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L E A D I N G
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MAY 2020 – Volume 7 – No 4
WeLL done eVErybody.
PLUS! LEADERSHIP IN LOCKDOWN n FIGHTING COVID n INNOVATION n SUSTAINABILITY NEW ZEALAND’S LARGEST FMCG AUDIENCE
NOW
AVAILABLE
MADE OF NEW ZEALAND BY NEW ZEALANDERS NEW Anti-Bacterial Hand Sanitizer in a convenient 140ml size. Kills 99.99% of germs in a quick dry gel formula that gently moisturises with added
ALOE VERA.
contents MAY 2020
UP FRONT 6
EDITOR’S NOTE
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INDUSTRY NEWS
SPECIAL FEATURES 14 LEADERSHIP IN LOCKDOWN Foodstuffs, Countdown and FGC Chief Executives share their insights
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22 TAKE-AWAYS AT HOME Category insights 24 SUPER SPREADS What’s trending in nut butters, honey and jam
REGULARS 10 HEALTH & WELLNESS 12 TRENDS The impact of COVID-19 – state of play according to IRI 18 EXPORT F&B exporters well positioned to get through COVID-19 19 JAMES & WELLS A step closer to cohesive legislation on “organic” products
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FMCG BUSINESS - MAY 2020
20 FGC Helpful resources for your business 21 LEGAL ADVICE COVID-19 and post-2012 ADLS leases
27 FIELD TO FORK Setting production records to meet demand 28 BEST IN SEASON Fresh produce update 29 FRESH PRODUCE ‘Sweet as’ mandarin harvest underway
GOOD BUSINESS 32 INDUSTRY NEWS AND INSIGHTS 33 PROFILE Storetaste provides certainty 34 SUSTAINABILITY Insights from consumer research agency FMCG Gurus 35 WASTEMINZ All about recycling 36 PIONEERING SUSTAINABLE SKINCARE & HAIRCARE 37 O-I GLASS AND CASSELS: RESILIENCE IN THE FACE OF ADVERSITY 38 INNOVATION New store technology and product developments 41 PROFILE LiveBrew innovation 42 MARKETING 5 focus areas for wine marketers during and after COVID-19
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Shipping Essentials N AT I O N W I D E Hospital Grade sanitiser kills 99.9% of common germs Range includes Surface, Air and Hand Sanitisers Retail Pack and also range to protect your team Sizes range from 50ml to 5L
To enquire about the range or for more information contact Nitin Patel – nitin@anzpharma.co.nz
www.anzpharma.co.nz
[ editorial ]
THE PATH TO RECOVERY On 27th April, after five weeks in Level 4 lockdown, New Zealand finally turned a corner in the fight against the COVID-19 pandemic. Restrictions were eased to Level 3, which meant a lot more people could finally return to their workplaces. Lockdown may be temporary, but it’s not business as usual any time soon, and life post COVID-19 will never be quite the same. So how do you plan for the future, when the future seems uncertain? This special edition of FMCG Business is designed to bring you the latest updates on the Covid situation and how it is affecting local producers, retailers, shoppers and our economy. Some of our usual features have been replaced with essential advice to help you and your business navigate through this new landscape. We talk to industry leaders from Foodstuffs, Countdown and the FGC to find out how they lead and inspire their teams in an unprecedented crisis. Our legal experts explain what happens with leases, rent and outgoings during this emergency, and we bring you insights from local businesses that are embracing innovation and sustainability with courage and resilience. Confined to our home ‘bubble’, with non-essential business closed, major changes have emerged in consumption patterns. On pg 12-13, IRI reveals what New Zealanders are buying in lockdown to help them through the isolation, in the absence of restaurants, hairdressers and many other services. Despite the tough restrictions the lockdown caused for many small businesses and individuals, it put New Zealand on a path to a quick recovery and hopefully in a relatively strong place to rebuild our economy. Food safety and biosecurity is crucial for our country. Long-term disruption of our primary industries and the loss of exports due to a potential wide-spread COVID-19 outbreak could be devastating. ‘Self-Care’ is more important than ever, with prevention very much in mind. Look after yourself, your family and your team.
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Tamara Rubanowski trubanowski@intermedianz.co.nz www.fmcgbusiness.co.nz
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L E A D I N G
I N D U S T R Y
N E W S
MAY 2020 – Volume 7 – No 4
WeLL done eVErybody.
ON THE COVER From humble, homemade beginnings at the Nelson Market, Pic’s Peanut Butter has grown massively over the past 11 years. Find out what makes Pic's so successful, over on pg 24-25.
PLUS! LEADERSHIP IN LOCKDOWN n FIGHTING COVID n NNOVATION n SUSTAINABILITY NEW ZEALAND’S LARGEST FMCG AUDIENCE
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FMCG Business is audited and verified by ABC. DISCLAIMER This publication is published by C&I Media (NZ) Ltd (the “Publisher”). Materials in this publication have been created by a variety of different entities and, to the extent permitted by law, the Publisher accepts no liability for materials created by others. All materials should be considered protected by New Zealand and international intellectual property laws. Unless you are authorised by law or the copyright owner to do so, you may not copy any of the materials. The mention of a product or service, person or company in this publication does not indicate the Publisher’s endorsement. The views expressed in this publication do not necessarily represent the opinion of the Publisher, its agents, company officers or employees. Any use of the information contained in this publication is at the sole risk of the person using that information. The user should make independent enquiries as to the accuracy of the information before relying on that information. All express or implied terms, conditions, warranties, statements, assurances and representations in relation to the Publisher, its publications and its services are expressly excluded. To the extent permitted by law, the Publisher will not be liable for any damages including special, exemplary, punitive or consequential damages (including but not limited to economic loss or loss of profit or revenue or loss of opportunity) or indirect loss or damage of any kind arising in contract, tort or otherwise, even if advised of the possibility of such loss of profits or damages. While we use our best endeavours to ensure accuracy of the materials we create, to the extent permitted by law, the Publisher excludes all liability for loss resulting from any inaccuracies or false or misleading statements that may appear in this publication. Copyright © 2020 - C&I Media (NZ) Ltd
2020
Ben & George Bosto
Congratulations to the 2020 Awards Champions! After an exhaustive tasting and assessment of 225 food and drink products the 2020 Outstanding New Zealand Food Producer Awards the Champions have been named. Thanks to Aotearoa’s food and drink producers who work tirelessly to deliver amazing products and to the judges, stewards and Awards partners who make it possible to celebrate New Zealand’s Outstanding Food Producers. A full list of Award winners is at
ck, Bostock Brothers
Or ganic Chicken
Marvellous Marketing Supreme Champion Bostock Brothers, Organic Whole Chicken
Giesen Wines Paddock Champion Bostock Brothers, Organic Whole Chicken
Seafood New Zealand Water Champion Ngati Porou, AHIA Freshly Smoked Kahawai – Manuka Honey
Emerson’s Dairy Champion Pure NZ Ice Cream, Boysenberry Ice Cream
Farro Earth Champion
outstandingfoodproducer.co.nz
Fix & Fogg Everything Butter
Label & Litho Drink Champion Forage & Ferment – Wild Kefir (Ginger Root) NZ Life & Leisure Spirit of New Zealand Clevedon Herbs & Produce
Outstanding Sustainability Champion Raglan Food Co
FMCG Business New Product Champion Blue Frog – Manuka Honey & Hemp Heart Probiotic Porridge
Marvellous Marketing Outstanding Free-From Champion Zaroa Pohutakawa Smoked & Sous Vide Cooked Angus Beef Brisket
Freshco.nz New Business Champion Foundry Chocolate
Coast People’s Choice Favourite NZ Producer & Kelli Walker, For age
Fer ment
Fernglen Farm (Sheep Milk)
Coast People’s Choice Favourite NZ Farmers’ Market Thanks to our partners: NZ
& Leisure INSPIR ING NEW ZEAL ANDERS
Otago Farmers’ Market
[ news ]
MOST TRUSTED NZ BRANDS REVEALED When it comes to New Zealand’s most trusted brand, Whittaker’s is again the best on the block. Whittaker’s has been voted by New Zealanders as the Most Trusted of all Brands in the annual 2020 Reader’s Digest survey. It’s the ninth consecutive year the iconic chocolate brand has won the overall title. Whittaker’s, which has been “crafting NZ’s finest chocolate since 1896,” has also been confectionery category winner every year since 2011, as well as winner of the NZ Iconic Brand accolade since 2013. That’s according to the results of the Reader’s Digest-commissioned survey conducted by Catalyst Research. Whittaker’s is far from the only NZ brand to win the right to a podium placing over many consecutive years. Others noted by New Zealanders for consistently being genuine, authentic and reliable include Panadol as 11-time winners, as well as Dettol, Healtheries and AA Insurance – which are all 10-time winners in their respective categories.
