7 minute read
10 Columns
Katherine Rich, Chief Executive, NZ Food and Grocery Council
What a year!
COVID is the gift no one wanted and it certainly won’t stop giving. In the Fast Moving Consumer Goods sector in New Zealand so much of what used to be predictable and free-flowing is now difficult and uncertain thanks to the coronavirus in all its forms.
Even with the best forecasting prowess few predicted the meltdown of global shipping, 400% container cost increases or that pallet scarcity could all become constraining factors.
More than ever food and grocery manufacturers have had to be nimble and responsive to changing market conditions (as well as dealing with all the ever-changing COVID requirements).
But one thing remains certain and that’s the contribution and value of the NZ Grocery Industry Buyer’s Guide. This guide is such a valuable resource to all those who work in our industry and as CEO of the New Zealand Food & Grocery Council I am so grateful to Tania Walters and her team for the huge amount of work they invest into the collation and presentation of this Who’s Who in our industry.
I refer to my copy of the Buyer’s Guide often because I regularly get enquiries from FGC members wanting to reach out to others to collaborate or to secure a service for new product ideas. The questions are wide and varied like, know anyone who can contract pack fruit syrups? Any ideas who does beverage canning? Where can I source dried fruits? Can you tell us who makes cans? Or does New Zealand still produce soap?...These are just examples of questions I get and (for those where I don’t know) time and time again the Buyer’s Guide delivers answers and helps me broker potential connections.
Over the years I have also shared it with offshore food industry colleagues and been delighted to hear that this serendipitous sharing has resulted in new sales for the firms in the book.
The Buyer’s Guide in effect has become an informal ambassador for our local New Zealand businesses providing in one place valuable contact details, and a positive overview of new and established FMCG suppliers.
So congratulations again to all involved. Can’t wait to read the new list.
KIWI WINE HAS WINGS: NZ Wine in High Demand at Home and Overseas
International demand for New Zealand wine shows no sign of slowing, with export value reaching $599 million in the first quarter of the new export year, up 9 percent on the previous year. The demand for New Zealand wine is also reflected in an increase in price per litre, with the September quarter 2021 average value up 4 percent from September 2020.
“The ongoing demand for New Zealand wine has proven that the distinctive flavours, quality and sustainability of our wines increasingly resonate with consumers around the world. It is encouraging to see that during these uncertain times, consumers continue to choose a premium product they know that they can trust,” noted Philip Gregan, CEO of New Zealand Winegrowers.
Although the quality of the 2021 vintage was exceptional throughout New Zealand’s wine regions, the overall harvest was much smaller than hoped for, with 370,000 tonnes of grapes harvested during the 2021 vintage - down 19 percent on last year’s crop. This reduced supply is reflected in the decrease in volume of exports, with YTD September 2021 exports down 3 percent on the previous year.
In addition, increasing production costs, the on-going effects of COVID-19 on the border and markets, and strained supply chains, have continued to impact growers and wineries.
The projected labour shortage and unavailability of skilled workers due to the ongoing closure of New Zealand’s borders remains a key concern, as these workers play a vital role in enabling the industry to meet the critical seasonal work peaks.
“With ongoing uncertainty at New Zealand’s borders, our industry is working hard to attract new people to our sector, to ensure we have the personnel in place to bring in the 2022 crop, to make our premium wine, and complete winter pruning. The recent
decision to allow quarantine free travel for RSE workers is positive, and we continue to work with government to ensure that they are aware of the impact labour shortages will have on our members if they are not able to attract the workforce they need.”
Wine businesses that sell predominantly through the on-premise and tourism sectors continue to experience significant challenges.
“Domestically, restrictions on operations of hospitality businesses are a major stress point for wineries dependent on that sector. Cellar doors have been hit hard by the collapse in international tourist numbers, as well as the impact of current restrictions on regional travel. Positively, we have seen more New Zealanders visiting cellar doors, but there are long, lean periods outside of the traditional Kiwi holiday period.”
COVID-19 has also greatly impacted the supply chain over the past year, with the ability to ship products to market becoming an everincreasing concern.
“Like every industry dependent on seafreight, the ability for New Zealand wineries to ship products to market has been greatly impacted, as transport costs more than double and shipping reliability plunges. Unfortunately, this is a worldwide problem without any quick fix.” By NZ Winegrowers
THE GREAT GROCERY EDIT OF 2022
Weighing unpredictable inflammatory prices, a prioritisation of wellbeing along with an enduring pandemic, consumers are selfediting their grocery baskets by asking themselves one fundamental question: ‘Do I need this?’
According to a recent report from Nielsen IQ, when making purchasing decisions ‘Do I need this?’ is no longer just a question to gut check an impulsive purchase. Instead, it is now a critically important decision filter for all things tied to the broadening state of consumer wellbeing.
“Just as people are quitting their jobs in the ‘Great Resignation’ to find something better, the ‘Great Grocery Edit’ in 2022 will see consumers intentionally edit their trolleys, re-write their grocery lists and quit brands altogether for options that better meet the necessities of health, wellbeing, value (both price and purpose) and availability,” noted Genevieve Aronson, global head of thought leadership, Nielsen IQ.
Now more than ever, health and wellness are huge factors that consumers take into consideration when grocery shopping. Among the most important needs, consumers are looking for products that promote self-care and improve physical or emotional wellbeing.
Far from a new trend in the health and wellness space, the movement towards mindful consumption has become more urgent for many consumers.
“Across the global consumer packaged goods (CPG) industry, a more holistic notion of health and wellness is flourishing. To think about consumer health and wellness just through the limited lens of diet culture, fandom fitness, and niche health crazes is already archaic. It is no longer just a section of a store or a segment of a person’s lifestyle,” continued Aronson.
Consumers are also paying attention to what companies are doing.
Across all retail sectors, consumers expect businesses and governments to play a more active role in their health and wellbeing journey. In fact, a majority (72%) of surveyed global consumers feel that companies have a big role to play in the availability and access of healthy food for all. In
Philip Gregan, CEO NZ Winegrowers
fact, most global consumers (63%) would be more likely to buy from companies with a strong health mandate across their whole product portfolio.
“Consumers will not hesitate to dump brands that aren’t delivering on the needs that are now deemed a personal priority.
To consumers, health is everything and everywhere, and the companies who fail to address this are already at risk of falling behind the curve. Health and wellness shouldn’t be a subset or a secondary focus to any business initiative. Its relevance is now broad enough to bring opportunity to nearly every CPG category around the world.
With a forward look into the future, companies need to be flexible, yet focused on the changing needs of consumers as they move up and down the hierarchy of health and wellness needs.
