the things that matter most to them - health, family, their finances, and the environment. As we emerge from the pandemic, brands now have to find ways to engage their customers in order to remain relevant. VALUE DRIVEN DECISIONS Brand loyalty has always played a big role in purchasing decisions, but it’s no longer something brands can take for granted. Coming out of the pandemic, consumers are now more inclined to support brands whose values align with their own. In fact, our recent Barometer showed that 73% of New Zealand shoppers are more likely to buy from a brand that aligns with their values, while a staggering 40% have stopped purchasing those that don’t. These are not numbers brands can afford to ignore. The same research showed

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that just over half (52%) of Kiwi shoppers prioritise sustainability and environmental friendliness as a core value. This is supported by 56% who now actively try to buy food and drink products with less plastic packaging. Humanitarian issues (34%), as well as supporting racial equality (29%) and gender equality (24%) are also key issues for Kiwis. There has also been a growing support for New Zealand made and owned products. Nearly two out of three (64%) Kiwis are now trying to buy more food products from New Zealand or produced locally, than they were before the pandemic. SERVICE AND VALUE FOR MONEY STILL KEY Traditional brand values, such as customer support (37%), continue to remain important and will likely always be key a consideration. However, these shifting attitudes show that consumers are demanding much more than good service, so it’s natural that their loyalties will align with brands that understand what’s important to them. Economics do still drive purchasing decisions, with value for money listed as a core value for 60% of Kiwis. This is unsurprising given the same research showed that 44% of NZ shoppers report to

be more price sensitive when shopping compared to how they were before pandemic, and that 34% are concerned about their financial security. But while value for money might be driving some purchasing decisions, brands would be unwise to focus on pricing alone, with so many shoppers also swayed by environmental, social and political issues. BRANDS MUST STAND FOR SOMETHING As the importance around values grows, brands will increasingly need to stand for something. Brands will need to demonstrate their participation in culture, society and politics; they will need to show that they are environmentally friendly or that they support humanitarian issues – and they’ll need to clearly communicate these values to consumers. Because of the shift towards values based purchasing, brands must now look at ways to reposition and market themselves differently. Consumers want to engage with brands who share common values, so brands need to make it easy for consumers to understand what a brands’ values are. But it can’t just be lip service – our recent Barometer shows that 84% of New Zealanders believe brands need to be accountable

to consumers. Brands won’t be able to get away with simply stating they stand for something and not follow through. In a climate where 40% of Kiwis are dropping brands that don’t align with their values, a brand’s actions have never been more important. MONITORING TRENDS The world has changed, and consumers have changed. So brands will also need to change in order to remain competitive. The post-pandemic landscape is more fragile than ever before and it has become clear that the days of doing things the way they’ve always been done and expecting similar results are over. But it’s not all bad news. The concept of customer loyalty itself isn’t dead – it’s just that the thing that drives it has changed. If brands are clearly able to communicate their values and prove that they stand for something, then there are endless opportunities to reach new customers who are looking for brands whose values align with their own. Of course, values will differ from consumer to consumer, which is why it’s critical for brands to have access to accurate, on demand consumer insights to truly understand and connect with their consumers and intelligently inform their strategic decision-making and planning."

INSIGHT SERIES: MARKET ENTRY MODELS As part of the Insight Series, watch Sarah Mitchell from New Zealand Supermarket News interview Cameron Gordon, Partner at Incite about what market entry models are available for New Zealand grocery brands when entering South East Asian markets.