The 2020 category winners include: Banks – Kiwibank; BBQs – Weber; Biscuits – Griffins; Bread – Vogels; Breakfast food – Sanitarium; Cars – Toyota; Car care products – Turtle Wax; Cheese – Mainland; Cleaning products – Dettol; Coffee machines – Breville; Confectionery – Whittaker’s; Cooking appliances – Fisher & Paykel; Cooking Stocks – Campbell’s Real Stock; Crackers – Huntley & Palmers; Dog food – Tux (Purina); Electronics (TV & home
Pak’nSave was voted ‘Most Trusted’ supermarket brand.
entertainment) – Samsung; Fruit & herbal tea – Dilmah; Gardening products (seeds, fertilisers, soils etc) – Yates; Hair care – Head & Shoulders; Health insurance – Southern Cross Health Society; Ice cream – Tip Top; Laundry detergent - Persil; Milk – Anchor; Muesli & snacks – Nice & Natural; NZ Wines – Villa Maria; Pain relief – Panadol; Retailer (excluding supermarkets and home improvement stores) – The Warehouse; Sealants & fillers – Selleys; Skin care (anti-ageing) Nivea; Small kitchen appliances – Breville; Supermarket / home brand – Pams; Supermarkets – Pak’nSave; Tea – Dilmah; Vegetarian food – Lisa’s Hummus; Vitamin & Supplements – Healtheries; Soups – Watties; NZ iconic brands – Whittaker’s. For the full Trusted Brands survey results see https://www. trustedbrands.co.nz/results.asp
OUTSTANDING NZ FOOD PRODUCER AWARDS CHAMPIONS ANNOUNCED At a time when Kiwis were rediscovering home cookery, the Outstanding NZ Food Producer Awards were delighted to announce its 2020 Champions – the best of the country’s locally grown and made food and drink products. Organic farmers Bostock Brothers were named Supreme The FMCG Business New Product Champion is Blue Frog - Manuka Honey Champion for their Organic Whole & Hemp Heart Probiotic Porridge. Chicken. Bostock Brothers Organic Whole Chicken was also named Giesen Wines Paddock Champion and the company received Gold Medals for Bostock Brothers Chicken Thighs and Bostock Brothers Chicken Breasts. Gisborne’s Ngati Porou, AHIA Freshly Smoked Kahawai Manuka Honey was awarded Seafood NZ Water Champion.
Pure NZ Ice Cream, Boysenberry Ice Cream was named Emerson’s Dairy Champion. Pure NZ Ice Cream is gluten and peanut free and made from ingredients which are locally sourced where possible. Wellington’s Fix & Fogg Everything Butter was named Farro Earth Champion for their innovative blend of hemp, chia, sesame, sunflower, flaxseeds and pumpkin seeds with peanuts and almonds. Kelli Walker took out the Label & Litho Drink Champion for her Forage & Ferment Wild Kefir, Ginger Root, while Clevedon Herbs & Produce received the NZ Life & Leisure Spirit of New Zealand Award. Raglan Food Co was named Outstanding Sustainability Champion. The FMCG Business New Product Champion is Blue Frog - Manuka Honey & Hemp Heart Probiotic Porridge. Freshco.nz New Business Champion is Foundry Chocolate. Foundry Chocolate was also named Supreme Winner at the recent NZ Chocolate Awards. For a full list of winners visit https://outstandingfoodproducer. co.nz/2020.
FOR MORE INDUSTRY NEWS FOLLOW US ON
CHECK OUT WWW.FMCGBUSINESS.CO.NZ
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FMCG BUSINESS - MAY 2020
[ news ]
NEW WORLD TRIALS ESSENTIAL BOXES Foodstuffs North Island is piloting New World Essential Boxes to give New Zealanders an express shopping option to get their grocery essentials quicker and more conveniently during the Alert Level restrictions. The pilot launched on 20th April featuring a suite of three essential boxes and will be trialled in central and outer Chris Quin, CEO, Foodstuffs North Island central Auckland suburbs. New World’s Essential Boxes are powered by Gilmours, Foodstuffs North Island’s wholesale brand, which has the delivery fleet and access to wholesale quantities of product enabling the New World brand to increase online order capacity for its customers. “We’re doing our best to keep innovating during the lockdown with our primary goal of meeting the grocery needs of all our customers,” says Chris Quin, CEO, Foodstuffs North Island. “No matter the Alert level, New Zealanders are looking for options as to how they can get their grocery essentials so they can stay home and stay safe.” The Essential Boxes are ideal for individuals or families who are looking for an express shopping option, or for the elderly or vulnerable who are unable to leave their homes. The boxes can also be purchased on behalf of someone else, saving the recipient a trip to the store. In addition, for every box purchased, New World will make a donation to Eat My Lunch to help feed Kiwi kids in need. The first stage of the pilot included three
different boxes to choose from, with more to be introduced to meet customers’ various needs. The New World Small Household Essentials Box ($85.95) includes basic groceries to refill the pantry and fridge as well as hygiene products. The box is ideal for 1 person for 2 weeks, or 2 people for up to 1 week. The New World Family Food Essentials Box ($179.95) includes breakfast, lunch, and dinner groceries for a small family. The New World Fruit & Vege Essentials Box ($39.95) includes an assortment of basic fresh fruits and vegetables to keep you healthy. The box is ideal for 1-2 people. The contents of each Essential Box may vary and will include a blend of branded and private label (Pams, Value, Pams Finest) products. Contactless delivery fees are included in the price of each box and no subscription is required. The Essential Boxes delivery timeframe is Monday-Friday between 9am-6pm. Customers will receive an email or text message confirming when their order is on its way. Next day delivery is available when ordering before 6pm.
NEW CEO FOR FRUCOR SUNTORY Frucor Suntory has announced the appointment of Darren Fullerton as CEO (Australia and New Zealand). Darren has a wealth of knowledge about the beverage industry from his extensive career at PepsiCo, spanning 18 years across multiple functions. As CEO (Australia & New Zealand) for PepsiCo for a number of years, Darren brings a wealth of market and product knowledge to Frucor Suntory. Most recently, he led Winc, a $1bn+ market leader in office products and business solutions across Australasia. Darren says: “It’s truly an honour to be joining the Frucor Suntory team and to be able to play a part in the next incredible chapter of a business I have always had great respect for. “Strong brands, a vibrant culture, and a thirst for success are hallmarks of most successful businesses – and I look forward to building on these inherent strengths at Frucor Suntory." Darren started his new role on 14 April and will be based in Sydney, Australia.
Frucor Suntory CEO (Australia and New Zealand) Darren Fullerton
FMCG BUSINESS - MAY 2020
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[ health & wellness ]
ONLY GOOD 100% PALM FREE. MADE BY KIWIS, LOVED BY THE WORLD.
Only Good has built a strong foundation of personal care products made right here in New Zealand. “Our 100% Palm Free range was developed to be better for you and your skin and we never fault on that,” explains Shannon Mitchell, Marketing and Export Manager at API Consumer Brands.
“We stand strong on ensuring each product we choose to develop delivers not only what’s important to us as a brand but also what’s important to you, our consumers. We understand the importance of our wash products during this time and we are working hard to make sure New Zealanders continue, to have our handwashes and bodywashes to showcase in their bathrooms and kitchens. We want to make sure we are not comprising our consumer experience of our beautiful products as this is very important to us. To ensure we can keep our handwashes armed with our classic black pumps we are making a small interim physical change to our bodywashes. For the next few months our bodywash range will have a black flip top cap instead of our standard pump, due to a worldwide shortage of some packaging elements. “If you are a new Only Good lover or a lover who has been with us since 2015 when we first started this journey – don’t fear our bodywashes will be back with pumps in no time!”
NEW SANITISER FROM HEILALA Heilala Vanilla has started producing a new hand sanitiser. CEO Jennifer Boggiss explains: “Recently, when COVID-19 became a risk for Tonga, we moved quickly to find PPE and sanitiser to help keep our teams at Heilala Vanilla and their communities safe. "We found that there was a sanitiser shortage in supermarkets. Then we were faced with the level four lockdown, but still wanted to be in a position to assist and we discovered that there were similar common ingredients in vanilla extract and sanitiser— ethanol and glycerin. We moved quickly, taking advantage of our production capabilities to produce a commercial grade sanitiser. Initially our priority was getting product to Tonga. We reached out to the Ministry of Health in Tonga and arranged the first shipment to be sent. Along with ensuring our team and their communities had supply, product was also destined for the three hospitals in Tonga. We had overwhelming interest from our 10
FMCG BUSINESS - MAY 2020
vanilla community, so we increased our production capacity to make it available for New Zealanders too. "The result of our pivot is a sweet smelling, vanilla infused sanitiser at an alcohol percentage of 69%, which is in the approved range recommended by WHO, CDC (US) and MPI (NZ) to be effective and proven to kill 99.9% of germs. It can be sprayed on surfaces, directly onto hands or door handles, tap handles or other surfaces and common touch points around the home or business. The COVID-19 threat led firstly to an acute shortage of sanitisers, which was followed by sanitisers of inferior quality flooding the market. We knew we wanted our product to be of the highest quality and have used ‘Ethanol’, which is superior to isopropyl and is the same food grade we use in our vanilla extracts." A limited number have been made available for key Heilala retailers along with customers being able to purchase directly at www.heilalavanilla.co.nz.
[ health & wellness ]
TIPS & FACTS TO FIGHT COVID-19 QUICK FACTS
IF YOU ARE FEELING UNWELL AND SUSPECT YOU HAVE CONTRACTED COVID-19, PHONE HEALTHLINE’S DEDICATED COVID-19 NUMBER 0800 358 5453. Follow the government’s advice for social distancing, frequent hand washing and hygiene at your workplace to keep yourself, your colleagues and your family safe. For more information on the pandemic, check the following websites. • www.covid19.govt.nz •h ttps://www.health.govt.nz/our-work/diseases-and-conditions/covid-19-novel-coronavirus •h ttps://www.who.int/emergencies/diseases/novel-coronavirus-2019
• Coronaviruses (CoV) are a large family of viruses that cause illness ranging from the common cold to more severe diseases such as Severe Acute Respiratory Syndrome (SARSCoV). A novel coronavirus (nCoV) is a new strain that has not been previously identified in humans. • Coronaviruses are zoonotic, meaning they are transmitted between animals and people. • Common signs of infection include respiratory symptoms, fever, cough, shortness of breath and breathing difficulties. In more severe cases, infection can cause pneumonia, severe acute respiratory syndrome, kidney failure and even death. • Standard recommendations to prevent infection spread include regular hand washing, covering mouth and nose when coughing and sneezing, thoroughly cooking meat and eggs. Avoid close contact with anyone showing symptoms of respiratory illness such as coughing and sneezing.
PETE’S NATURAL ADDS HAND SANITISER TO ITS PRODUCTION LINE Motueka business Pete’s Natural has stepped up to the plate for its community by converting its manufacturing plant to produce hand sanitiser. “We started making the hand sanitiser because we saw the need in the community,” says Pete’s Natural co-owner Marleen Suy. The sanitiser is made with 70% alcohol, in line with World Health Organisation guidance and is sold at New World and Fresh Choice, pharmacies and Trade Me, and customers can add a hand sanitiser to their online Pete’s Natural drinks order. The 50ml bottles have an RRP of $9.00. Suy says: “We are also able to supply larger quantities, including 5 litre and 20 litre containers to medical practices and others.”
“The 50ml bottles are handy to keep in the car, in your purse, or in your pocket. This is where people need it most. At home people should wash their hands thoroughly with warm water and soap as the Ministry of Health advises.” “We have been providing our range as normal to supermarkets throughout lockdown level 4 and this won’t change at level 3,” says Suy. “Once the demand for hand sanitiser is back to normal levels it will only take a day or two for us to switch back to normal production. But in the meantime, we are very happy to help meet our community’s need for hand sanitiser at a time which is so stressful for so many.” For more information go to www.petesnatural.co.nz FMCG BUSINESS - MAY 2020
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THE EVER CHANGING BATTLEGROUND The impact of COVID-19 – state of play according to IRI.
Kiwis had to change their daily routines and habits overnight when New Zealand imposed lockdown on Thursday 26th of March. When the first COVID-19 case was announced in New Zealand, Prepackaged Grocery sales immediately rose +14.4% in value (week ending 01/03/2020) and stockpiling ensued. As tighter travel restrictions were implemented, sales rose +19.8% (week ending 15/03/2020). The announcement of going from Level 3 to Level 4 within two days saw value growth peak at +67.4% (week ending 22/03/2020): the largest sales week ever in Prepackaged Grocery. While growth has decelerated since the panicbuying peak, sales growth remained high in weeks ending 29/03/2020 and 05/04/2020, at +29.4% and +27.6% above last year – sales growth continues to track higher than other international markets. Despite also being classified as essential services, Petrol & Convenience and Dairy channels saw declines.
A new way of life Lockdown and its extreme restrictions may be temporary, but things will not normalise any time soon, and life post COVID-19 will never be quite the same. What will it look like? As we adapt, we see some key developments in FMCG which could affect habits longer term.
What has lockdown meant for Kiwis and will new lifestyle patterns emerge? Confined to our homes and ‘bubble’, with non-essential business closed, major changes have emerged in consumption patterns. Retailers and 12
FMCG BUSINESS - MAY 2020
brands will need to modify their offerings to stay relevant to shoppers’ current mindset and context. In the first phase of lockdown shoppers adopted an ‘Emergency and Survival mindset’, preparing for the worst by stockpiling Toilet Paper, Dry Goods, Canned Goods, Medicines and Disinfectant products. The second phase has seen a shift in mindset to maintenance and stabilisation, and a focus on bringing some joy at home.
Protection and prevention paramount Protection and hygiene both experienced rapid early growth. In the four weeks to 05/04/2020, Rubber Gloves (+214.4%), Disinfectant (+152.2%), Bleach (+115.0%), Household Cleaners (+97.0%) and Personal Wash (+95.6%) all experienced significant value growth over last year. Increasingly front-of-mind, we expect many of these to experience higher baseline sales as life evolves. ‘Self-Care’ has acquired a new importance, with prevention very much in mind. In the four weeks to 05/04/2020 and 22/03/2020, Vitamins & Mineral Supplements across Grocery (+84.3%) and Pharmacy (+47.1%) respectively experienced notable value growth over last year as consumers sought products to boost their immunity to fight COVID-19.
The lockdown salon Still wanting to look and feel great while in lockdown, people are turning to ‘iso-grooming’: attempting to do-it-ourselves while hair, beauty and nail salons are closed. Value growth accelerated this week versus last,
[ trends ]
across Hair Accessories (+52.6%), Hair Removal (+34.1%), Cosmetics (32.2%), Cosmetic Accessories (+31.9%) and Hair Colourants (+27.4%) in the week ending 05/04/2020.
Craving renewed experiences
week prior. The Alcohol department has also continued to grow the last two weeks even after the peak week, in part driven by Liquor stores and Foodservice being shut, but also from virtual socialising and a way to ‘get-through’.
Kiwis are being creative about bringing out-of-home experiences and enjoyment indoors, creating new ‘iso-hobbies’ including the reignited interest in baking and cooking (possibly driven by empty bread aisles). Family-friendly and community-building, while offering entertainment and experimentation for mental wellbeing, the trend has increased demand for baking ingredients. These include Flour and Mixes (+155.2%), Cake Needs (+120.3%), Frozen Pastry (+97.5%), Sugar and Sugar Substitutes (+55.6%), all sky-rocketing compared to last year. Similarly, entertaining and birthday categories have experienced accelerated growth this week versus last, with Toys (+81.3%), Cards & Wrap (+49.6%), Party Goods (+27.4%) and Stationery (+27.2%) in the week ending 05/04/2020.
Worried about our pockets
My house my castle
What does the post pandemic grocery landscape look like?
Improving the space we are confined to is one of the things we’ve found to occupy our time. Gardening (+64.5%), Hardware/House (+45.1%), Kitchenware (+42.1%) and cleaning products all grew significantly in week ending 05/04/2020 versus the week before.
Eating in becomes the new ‘eating out’ In the absence of much-loved restaurants and takeaways, Kiwis want to make their favourite out-of-home meals. In the week ending 05/04/2020 ethnic categories like Asian (+63.6%), Mexican (+53.9%) and Indian (+51.3%) are well above last year.
Seeking comfort and socialisation Searching for enjoyment, indulgence and comfort in lockdown, shoppers are treating themselves. Confectionery (+24.3%) and Ice Cream (+23.8%) accelerated their growth in week ending 05/04/2020 over the
Financial concerns will heighten in the months ahead. Private label will continue to thrive over branded. In the four weeks to 05/04/2020 Private Label grew +46.0% in value versus last year, compared with 36.2% for total Prepackaged Grocery. IRI also expects trading down within categories and increased demand for larger pack sizes, while premium offerings holding real perceived value will be less affected.
A new way of buying for many Lockdown living, social distancing and queue avoidance has driven a surge in online grocery shopping. Many first-time users will likely adopt online purchasing longer term.
Caution prevails given the challenging economic backdrop. New behaviours, habits and hobbies will continue to emerge and evolve after lockdown ends. Shoppers are more savvy, looking for value and low prices, and limiting non-essential spending. However, some will look to treat themselves and possibly celebrate the end of lockdown’s limitations and restrictions (think ‘revenge spending’, seen in China). Be ready and think about your brand’s role in consumer’s lives in the aftermath. Source: IRI Market Edge Grocery data to 05/04/2020
By Samantha Firsow Market Insights Consultant Solutions & Innovation at IRI & Pravina Patel Market Insights Lead Solutions & Innovation at IRI FMCG BUSINESS - MAY 2020
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LEADERSHIP IN LOCKDOWN
New Zealand is facing an unprecedented, extreme challenge in the midst of a COVID-19 pandemic. FMCG Business talked to the Chief Executives at Countdown, the FGC and Foodstuffs to find out how they continue to lead, plan and inspire in times of extraordinary business and environmental change. FOODSTUFFS How is your team holding out under the current COVID-19 related restrictions? I’m proud to say the team have been amazing and are holding up extremely well. It’s certainly been tough and there’s been such a lot to contend with. Becoming an essential service almost overnight, coping with an unprecedented increase in demand and implementing physical distancing and protective measures, are just a few of the challenges our teams have leaned into at an incredible pace over the last month. There are also parts of the business who haven’t been able to trade, or have been restricted in their ability to trade, which presents a very different, but equally difficult kind of challenge. What impresses me most is our teams have been adapting to extraordinary business and environmental change, while getting their heads around what this all means for themselves, their families and of course, life’s stresses and strains don’t just stop, this is all on top of what life continues to throw your way, every day. What is your advice to business owners in New Zealand who are currently affected by the lockdown? Whether you’re dealing with managing huge unexpected demand, or not being able to trade, my advice is the same: be ‘fleet of foot’ and aggressively deal with your new reality, whatever that may be. Don’t ignore the difficult stuff, it won’t go away and if left, could potentially make recovery a whole lot harder. Also, make sure you put a lot of focus on the wellbeing of your teams. We learned through our management of the Christchurch and Kaikoura earthquakes, it’s when adrenalin levels 14
FMCG BUSINESS - MAY 2020
Steve Anderson, CEO Foodstuffs South Island
[ Q&A ]
“REWORK YOUR CURRENT STRATEGIC PLAN BASED ON YOUR NEW REALITY.” STEVE ANDERSON, CEO FOODSTUFFS SOUTH ISLAND start to drop, fatigue and stress kicks in. It’s something to be watching out for. Make sure you implement proper stand down time for yourself and your senior team, it creates opportunity for others to step up and gives you a chance to get a proper opportunity to recharge, even if it’s just one day a week, it will make a big difference to your longterm performance. What are the long-term, medium-term, and immediate steps that a business needs to implement today? Immediate steps, manage the crisis, totally focus on the job in hand and stop doing what’s not necessary, it’s highly likely it won’t be relevant in the coming weeks and months anyway. Medium term, review and, if necessary, rework your current strategic plan based on your new reality; and get your business involved in the development of the new plan, so teams can get behind it and support with its implementation. Long term, keep a constant focus on your culture. Adversity tests culture and a good culture builds resilience and trust, they’re the solid foundations you need to build, or rebuild a successful business in the long-term. How can we plan for the future when everything seems so uncertain? None of us ever know what the future will bring, so we’re always planning within a level of ambiguity and it absolutely can be done. In my first job with Shell I was taught the art and science of scenario planning. I still do it to this day and have kicked off this process for Foodstuffs South Island for post COVID-19 lockdown and beyond. To effectively scenario plan you have to be open to the good news and
the bad news, draw on previous experience and use your imagination for what might be. Of course, the planning is just the beginning, you need to be constantly measuring and testing against your plan as time moves on and be prepared to switch scenarios as the reality of the real situation plays out. How do you inspire and give clarity to your team right now? Listening, then walking the talk is my big thing. That means being available for feedback, however people choose to give it, getting out of the office and into the DC, into the stores, really listening to what team members tell me and having that valuable feedback inform my thinking, planning and actions. Communicating regularly through crisis is important too, throughout the COVID-19 response we’ve been communicating business-wide at the same time every weekday and everyone gets the same message. Finally, and most importantly, Foodstuffs South Island’s mission is ‘Feed the South’, it’s all the clarity we need, we continue to live this and it’s a constant anchor. COVID-19, or no COVID-19, we stick to our mission, we’re all clear it’s why we’re here!