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ameron explains the three key models; In-Market Importer and Distributor, Consolidator and Third Party Logistics provider (3PL) and the pros and cons of each. He also comments on why dealing directly with Supermarkets in South East Asia has its challenges and suggests the most effective model. Incite is a Food and Beverage Export Development Agency, specialising in launching New Zealand, Australian and

British brands into 8 high growth Asian markets. They help clients to quickly determine the right markets and entry model for their products, understand the local regulations and develop the perfect pitch to take products to market. Then, they use their extensive network to broker the right distribution partnerships and get sales moving. For more information, email getincite@exportincite.com or visit www.exportincite.com. n

Paragon

MultiPlex Ltd

Total Sales and Marketing Solutions

Paragon MultiPlex Ltd are a privately owned

company offering a wide range of services within the narrow supermarket and independent grocery sectors. One gains considerable experience and builds robust relationships when working within New Zealand's highly concentrated and competitive grocery industry over 35+ years as a distributor and outsourced sales force. Experience and industry insights shouldn't be taken lightly. Our team at Paragon MultiPlex certainly don't and the successful brand building that we have been involved with over this time is testament to the values that we place on these attributes. Never more have these particular attributes been called for or valued than they are in today's rapidly changing grocery landscape. We know what works

and how to deliver results. We are not afraid to ask the hard questions, either at the retail level or further up the chain, or of our suppliers. If this sounds a little uncompromising then ask yourself, are you happy with your market penetration? Do you know what your category managers are looking for? Do you know how to deliver what they are looking for? Are your relationships robust enough to have the hard conversations with all parties? The Paragon MultiPlex team can say yes to all of this and what's more we can point to successes to support our proposition. If you were to partner with us we can offer you real-time

insights into retail activity at shelf level, excellent relationships right across the grocery sector right up to senior management level. We constantly survey activity reporting on success and failures alike with these reports being shared with you on a daily, weekly or monthly basis. If you are finding it tough to build your brand, are unhappy with your current sales regime, or simply want some assistance, reach out and give us a call.

Contact us on 03 354 4065, email Sales@paragon-multiplex.co.nz or contact Phillip via Phii Iip@paragon-multiplexco.nz, 027 432 0349.

MTN&fM[

keepin' NZ Fresh!

--lOOYEARS--

(Mestemacher) -the. h�fi(fe.-l'J�

To seek a little information on our services or simply to have a talk and compare what you have with what you would like and what we can offer, simply call Phillip on +64 27 432 0349 or email him at Phillip@paragon-multiplex.co.nz

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1. POWERED BY PROTEIN

Designed to help fuel and replenish your body and build muscle, Strength Meals Co high protein frozen meals have just arrived in NZ. The exciting new range of delicious high protein frozen meals no longer means consumers have to choose between convenience, nutrition, quality and taste. Food prepping may be cool, but nothing beats a quick and easy meal – especially when it’s healthy, delicious and packed full of protein. The Strength Meals Co range takes the hard work out of meal times with its selection of perfectly portioned, macro balanced meals designed to support an active lifestyle. All Strength Meals Co are designed by chefs using nutrientrich real ingredients, vacuum sealed and snap frozen for freshness. There are no hidden nasties or added preservatives – just the perfect protein fix that’s nutritious, delicious and the ultimate in convenience. Available in Italian Pork Pasta, Butter Chicken, Braised Beef Ragu, Chicken Paella, Pulled Beef Lasagne, Lemon Pepper Chicken, Spinach & Ricotta Tortellini, and Satay Chicken. CLICK HERE FOR MORE

2. NOT SO BORING AFTER ALL

Introducing Boring Oat Milk, a New Zealand made oat milk using New Zealand oats. Boring Oat Milk is an audacious addition to the vibrant plant milk category. Launching this spring into stores with two varieties, original and barista grade, it’s great for the coffee pros and everyday milk stuff at home. Boring is boringly similar to regular milk, just without the actual milking bit. There is no added sugar, is vegan friendly, contains no thickeners or gums and the bottle and cap are 100% recyclable. It doesn’t even come from anywhere fancy it’s made right here in New Zealand using South Island oats. Consistency, texture, taste, sustainability, the team at Boring take care of all the boring details so you can focus on what you do best. Boring is good. Actually, Boring is pretty damn great. For more information visit www.boringmilk.com or email hello@boringmilk.com.