NZ FOOD & GROCERY COUNCIL How are FGC members holding out under the current restrictions? It’s been a challenge for members due to unprecedented consumer demand in the grocery sector coupled with the virtual collapse of food service, restaurants and cafes. Members moved quickly to increase production and orders where they could, but there are some areas where the supply chain just couldn’t flex fast enough. At the same time, they’ve had to make sure their staff are kept safe in line with the restrictions. In many cases that’s meant working in different ways to maintain the required social distancing and keep staff confident they are safe. Fear, particularly in the early stages, was understandably real. Having said all that, they’re in excellent heart in general, knowing they’re part of an essential service and vital for the wellbeing of Kiwis. They met the challenge and will continue to meet it. What is your advice to business owners in New Zealand who are currently affected by the lockdown? Stay positive, focus on the tasks at hand, and know we will come out of this. This will take time, but it will happen. I know it’s easy to say that, but it’s a matter of hunkering down as best they can and staying the course. It’s important to remember the position we’re all in is not FMCG BUSINESS - MAY 2020
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[ Q&A ] faster and with less damage than many of the bigger world economies, then we will be ideally placed to maintain our position as a go-to supplier of safe, high-quality food to the world. How can we plan for the future when everything seems so uncertain? Planning remains vital and it doesn’t matter if we don’t have full information. We hardly ever do. As Warren Buffett said, “an idiot with a plan can beat a genius without a plan”. It seems to me a plan is in essence the idea of the direction of forward travel. The same principles apply to businesses post-COVID as they did before: right products, right-sized team, efficiency to market, collaborative retailers, hard work, and perseverance. How do you inspire and give clarity to your FGC members right now? By being a strong voice and advocate for members, by getting clarity and by sharing available information. Demonstrating every day that we have their back – someone to turn to for support and advice – in these times is vital, and FGC members know they will always have that. FGC has three parts to its strategy: connect, protect and celebrate members. It’s the whole point of having an industry association, and when there is a crisis, organisations like FGC are at their most useful.
COUNTDOWN Katherine Rich, Chief Executive, NZ Food & Grocery Council
“WHEN THERE IS A CRISIS, ORGANISATIONS LIKE FGC ARE AT THEIR MOST USEFUL.”
How is your team holding out under the current restrictions? The last four months have been one of the most challenging times our country, and our business, has ever faced. I am incredibly proud of everyone in our team for how we’ve kept each other, our communities and our customers safe. The COVID-19 pandemic and lockdown has been extremely tough for all New Zealanders, but whether it’s in our store teams, our online teams, our distribution centres, broader supply chain, suppliers, growers and support office, everyone has pulled
due to a fault in the New Zealand or world economy, as it was in the Global Financial Crisis in 2007-08, so it will begin to come right, and hopefully quickly, once we get on top of the threat. For many businesses, particularly smaller ones, the initial stages of the recovery will be about survival and concentrating on smarter, more efficient ways to do business. What are the long-term, medium-term, and immediate steps that a business needs to implement today? Companies should already be planning for when we come out of Level 3. For some sectors it will be a slower recovery than others, but planning now will mean they’re ready to move once restrictions are lifted. Food and produce exporters should be looking at maintaining export markets where we are seeing disturbing developments in protectionism. Diversification in products and markets is more important than ever. Companies that relied on restaurants, cafes and the 300,000 tourists each month will need to move quickly to compensate for these lost sales elsewhere. As our market contracts there will be job losses, which is bad news. The good news is that the world will continue to demand the sorts of foods New Zealand is expert at producing, so the food and grocery industry will remain essential. Food companies, in particular, know how highly our products are valued overseas and that’s a strength we must play to and leverage even further than we have until now. If New Zealand can come out of this 16
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Natalie Davis, Managing Director for Woolworths New Zealand and Countdown
[ Q&A ]
together to deliver food and other essentials to communities right across New Zealand, and we are so very grateful for this. It’s in times of great adversity and change that great things can happen and I am immensely proud of the way the whole business has risen to this challenge. We really couldn’t have done this without everyone’s efforts and willingness to adapt quickly. What are the long-term, medium-term, and immediate steps that a business needs to implement today? Even as a business which has been privileged to trade through the lockdown, the evolving situation has really pushed us to be more flexible, agile and to make decisions really, really fast. I know these will be learnings we’ll take on beyond the lockdown. In just over four weeks, we’ve safely served millions of customers in our supermarkets with physical distancing and incredibly stringent hygiene measures in place; we've massively increased our online delivery capacity, developed a priority online shopping service which has had more than 100,000 registrations, opened the country's first eStore, converted four stores to serve online customers only, and closed two stores to redeploy teams to online shopping. We’ve been able to employ around 2000 new team members in a very short space of time when meeting face-to-face is no longer an option. We’ve had our support teams working from home, and we’ve also been able to help our charity partners The Salvation Army and KidsCan to feed thousands and thousands of Kiwis in need as well. If you’d asked me even two months ago whether this was possible, I honestly don’t think my answer would have been yes! There’s no doubt that the next six to 12 months are going to be very challenging for the business community here in New Zealand, and for our broader communities and New Zealanders. Testing new opportunities, being flexible, trusting your people, empowering them and being kind to each other are all going to be critical to navigating our way through. How can we plan for the future when everything seems so uncertain? To be honest, these are tough times to plan for. But one thing that is critical in times of uncertainty is to keep connected with each other. In our business a large proportion of our team are in the supermarket serving our customers, so they’re not email-bound or engaging with us in a traditional way. With physical distancing and our business separated
“IT’S IN TIMES OF GREAT ADVERSITY AND CHANGE THAT GREAT THINGS CAN HAPPEN.” NATALIE DAVIS, MANAGING DIRECTOR FOR WOOLWORTHS NEW ZEALAND AND COUNTDOWN across the country, we’ve had to find new ways to connect our teams, and to keep people feeling connected to us. Workplace by Facebook has been really important for this, but so too have some really old-school channels, like group ‘huddles’ before opening, phone trees and regular check-ins with people both inside and outside your immediate teams. While it might be hard to plan for your business right now, the one certainty is that keeping connected as a team and business is vital to the health of all businesses going forward. How do you inspire and give clarity to your team right now? We are regularly checking in with our teams and are very fortunate to have a comprehensive counselling and support programme free for our team members and their immediate families - we’re openly talking about issues like mental health, family violence and financial support during tough times. We’re encouraging people to use the services we have available to help them feel safe and supported, and importantly that it’s ok not to feel ok. In our stores we’re starting to see customers get back to their calmer, more regular shopping patterns, which is fantastic so our focus from a supply chain perspective right now is to rebuild stock and continue to adapt to what New Zealanders most want and need. As a business we’ll of course take a quiet moment to reflect on what we have experienced, but more than ever before, this is the time to challenge the norms and learn from this extraordinary event. FMCG BUSINESS - MAY 2020
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F&B EXPORTERS WELL POSITIONED TO GET THROUGH COVID-19
Catherine Beard is Executive Director of ExportNZ, which serves its members via regional offices throughout the country. To find your nearest office go to www.exportnz.org.nz
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There have been rumours circulating that the COVID-19 pandemic will spell the end for New Zealand’s export markets, but there are some positive signs emerging. New Zealand has acted early and decisively and while it has been painful for many businesses, it is our hope that it will help us get back to business faster as a result. On the positive side of the ledger for New Zealand, food is essential, and all governments around the world - including New Zealand - are prioritising food production, importing and exporting. While there will be a dampener on the global economy, we are seen as a high-quality food producing nation and food tends to be quite a resilient export in times of economic downturn. People tend to cut back on luxuries, but food is the last thing to compromise on. In addition, we are seeing already that people are putting a premium on fresh and healthy food, so watch categories that have good health benefits go up in demand. In terms of our ‘goods’ exports, primary sector exports make up about 70-80%, so this is very important to our economy and it is great that these exports have continued to flow. As we move to Alert Level 3, if manufacturers can show they are working safely, keeping social distancing and contact tracing, they will be able to resume business. Many of our food manufacturers
were already deemed essential, but the inability of other manufacturers to operate has affected supply chains and balance sheets in many businesses. The good thing about manufacturing generally and food manufacturing in particular is that they are already highly controlled work environments, so the ability of these businesses to operate in a Covid safe way is enhanced. Trade and Export Growth Minister David Parker has said New Zealand's exports may not decline at the same levels forecast for world goods and we suspect he is right. In fact, New Zealand's overall goods exports, concentrated in the primary sector, were 2% higher in March 2020 than in March 2019.
Reason for optimism Because the food and beverage industry accounts for such a significant percentage of New Zealand’s goods and services exports, it has led to the establishment of an incredibly helpful export environment. MPI, MFAT, NZTE and Customs are all supporting exporters through supply chain issues and ensuring disruptions to trade are minimised. New Zealand plays an important role in the global food supply chain, which would be disrupted if we started putting restrictions on food exports. Food exports are going to help New Zealand weather this economic storm. The Government recognises this fact. Most sea freight routes remain open and China is turning the corner as its economic activity begins to pick up. Medical supplies and food continue to flow, even into countries most affected by the pandemic. The fact that we are an island nation with well managed borders puts us in good stead. This is something that has held us back in the past but has now turned in our favour. If we do manage to have a world leading result in getting on top of the virus, it will add value to our New Zealand brand, which will help our exporters. Many of our biggest trading partners are heavily reliant on imported food, a large share of which comes from New Zealand. Also, while air cargo freight prices have gone through the roof and making it hard for some of our exporters, about 98% of our goods exports go by ship, and those supply chains are still working relatively well.
[ export ] Time to reflect There is no doubt this is time for reflection. Businesses will be reflecting on how resilient their business models are. How much can they work remotely, how much travel do they really need to do, how robust their supply chains are, how diversified their markets are, and how they get new business in a world where they can’t go to big trade shows for some time. Some sectors will be obviously hit harder than others by the COVID-19 pandemic and many lives will be disrupted in many different ways, but now is the time for businesses to get creative and innovative and figure out how to pivot if they need to. The New Zealand economy has been on a diversification journey for some time now and we now have a smart tech sector that has been growing at pace, with high tech manufacturers and ICT businesses as a group being our third biggest export sector. We have stayed home and saved lives. Now hopefully business will benefit from our collective actions and we can start saving jobs. When New Zealand gets through the COVID-19 virus - which it will - it will emerge a more resilient, sustainable and affluent export country.
“FOOD TENDS TO BE QUITE A RESILIENT EXPORT IN TIMES OF ECONOMIC DOWNTURN.” [ James & Wells ]
A STEP CLOSER TO COHESIVE LEGISLATION ON “ORGANIC” PRODUCTS The organic movement in New Zealand is going strong. To date, food and beverage businesses have been operating within a relatively loose legal framework when representing their products as “organic”. Participation in private certification schemes has been voluntary, rendering consumer laws such as the Fair Trading Act 1986 somewhat limited in their ability to police the truthfulness and accuracy of such organic claims. However, that may all be set to change with the introduction of the Organic Products Bill to Parliament in early March. The Bill introduces national standards for the production of organic products which businesses would need to follow in order to be able to market and label products as organic. This will go a long way towards creating consistency and clarity for consumers. Relevant Ministries will be responsible for setting up organic product standards and for the administration, monitoring and enforcement of these regulations. Under the proposed Bill, producers must apply for approval to describe products as organic products. The standards applicable to marketing a product as organic will carry a strict liability offence (i.e. it will be irrelevant whether the producer intended to or even knew it was in breach). Retailers of final pre-packaged products marketed as organic and businesses providing a service to consumers using a pre-packaged product marketed
as organic, will also need to ensure compliance with the relevant standards. Whilst such persons are not required to be approved under the proposed Bill, their retailing and use of non-compliant products (even if unintentional) could amount to misleading conduct or the making of a false representation in breach of the Fair Trading Act. These businesses will need to put in place adequate contractual obligations with the organic producer to protect themselves. This will also raise interesting issues for parties involved in the supply chain of products which bear a trade mark or a label that incorporates the word “organic”. A key purpose of the Bill is to facilitate international trade in organic products by controlling the import and export of products labelled as organic. Regulating the use of organic labels has been widely adopted overseas for some time now, with all but New Zealand and Australia adopting mandatory domestic standards. Failure to meet the relevant standards (or describing a product as organic without approval) in relation to export-only products will still be a strict liability offence. The introduction of the Bill has been well supported and, some would say, overdue. Public submissions on the Bill are open until 28 May 2020. If your business is likely to be affected, we recommend seeking advice early on in the process to reap the benefits of such legislation.
Stephanie Hadley Associate, James & Wells James & Wells are one of New Zealand’s largest, privately owned, patent and trade mark attorney firms. Their award-winning team is widely recognised as one of the very best in Australasia.
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[ FGC ]
COVID-19: HELPFUL RESOURCES FOR YOUR BUSINESS
Katherine Rich Chief Executive NZ Food & Grocery Council www.fgc.org.nz
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The six weeks of the COVID-19 Alert Levels 4 and 3 have been a very challenging time for the food and grocery sector, and further challenges lie ahead. During this time, the NZ Food & Grocery Council has supported not just its members with the most up-to-date information and advice but also offered it to other companies across the sector. Companies not receiving our regular updates are welcome to receive them and join us in helping ensure the food and grocery shelves remain stocked. Email us to register. In the meantime, here are some of the most helpful resources we have been sharing with our members: Exporters (NZ Trade & Enterprise): Information and advice for exporters, including on freight and logistics, managing risk, cash flow, insurance and supply chain management. Also contains a marketplace to help companies find offers and requests for resource, updates from key markets, webinars. Click here. Border clearance (NZ Customs): Updates on issues that ensure the border is clear for the passage of imports and exports, including movement of goods, customs duties, payments, lodging of import declarations, tariff concessions, permits and carnets. Click here. Impacts on trade (MPI): Information on the general impacts on trade, including what foreign ports have been impacted by reduced storage and inspection facilities, and disrupted courier services where consignments are diverted to other ports.
Also access to an advisory panel for businesses requiring specialist advice or facing severe disruption. Click here. Food Safety (MPI): Guidance for food handlers and food businesses in Alert Level 3, including re-opening or making changes to a food business. Click here. Food Safety (Food Standards Australia New Zealand): Advice on virus transmission by food or packaging, washing fresh fruit and vegetables, meat safety, take-away, donated and food delivery. Click here. Food Safety (NZ Food Safety Science & Research Centre): potential for foodborne transmission of the virus, usefulness of PPE in food production and processing, effectiveness of ozone gas in inactivating the virus, Q&A on potential for testing by the industry, and risk management, and a confidential interactive Q&A facility. Click here. ShopCare Safety App (NZFGC): a quick and touchless way for employees to declare their current health status before arriving at an essential work site. Download here. Essential services, sectors (MBIE): A collection of government information, including essential services and sectors, transport, workplace preparedness, wage subsidy scheme, small business tax obligations, landlords and tenants, health & safety, building & construction. Click here. Personal Protective Equipment (ManufacturingNZ): A list of manufacturers producing PPE for COVID-19. Click here. Dealing with COVID-19 (Ministry of Health): Guidance for workplaces that have a case of the virus, including first steps, contact tracing, and communication with employees and customers. Click here. Workplace safety (WorkSafe): Obligations and the law for businesses. Click here. Research and Development (Callaghan Innovation): Regular updates on key services for business, including flexibility around the R&D grants process and payments. Click here. Worldwide updates and map: Dashboard by the Centre for Systems Science and Engineering at Johns Hopkins University, Maryland, US. Includes an interactive map. Click here. Worldwide rolling updates (World Health Organisation): Click here. Outbreak and response (Centres for Disease Control Prevention): Updates from the US on the outbreak and response. Click here.
[ legal advice ]
COVID-19: ADVICE FOR LANDLORDS & TENANTS As a result of the current COVID-19 lockdown, many businesses will, unless they were classed an essential service, be unable to work from their leased premises. This has led to a number of questions for both landlords and tenants as to what happens with rent and outgoings during this emergency. This article will address this based on the post-2012 versions of the Auckland District Law Society Lease (“ADLS Lease”). This is the most prevalent form of Lease throughout New Zealand. However, it is important to review the version of lease you have, as not all leases are the same and even the ADLS Lease may be amended. They key clause that many tenants and landlords will need to familiarise themselves with is clause 27.5 of the ADLS Lease, which reads as follows: “If there is an emergency and the Tenant is unable to gain access to the premises to fully conduct the Tenant’s business from the premises because of reasons of safety of the public or property or the need to prevent reduce or overcome any hazard, harm or loss that may be associated with the emergency including: … (c) Restriction on occupation of the premises by any competent authority, then a fair proportion of the rent and outgoings shall cease to be payable for the period commencing on the date when the Tenant became unable to gain access to the premises to fully conduct the Tenant’s business from the premises until the inability ceased.”
Can the tenant reduce their rent and outgoings during the lockdown?
How to calculate a reduction of rent and outgoings during the lockdown period Clause 27.5 refers to a “fair proportion” of rent and outgoings abating. What is “fair and reasonable” is unknown and has not been tested in the courts. For this reason, generally parties are encouraged to reach a negotiated solution that both parties can live with. This will of course be influenced by other factors such as the relationship and the long-term solvency of the tenant. A fair proportion will depend on the facts and circumstances but key factors will be the extent to which the tenant can continue to operate include remotely, whether “fair” includes some sort of storage component of the tenant’s chattels and whether insurance should continue to be payable by the tenant. We encourage landlords and tenants to work together to find a solution that is workable for all parties to ensure that the relationship is preserved once the lockdown has been lifted.
Prashant Prasad is a Solicitor in the commercial team at Steindle Williams. swlegal.co.nz
“WE ENCOURAGE LANDLORDS AND TENANTS TO WORK TOGETHER TO FIND A SOLUTION.”