3. BEFORE COW

Thousands of years ago, no one milked cows. So, when your ancestors needed fuel to do their thing, what did they milk? The family goat. They were on to something. Goat’s milk naturally contains A2 proteins, and has vitamin A which is great for skin health and immunity. It can also be an alternative for people who are sensitive to cow’s milk. Now, 9000 years later, consumers can enjoy a delicious milk with all those benefits with Before Cow Goat’s Milk. Best enjoyed wherever you’d normally use milk: cereal, coffee, baking, luxurious milk baths. Before Cow is produced by Oete and Oakdale Goat Farms, owned by Matt and Sarah Bolton and managed by a group of dedicated individuals that strive to provide a happy healthy environment for all the animals, and the highest standard of quality for food production in the country. They've made a name for themselves crafting extraordinary yoghurt with an unbeatable taste since 2010. Now, as a pivotal step in their sustainability journey; The Collective are shaking up the world of plant-based food and are the first New Zealand dairy brand to offer a plant-based range in yoghurt and more recently; fresh plant ‘milk’!

4. MADE FROM PLANTS

Filta’s Made from Plants series of products are made from renewable and ethically sourced bamboo and cotton fibres. It’s part of the brand’s commitment for more eco-conscious cleaning solutions. It’s range of quality bamboo cleaning cloths are ecologically friendly, sourced from an ethically sustainable and renewable resource that does not harm nature. The cloths are highly absorbent, cleans surfaces easily, and feature durable fibres that can last over 100 washes. Antimicrobial properties of the cloth mean a more hygienic clean. Eco-friendly packaging allows consumers to place into their recycling bin and the plant fibres will break down naturally when disposed of.

5. WHITTAKER’S GOES NUTS

Whittaker’s has released its new Artisan Collection Canterbury Hazelnut in Creamy Milk Chocolate 100g block. Whittaker’s Artisan Collection celebrates New Zealand’s finest home-grown ingredients, and this is the first flavour that features premium produce sourced from the Canterbury region. Whittaker’s Canterbury Hazelnut in Creamy Milk Chocolate combines roasted Canterbury hazelnut pieces, sourced from Canterbury hazelnut co-operative Hazelz, with a silky-smooth hazelnut paste and Whittaker’s 33% cocoa Creamy Milk Chocolate.

6. ADVENTUROUS NEW FLAVOURS

Premium Potato Chips is one of the fastest growing segments in Salty Snacks and is driving category growth. Innovation is key to stimulating growth with new and exciting flavours that meet the adventurous taste preferences of premium shoppers. Introducing two new flavours from the Kettle Chip Company – Kettle Chip Company Thai Chilli & Wild Lime - a flavoursome balance of heat, tangy and sweet, with a kick of garlic and twist of lime. Kettle Chip Company Herb & Spice - a perfect combination of secret spices including tomato, garlic and paprika. Available for a limited time only. Available from all leading supermarkets.

7. SILKY PUNCHBOWL

Tuatara has released a new beer - Tuatara Hazy IPA. Available in a 330ml 6 pack, this golden and light copper IPA features passionfruit and mango fruits followed with grapefruit. It tastes like a smooth and silky punchbowl, fillwed with passionfruit and mango flavours followed with a pinch of lime and grapefruit. Perfectly paired with Mexican pulled pork with coriander and mango salsa.

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8. GRAB AND GO SNACKS

Turkish Kitchen are always striving to create healthy meal solutions and have a focus on creating tasty, healthy options for all Kiwi’s to enjoy. Their new Snack Packs feature a clever, practical design where the falafels are shaped into ‘Fingers’ are baked not deep fried, for healthy consumption and made the perfect size for dipping and snacking, much easier for children to enjoy too. Turkish Kitchen's new Snack Packs come in two appealing flavours, the first Traditional Hummus & Basil Falafel Fingers (vegan) the second- Tzatziki (Jadjik) & Spicy Falafel Fingers (vegetarian). For more information, please click here.