For current purposes it is clear that the current COVID-19 pandemic constitutes an emergency. Essential services (e.g. supermarkets) may still have full access to their premises and in such cases it is hard to see that they would have the benefit of this clause as no access has been denied. However, in other cases there may be partial or complete restriction on access (e.g. a delivery service of essential goods where the business can operate but the store remains closed, or a complete shutdown of the premises). In these cases, the clause would apply as tenants are unable to access the premises to fully conduct their business. FMCG BUSINESS - MAY 2020
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TAKEAWAYS AT
HOME
Convenience meals and delicious pies are popular with shoppers right now.
COVID-19 has been kind to Howler Hotdogs. While takeaway options were off the menu under the Level 4 lockdown there’s been a real trend to replacing these at home with “fakeaways”, “isoeats” and “takeawaysathome”. “While we’ve seen a suspension of sales from our traditional takeaway and event venue customers, our premium Howler Hotdog supermarket range has seen explosive growth. We’re running 48% higher than normal volumes with some stores doubling or tripling their usual orders as people adjust to having all their meals at home,” says Joanna Williamson, Managing Director at Golden Goose Foods Ltd. “To help build traffic to stores we’ve been running a digital campaign encouraging consumers to post images to our Facebook and Instagram pages of what they’ve been making for their families at home, with great engagement from consumers. Making takeaways at home is a fun way to keep some normality in people’s routines, particularly for kids. “We take a great deal of pride in the fact that we’re the only hotdog company in Australasia that’s able to provide for dietary needs with our gluten free and vegan hotdog options that have been very well received by the market,” says Williamson. “Howler Hotdogs are such a convenient option to have in the freezer at home for a quick and easy meal or snack option. They’re pre-cooked so just take 15 – 18 minutes to bake in the oven, fitting well with the under 30 minutes convenience options that consumers are looking for.”
“OUR PREMIUM HOWLER HOTDOG SUPERMARKET RANGE HAS SEEN EXPLOSIVE GROWTH.” JOANNA WILLIAMSON, MANAGING DIRECTOR AT GOLDEN GOOSE FOODS LTD. 22
FMCG BUSINESS - MAY 2020
[ category insights ] Source: NIELSEN SCANTRACK Total Supermarkets - MAT to 22/03/2020 Val Sales
Val % Chg YA
Total Chilled Convenience Foods
163,291,456
6.6%
Fresh Meat Pies
56,012,595
3.0%
Fresh Soup
26,322,063
0.8%
Fresh Pasta
20,987,771
12.5%
Fresh Pizza
16,905,167
15.7%
Fresh Pizza Bases
14,368,141
15.3%
Fresh Pasta Sauce Excl Pesto
8,085,439
8.0%
Fresh Pesto
8,002,767
14.4%
Convenience Food
5,994,099
6.3%
Quiche
4,571,652
-5.1%
Fresh Sausage Rolls & Savouries
1,804,715
0.9%
Total Frozen Convenience Foods
170,431,897
14.8%
Frozen Meat
30,954,202
22.2%
Frozen Pizza
26,448,647
9.8%
Frozen Snack Meals
26,190,892
10.2%
Frozen Party Snack
25,059,066
18.0%
Frozen Sausage Rolls & Savouries
22,033,621
13.1%
Frozen Full Meals
18,051,535
0.5%
Frozen Vegetarian
12,519,484
36.7%
Frozen Meat Pies
8,933,507
20.3%
Vegetarian Foods
234,585
NA
Frozen Pizza Bases
6,357
26.9%
Baker’s Sons “We are the Baker's sons - pies and sausage rolls are what we know. Our family has spent years perfecting our delicious recipes and now we are proud to share it with you,” says the team at Baker’s Sons. National Sales Manager Grant Nixon explains: “From being young kids, Tom and Ben have been around pies. Their Dad Eddie, a master pie maker, was always cooking up fresh batches, honing his skills to perfect the classic kiwi pie. Tom and Ben have practiced the art of pie making and are taking the award-winning family recipe to the next level. Full of high-quality ingredients then wrapped in golden pastry. All our pies are made using all-natural ingredients, no MSG or preservatives. Top to toe these pies are the pinnacle.” The Baker’s Son range includes 2-packs and family pies. The 2-pack is perfect for sharing with that someone special. Coming in two delicious flavours: Angus Mince and Cheese and Butter Chicken. These 2-packs are perfect for the fridge or freezer ready for when you need them. The family pies are also perfect for sharing. Coming in three crowd-pleasing flavours: Angus Steak, Angus Mince and Cheese and Free-Range Chicken Tikka Masala, the family range has something for everybody. Full to the brim with the best ingredients making these pies perfect for the whole family. “Whether you’re feeding one, two or the whole family, The Baker’s Sons will satisfy them all,” says Nixon. Phone: 09 421 9027 Email: info@thebakersson.co.nz
FMCG Business produces a monthly snapshot of category news and highlights, based on information from participating clients and Nielsen data available at time of print. To showcase your products in upcoming category reports, please contact trubanowski@intermedianz.co.nz.
FMCG BUSINESS - MAY 2020
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SUPER
SPREADS Nut butters and honey remain firm favourites in New Zealand pantries.
A good peanut butter sandwich is still one of the easiest and most satisfying snacks at any time of the day. Whether you like your spreads on toast, or scones, or spooned straight out of the jar, we’re blessed to have a wide variety of locally made products to choose from.
Pic’s Peanut Butter Pic’s Peanut Butter is the leader in the peanut butter category for the total New Zealand grocery market (IRI MAT 19.04.20). From humble, homemade beginnings at the Nelson Saturday Market, Pic’s has grown over the past 11 years to be New Zealand’s most loved peanut butter. In addition to salted and unsalted smooth and crunchy peanut butter, the company produces a boysenberry ‘jelly’ (it can’t be called jam because of its low sugar content), as well as peanut oil, almond and cashew butters and slugs (single serve sachets of smooth peanut butter). It also has a range of retail items for sale at its own tourist destination, Pic’s Peanut Butter World. Pic’s Peanut Butter World opened in Nelson Tasman in 2019 and has already provided factory tours, a café, and retail experience for tens of thousands of visitors from both around the world and from right here in New Zealand. 24
FMCG BUSINESS - MAY 2020
[ category insights ] “WE CHERISH THE LOVE THAT OUR CUSTOMERS HAVE FOR OUR PRODUCTS.” NIKKI NEATE, GLOBAL MARKETING MANAGER FOR PIC’S PEANUT BUTTER willingness to take risks and give things a go. As the business has grown it has matured into a place where the wider team brings their ideas and innovation to the table and are given opportunities to contribute to the development of our product and the direction of the company. This helps us to continuously evolve and improve the way we go about our business. Ultimately, we want to make good food that people enjoy.”
The healthy chocolate spread
“People love to connect our products with the place where they’re made. Being a business that started in Nelson Tasman, and will remain based here, is very important to us,” says Global Marketing Manager for Pic’s Peanut Butter, Nikki Neate. Neate says that building the business on a strong foundation of shared values is key to the company’s success. “The trust our customers place in us is never taken for granted,” she says. “There’s a love for Pic’s products. We cherish the love that our customers have for our products, and the team that stands behind those products strives to honour quality and our customers in everything we do. There’s an authenticity to Pic’s that we treasure– we are what we say we are on the label.” Owner Pic Picot is himself known as an innovator and supporter of other innovators, says Neate. “He has a willingness to try ideas, back his own thinking up with action, and to attract talented people around him. Pic has an amazing way of cutting out the baloney and making anything possible. “We wouldn’t be where we are without his
Honey Infusionz WIldflora and Cacao is a bronze medal winner of the SIAL Middle East 2019 Innovation award. Born out of the desire to offer a healthier alternative to the high sugar content chocolate and hazelnut spreads as well as offer an ethical product that contains no palm oil and none of the potential allergens of nuts or dairy, this award-winning honey and cacao spread is a nutritious and delicious chocolate spread for everyone. With the emergence of food allergens, particularly nuts – this the perfect healthy solution to spread on bread, waffles, pancakes and as an ice cream topper. With no added sugar, no dairy and no nuts, this makes the perfect replacement for any chocolate or hazelnut spread in your pantry. For more information contact Honey New Zealand: Aeneas@honeynz.co.nz.
Airborne – Honey Guardians Airborne is New Zealand’s oldest most trusted and technically competent honey company - established in 1910 and is owned by the founding family. Behind each jar is over 100 years of experience, plus 25 years of laboratory experience and a comparative database containing more than 41,000 records. Airborne Honey adheres to the International CODEX standard for honey. Evidence for this can be found on all Airborne Honey jars under Honest, Undamaged and Traceable. Specific numbers on Airborne Honey packaging relates to the honey’s actual pollen, conductivity level, HMF level, and batch number or QR code, giving consumers visibility of the batch composition as well as being able to trace the honey right back to FMCG BUSINESS - MAY 2020
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[ category insights ] its source. Airborne Honey has patented a unique, breakthrough technology that almost entirely minimizes heat damage to honey and delivers to the consumer the most natural and undamaged honey possible. Airborne branded honey is distributed in 20 countries around the world selling mostly in supermarkets. In 2014, Airborne Honey launched TraceMe, an online tool that allows customers across the world to look up specific details about the honey in the jar. These include pollen percentage, colour, conductivity, glucose, fructose levels as well as other natural sugars found in different levels depending on the honey variety and if the honey has been heat damaged. A map shows the location of the hives where it was harvested. The application is believed to be a world first. For more information on Airborne Honey, visit www.airborne.co.nz. To access TraceMe, visit http://abh.tips.
Why are more and more New Zealanders ‘waking up’ to Nut Brothers’ products? It’s because each jar is made using the best High Oleic Argentinean Peanuts you can source; fire roasted in
small batches and milled the very same day, right here in New Zealand. Nut Brothers believe, just like coffee, you can really taste the difference in the freshness when roasted and milled in the same day. “Nut Brothers carefully manage each step of the nut-buttery process to craft a rich, fresh and flavourful nut butter every time, unlike some other brands who use peanuts that have been previously roasted at an overseas origin, several months prior to milling,” explains Jono Wood from Natures Foods. Along with the freshest taste, Nut Brothers believe that their everyday price offers New Zealanders the best price branded premium Peanut Butter in the country. “That’s also putting more smiles on Kiwis’ faces. It’s a winner for mums and kids, gym-buffs, wellness warriors, athletes, vegans... you name them, they love it!” says Wood. “So, if you too are ‘waking up’ to the good news about Nut Brothers, you’re also going to love their range of natural flavours, like their fivestar health rated Salted Caramel Peanut Butter, their 65% Cacao Dark Chocolate Peanut Butter, or any one of their other fabulous Almond or Peanut Butters.” For more information contact Jono at Nut Brothers: E: info@nutbrothers.co.nz M: 022 072 3739
Award-winning innovation
Source: NIELSEN SCANTRACK Total Supermarkets - MAT to 22/03/2020 Val Sales
Val % Chg YA
Total Spreads
170,669,909
2.3%
Honey
52,417,365
-7.4%
Peanut Butter
47,317,739
11.3%
Jam
26,889,347
1.4%
Sweet Spreads
19,337,891
8.1%
Vegetable & Yeast Extracts
16,010,238
6.9%
Marmalade
6,384,318
-2.5%
Savoury Spreads
2,313,011
24.7%
The Outstanding NZ Food Producer Awards announced their 2020 Champions in April, after 25 expert judges assessed a record 225 food and drink entries at AUT School of Hospitality & Tourism, just prior to the lockdown. Following the judges’ assessment of aroma, appearance, taste, texture and quality which accounted for 75% of marks, products were also assessed for sustainability and brand story. Winning products will be recognised as they proudly wear Outstanding NZ Food Producer Awards Champion, Gold, Silver and Bronze Medals – a guarantee of product quality. Wellington’s Fix & Fogg Everything Butter was named Farro Earth Champion at the awards, for their innovative blend of hemp, chia, sesame, sunflower, flaxseeds and pumpkin seeds with peanuts and almonds. Judges thought this combo was a step up from other spreads and butters, praising its delicious, roasty aroma, balanced flavours and easy spread-ability.
FMCG Business produces a monthly snapshot of category news and highlights, based on information from participating clients and Nielsen data available at time of print. To showcase your products in upcoming category reports, please contact trubanowski@intermedianz.co.nz. 26
FMCG BUSINESS - MAY 2020
[ field to fork ]
SETTING PRODUCTION RECORDS TO MEET DEMAND
The country’s largest tomato harvesting and processing season has just been completed in Hawke’s Bay.
Teams of employees in Wattie’s factories in Hawke’s Bay, Christchurch and Auckland have been working as never before to help keep supermarkets stocked in their efforts to satisfy consumer demand during the COVID-19 crisis. The range of products include Wattie’s tomato sauce, Wattie’s baked beans and spaghetti, soups and canned and frozen meals, frozen peas and mixed vegetables, and dips. On top of these are the seasonal products like peaches, pears and beetroot. All this while, the country’s largest tomato harvesting and processing season was underway in Hawke’s Bay. Harvesting started in February and continued through to April. With social distancing requirements extending to the fields, the job of harvest operators can become very lonely with 12-hour shifts. In its 86th year of operation, the country’s largest canning plant in Hastings is working 24/7, establishing new record production volumes while adhering to strict protocols mandated by MPI and enacted by the business to keep staff safe. The record output in a single 24-hour period has been 1.6 million cans. End-on-end these cans would stretch for 170 Kms. Managing Director Neil Heffer says in all this activity the single highest priority is keeping people safe. “Our people have been magnificent in adapting to the new protocols which range from the changeover of shifts, social distancing in the operating areas (and screens on production lines where that is not possible), to seating arrangements in the cafeteria.” In the canning plant, employees involved in each of the three shifts wear differently coloured arm bands to ensure there is no cross over between them, and there is a 20-minute separation time between one shift and the next. “Our people there and in the other plants have been amazing, and we take our hats off to them. They have had to deal with altered family
situations, households in lockdown and new workplace protocols, and they come to work eager to do what they can. “There is a sense of caution, given the current COVID-19 situation however, people understand and respect the safety measures in place,” Heffer says. Wattie’s factory manager in Hastings April Bartle reports a new sense of camaraderie has developed among fellow employees during these unprecedented times. “These efforts are being acknowledged in the rest of the company where a campaign has been launched under the banner ‘We Applaud’ to recognise the role that the factories are playing.” An Employee Assistance Programme (EAP) is in place which provides employees access to free counselling; and arrangement are being made for staff to be provided with free issue food cans. Wattie’s first priority is the health and safety of its employees and has implemented strict protocols for all operations.
QUICK FACTS There are currently more than 1000 employees working across Wattie’s sites in Hawke’s Bay. The priority for Wattie’s production is core products like baked beans, spaghetti, and soups. The latest record set at the Hastings factory is 1.6 million cans during a single 24-hour period. End-on-end these cans would stretch roughly 170 Kms. Processing of seasonal crops – peaches, pears, tomatoes and beetroot – is occurring at the same time as priority products. The hot dry weather in January, February, and March, with moderate temperatures into April made for a quality tomato harvest.
FMCG BUSINESS - MAY 2020
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[ fresh produce ]
BEST IN SEASON As we enter the last month of autumn, winter vegetables like cauliflower, broccoli, silverbeet, leeks and celery are all coming into their prime. The May Ohakune crop of carrots, parsnip, swede, potatoes and brussels sprouts are in their peak now too so keep these well-stocked as demand will be high. Leafy green vegetables should be well featured to grab consumers attention, and this can help you take advantage of the seasonal change in consumers eating habits. Feijoas are available through until June and Kiwis can’t resist these gems. Warm summer temperatures have ensured an optimum crop this year. A limited supply of passionfruit is also still available until July. Be sure to keep a full range of new season apples and pears – and don’t forget nashi pears.
Nutrition: Persimmons provide a good source of vitamins A and C for healthy skin and are a source of manganese which helps protect cells against free radical damage. They are also a source of dietary fibre which supports digestive health.
Satsuma mandarins Sweet, juicy, seedless and easy-peel Satsuma mandarins are in their peak season, which will run through until mid-August. They are hugely popular and as they have a broad maturity time, fruit supplied throughout the season is always top quality. What to look for: Select unblemished mandarins that are heavy for their size. Avoid any with soft spots, mould, bruising or cuts. Storage/handling: Store at room temperature, out of direct sunlight for up to a week, but they should be refrigerated after that to extend shelf life of up to two weeks. Ensure to keep stock rotated. Nutrition: Satsuma mandarins are a good source of vitamin C and folate, which helps support immunity. They are a source of thiamin to provide energy and contain potassium which supports muscle movement.
Persimmons Sub-tropical persimmons are only around for a short time and as there is less fruit available at this time of year, they’re good to have on hand. The main variety grown in New Zealand is the Fuyu persimmon and these are non-astringent, meaning they can be eaten when crisp. They will still be sweet at this point. Persimmons are in season until July. What to look for: Persimmons will continue to ripen on the shelf so select fruit that is firm to touch. Deep orange coloured Fuyu persimmons are ripe and light orange means they are less ripe however a lot of people prefer them like this as the flesh is crisper. Storage/handling: Persimmons are different to a lot of other fruit in that they keep longer if stored at room temperature – between 15-25 degrees. Persimmons kept refrigerated will go soft more quickly than if they are left at room temperature. 28
FMCG BUSINESS - MAY 2020
“SATSUMA MANDARINS ARE A GOOD SOURCE OF VITAMIN C AND FOLATE, WHICH HELPS SUPPORT IMMUNITY.”
Join us on
www.unitedfresh.co.nz
[ fresh produce ]
‘SWEET AS’ MANDARIN HARVEST UNDERWAY More than 12 million sweet tasting satsuma mandarins will soon be While the majority of the nutritious, new season fruit will be sold in available across New Zealand, as the season gets underway in Northland. New Zealand retail outlets, satsuma mandarins are also popular in Japan T&G, the largest citrus grower in New Zealand, is forecast to produce with some of T&G’s New Zealand crop being exported to the market around 80,000 crates of satsuma mandarins from Northland - one of over the coming months. New Zealand’s largest mandarin growing regions. “There’s no doubt, we have a top-quality crop. To ensure our satsuma Tom Chamberlain, T&G’s Regional Manager - Northland, says due mandarins are the best quality, they’re carefully picked by hand to to a warmer, drier summer, this season’s minimise any bruising. Given current seasonal mandarins taste great. labour shortages, the challenge for us has been “WE’VE WORKED WITH “Satsuma mandarins have grown in having enough hands to harvest the fruit. MANY NORTHLAND popularity over the past five years due to “As an essential business, we’ve worked their great taste, and seedless and easy to with many Northland employment agencies EMPLOYMENT peel properties. They’re now the largest to provide opportunities to locals, alongside AGENCIES TO PROVIDE volume citrus crop in the country. This year our seasonal workers, providing them with the OPPORTUNITIES TO the crop is fantastic – sweet tasting and required training on safe work practices. larger in size – making them perfect for the “We were also grateful to have a group of LOCALS, ALONGSIDE OUR whole family. women from the island of Kiribati here for SEASONAL WORKERS.” “As we head into autumn and winter, the blueberry season, who decided to stay to fresh satsumas are a convenient and TOM CHAMBERLAIN, T&G’S help with our mandarin harvest, as our pickers delicious way to access Vitamin C and all weren’t able to travel from another Pacific REGIONAL MANAGER of the health boosting properties that citrus Island to New Zealand,” says Chamberlain. provides,” says Chamberlain. NORTHLAND FMCG BUSINESS - MAY 2020
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24-25
MARCH 2021 Melbourne Convention & Exhibition Centre C&I Expo brings retailers and suppliers together over two big days of business. The retailer audience consists of owners and operators of convenience stores, service stations, independent supermarkets, corner stores, newsagents, mini marts and foodservice stores that have a convenience offer. Suppliers and wholesalers are also more than welcome to exhibit and attend. Visitors experience the latest in convenience products, services and merchandising.