9. LATEST CHIP CREATIONS

The team at Heartland are thrilled to be able to share its latest chip creations with consumers. Meet the all new ‘Drinks Range’ of Kettle Cooked Crisps from Heartland. As you will know, alcoholic drinks are used in many famous foods around the world, adding unique flavour and character……so the team at Heartland thought they would use that same thinking in its distinctive new range of delicious crisps. Available in Gin, Lemon and Thyme, Bourbon BBQ and Margarita Salsa.

10. SMALL BUT MIGHTY

Lotus Biscoff proves that you don’t have to be big to stand out. If you’ve been looking for the perfect match for your coffee, your dreams have come true, the world-famous Lotus Biscoff biscuits have finally arrived in New Zealand. Biscoff cookies are baked using the original recipe created in 1932 and all Biscoff cookies are baked in Lembeke, Belgium by Lotus Bakeries. The word ‘Biscoff’ is derived from the combination of the words biscuit and coffee, simply because their caramelised flavour and crunchy texture make these biscuits the perfect accompaniment to a cup of coffee or espresso drink. Made with non-GMO ingredients, the crunchy, delicious Lotus Biscoff biscuits are vegan friendly and contain no artificial colours, no artificial flavours, and no preservatives. CLICK HERE FOR MORE

11. DELIVERING UNBEATABLE TASTE

The Collective are proud as punch to have launched an entire Plantbased flavoured ‘milk’ range to the family made from a unique blend of oats, coconut and rice. Produced fresh right here in New Zealand this deliciously creamy drink delivers an unbeatable taste. Launched in February ‘Choccy’ is now being joined by ‘Caramel’ - both a good source of calcium, vegan, soy/nut free, and bottled in both 700ml and 350ml recycled plastic packaging that can be recycled again and again across New Zealand. Available in supermarket chillers, from mid-August. For more information visit www.thecollective.kiwi.

12. THREE NEW CUTS TO ENJOY

Premium New Zealand meat company First Light has a reputation for only the very best grass-fed Wagyu beef and venison, produced by a cooperative of passionate farmers across the country. Now, there are three new cuts to enjoy – raised to exacting ethical standards on pasture where animals can roam free. First Light’s venison medallion with Lewis Road Creamery Butter is a delicious collaboration that takes home cooking to another level. This perfectly portioned venison steak, which comes with a serving of Lewis Road garlic and parsley butter to baste and then drizzle over your meat, is an ideal date night or dinner party option. After fielding plenty of pleading emails requesting it, First Light also adds a beautifully marbled Wagyu flat iron to its chilled range. A fabulous option for steak and chips, flat iron is also fantastic seared and sliced into a salad. Finally, a First Light Wagyu fillet joins the family. Dubbed “unscrewupable”, this jawdroppingly beautiful steak is tender, soft and juicy no matter how it’s cooked. A sure-fire crowd-pleaser rare, medium or well-done.

13. AN ICON NOW A DRINK

The country’s most iconic ice cream flavour is now available to drink straight from a bottle. Lewis Road Creamery has launched Hokey Pokey Flavoured Milk – the premium dairy brand’s unique twist on the quintessential Kiwi flavour. Famous for its Fresh Chocolate Milk that sent the country into a frenzy back in 2014, Lewis Road’s latest flavoured milk blends its fresh whole milk with a specially crafted hokey pokey sauce and natural honeycomb and vanilla extracts to create the distinctive caramelised flavour that our country is famous for. “At Lewis Road we love nothing more than to celebrate the food history of New Zealand. And we also take pleasure in innovating and creating dairy that Kiwis just love to love. So, we thought why not combine the two? “The result is the collision of quintessential Kiwi with a twist of Lewis Road magic. It’s creamy, delicious and full of childhood memories."

14. ATTENTION PEAS!

The charming chickpea has been around for over 7 500 years, native to many cuisines… but you’ve never seen them like this before! Harvest Snaps are proud to announce the launch of our new Chickpea Crisps in three exciting flavours: Roasted Capsicum, Sweet Potato & Miso and Coconut, Lemongrass & Turmeric. Perfect for adventurous taste buds looking for their next chickpea fix, these tasty bites have all the benefits of the rest of the range being gluten free, vegetarian friendly and containing less sodium compared to regular potato chips. Coming to New Zealand in August contact sales@houseff. co.nz for more information. So if you are looking for your next snacking fix, just remember…. There’s a Snap for that! 15. A NEW FAVOURITE Fix & Fogg have taken their award-winning Everything Butter, added rich New Zealand made chocolate and mixed in chewy berry pieces to create your new favourite spread. It’s crunchy, chewy and the perfect amount of chocolatey.

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A COMMUNITY OF GOOD FARMERS Sven Baker founded the Good Farmers NZ brand so likeminded farmers could join a community that would help change farming practices in New Zealand, help build a strong consumer brand, and give customers confidence in their produce purchases.

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ven Baker is a city boy. He used to work as a creator in Wellington, building both large and small New Zealand brands, such as Fonterra, Silver Fern Farms, and Air NZ. Now, he lives on a small rural property in Hawkes Bay, surrounded by local farmers. Baker explained that he was introduced to farming through his love of food. Before moving to Hawkes Bay, Baker said he was like many urban Kiwis under the impression that most farmers are environmental criminals. “When you move to a rural area, you learn nothing could be further from the truth,” Baker said. “The majority of farmers and growers are passionate about their land, produce and animals, and care deeply about sustainability and responding to issues.” He saw a reality perception gap between urban and rural and thought, ‘we need to bridge that gap,’ otherwise it will escalate into an adversarial debate with no solution. Baker noted that it’s difficult for individual producers to establish and build a strong consumer brand. “I just started talking to people and immediately gained traction with those I

spoke to. I saw the power of a community brand where we could pool our resources and make a strong community of likeminded farmers and food producers.” After only three months of operation, Baker has eight suppliers licenced under the Good Farmers NZ brand and four under evaluation. The criteria for becoming a Good Farmers partner involves a series of commitments. From sustainability, ethical business practises and paying a living wage to using environmentally friendly packaging. “I spend time with each partner to make sure our values align and ensure their commitment to our continuous movement,” said Baker. “Most producers contacting me are already on the journey. They just need better recognition.” A big part of what Good Farmers NZ is doing is what Baker calls a ‘vertically integrated way of thinking.’ This means ethical and sustainable practices through all processes from the gate to the plate. Each producer has different practices. For example, farmers may farm organically and regeneratively or less intensely, whereas

muesli and honey producers may remove as much harmful waste from their business processes as possible. “We’re good farmers, not perfect farmers,” Baker said. “Being a good farmer is what we’re committing to going forward.” Part of this sustainability includes environmen-tally friendly packaging. While Good Farmers does all the branding and marketing and requires packaging to be home compostable or 100% recyclable, it is the producer’s responsibility. “We work with each producer and offer preferred packaging suppliers, but it is up to them. We are not a blanket brand either,” added Baker. “Each producer adds their personality to the packaging. Each category has its own personality that adds to the artisanal quality feel.” For independent farmers, Good Farmers NZ is a commitment and value-based brand – not an authentication mark. “It shows

they are acting on issues that consumers are becoming increasingly concerned about, like animal welfare, paying a iving wage, and being transparent about their products,” Baker affirmed. “We want to build a power brand, a household name. You gain more strength as a collective/group than if you operate under a single brand. You get more recognition and visibility. The bigger the community, the stronger the brand.” As consumers begin to understand what the Good Farmers NZ brand stands for, Baker hopes it will create more demand and a higher valued product. “Good Farmers NZ has to take a stand. We have to lead by example,” Baker emphasised. “We need to offer a better option. We need consumers to demand it.” Good Farmers NZ supports every category in the industry – there is no limit to what it could represent. Baker invites anyone in the industry to join the movement and become a Good Farmers NZ partner. n

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