For more information visit www.candiexpo.com.au
REGISTER NOW Australia’s largest and most important trade event for Convenience retailers
ORGANISED BY: Interpoint Events Pty Ltd in conjunction with C&I Media Pty Ltd
Media pty. LTd.
41 Bridge Road Glebe NSW 2037 Ph: 1300 789 845 | Fax: 02 9660 4419 Email: exhibition@c-store.com.au www.c-store.com.au
[ good business ]
NEW UPCYCLED SHOPPING TROLLEYS New World Albany customers will experience something new on their next shop, and it’s not a COVID-19 related protective measure. Customers will now be able to add a bit more sustainability to their weekly shop thanks to the store’s new fleet of hybrid shopping trolleys. The trolleys comprise a steel frame that is married to a plastic basket made using recycled plastic milk bottles. By using half the amount of steel compared to standard trolleys, Supercart, the Australian manufacturers claim the new hybrid trolleys have half the carbon footprint associated with their production and are 30% lighter, also making them easier to push for customers and staff. New World Albany’s new trolley fleet has two sizes – mid-size and large. The mid-size trolleys are made using 66 recycled milk bottles, while the large ones are made using 154 bottles. “Conscious consumers are looking for every opportunity to live and act sustainably,” says Jamie Eden, New World Albany store owner. “The recycled trolleys enable us to reduce our carbon footprint that much more and do our bit to help lead in sustainability in our community. We are proud to be able to offer customers an environmentally-friendly alternative to the traditional supermarket trolley.” The durable, rust-proof trolleys also have lower maintenance costs. “The trolleys are a great example of how we are looking to utilise
The new mid-size trolley
recycled material throughout the store and business and support more sustainable suppliers, closer to our own shores,” says Mike Sammons, Head of Sustainability, Foodstuffs New Zealand. “New World strives to be a leader in sustainability and we’re proud to offer New World Albany customers a more sustainable trolley option.”
DOLE NZ SUPPORTS LOCAL CHARITIES Fresh and packaged fruit supplier Dole New Zealand has stepped up to support Kiwis in need during COVID-19 by donating products to three charity organisations across the country - KidsCan, Love Soup, and Foodbank Canterbury.
Dole products ready for dispatch to NZ charities
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FMCG BUSINESS - MAY 2020
Coordinated by sales and distribution service PAVÉ, Dole pineapple slices, fruit salad and fruit mix were just some of the 7,800 products provided to the three charities to help support New Zealanders impacted by the global pandemic. During COVID-19, non-profit organisations have seen a huge increase in Kiwis needing support – with KidsCan reporting the number of families requiring support having increased from 30,000 to 40,000; and food banks in the Canterbury region seeing demand for food support increase by up to 300%. Dole New Zealand General Manager Steve Barton says it’s important for New Zealanders and businesses to rally together to support those most in need during challenging times such as these. “With many Kiwis out of jobs and hundreds of thousands of kids out of school, the need for basic necessities while riding out the crisis is huge.” “We wanted to do our small bit to help these admirable charities, who are just some of the many doing all they can to rescue struggling families and redistribute food that would usually go to waste.” On a global scale, Dole is shining a light on frontline heroes in the field and at home. Inspired by the sacrifices they have made for their health and loved ones, Dole’s ‘Sunshine For All™’ initiative is committed to bringing nutrition to those who need it most. To find out more about the work Dole is doing in New Zealand and internationally, visit Dole’s Sunshine For All, Instagram and Facebook pages.
[ profile ]
STORETASTE PROVIDES CERTAINTY Storetaste is shaking up the merchandising industry providing certainty with better prices, shared staff and actionable online reporting across New Zealand and Singapore. “We are committed to continue to support our team through these unprecedented times. This calls for adapting new methods and reinforcing the value of our team,” explains NZ Manager, Kelsey Maclean. “We will be increasing the wages for our reps in New Zealand, but we will not be passing this cost onto our brands for the next three months.”
Why choose Storetaste? The Storetaste platform gives brands, agencies and retailers the information to manage their sales strategically.
Merchandising actions are shared and the Storetaste platform becomes the new merchandising agency streamlining staff management, making the merchandising activity and the product in every store visible. If you want to empower and streamline your current team with the ability to report on the actions they are taking in store using the Storetaste platform, or if you are looking for an experienced merchandising team in the field already, Storetaste is the right place to look. Get in touch now to talk about our GREAT prices with ACTIONABLE online reports. Contact Kelsey Maclean, NZ Manager Ph 0273305018 kelsey@storetaste.com
“THE STORETASTE PLATFORM GIVES BRANDS, AGENCIES AND RETAILERS THE INFORMATION TO MANAGE THEIR SALES STRATEGICALLY.”
[ sustainability ]
HOW IMPORTANT IS SUSTAINABILITY? Consumers are concerned about the state of the environment and the impact that modern lifestyles and globalization is having on natural resources. Many consumers can feel that such practices are not sustainable in the long-term. As such, there is more pressure than ever before being placed on brands to be seen to be acting in an ethical and environmentally friendly manner and demonstrating sustainability initiatives and how they have minimum impact on the environment. So, what are consumers actually looking for? Will Cowling, Marketing Manager at FMCG Gurus
“67% OF CONSUMERS IN ASIA PACIFIC ARE CURRENTLY CONCERNED ABOUT THE ENVIRONMENT.”
34
FMCG BUSINESS - MAY 2020
Are consumers concerned? FMCG Gurus consumer insights show that 67% of consumers in Asia Pacific are currently concerned about the environment. This being said, 53% of consumers feel that it has worsened in the last two decades and 46% now believing the damage done is now irreversible. This highlights that consumers are recognising they are impacting the state of the planet and are looking for new ways in which they can help. One of the key concerns consumers have is global warming, as 58% say they are concerned about this issue.
What changes are consumers making? Consumers are recognising that their diets are having an impact on the environment. This has led to many dietary changes among Asia Pacific consumers. FMCG Gurus research shows that 47% of consumers have changed their diet in order to lead a more sustainable lifestyle. These changes include: • Reducing dairy products (38%) • Reducing meat intake (33%) • Turning to local food and beverage brands (44%)
What do consumers want from brands? Consumers understand that becoming more sustainable must be a collective effort. They believe that brands and manufacturers must be taking sustainability issues seriously and actively looking to improve. FMCG Gurus research shows that 49% of consumers think that food and beverage brands should be doing more in order to support the environment. However, claims supporting environmental issues may not be enough to satisfy consumers as 20% are untrusting of food and drink brands. Consumers are taking an active approach, as 64% say they research environmental pledges made by brands and manufacturers, with 48% looking mainly for initiatives that combat global warming. Providing the right information for consumers can be beneficial with building trust, as 75% would like brands to provide more information about the environmental pledges they are making. But what claims do consumers want to see? Consumer research agency, FMCG Gurus, shows that 58% of consumers actively look out for environmentally friendly claims on food and drink products. These claims are important for brands as 56% say they would be willing to pay a premium price for products that offer these claims. This is the same for claims such as reduced carbon footprint, as 45% actively look for this claim and 49% would be willing to pay premium prices. This article is based on our Global and Regional Sustainability Survey 2019. For more information please contact, info@fmcggurus.com
OUR PLASTIC PACKAGING: OUR BUSINESS THE TRUTH ABOUT RECYCLING PLASTIC CONTAINERS
HOW MUCH PLASTIC DO WE USE IN NZ?
Vs
EACH YEAR,KIWI HOUSEHOLDS GET THROUGH A STAGGERING
854 MILLION
1.76 BILLION
767
MILLION
87% OF PLASTIC CONTAINERS ARE EASILY RECYCLED NO!
THERE ARE
LIMITED MARKETS FOR PLASTICS
3
46%
4
6
NO!
7
26% THAT'S
2678 TONNES
15
%
OF NZ'S PLASTIC CONTAINERS THAT DON'T ALWAYS GET A SECOND LIFE
YET ONLY
NO!
62% OF PLASTIC CONTAINERS ARE PLACED IN RECYCLING BINS
NO!
WHY AREN'T MORE PLASTICS RECYCLED IN NZ? IT'S NOT JUST CONSUMER ERROR
181 MILLION CONTAINERS IN NZ LACK VISIBLE INFORMATION ON WHETHER THEY ARE RECYCLABLE!
46 MILLION
CONTAINERS ARE MADE FROM
ARE COVERED BY PLASTIC SLEEVES, WHICH PREVENT THEM BEING RECYCLED CORRECTLY
COLOURED PLASTIC
PREVENTING THEM FROM BEING RECYCLED INTO LIKE-FOR-LIKE ITEMS. THEY MAY ONLY BECOME BINS OR PALLETS, WHICH MAY NOT BE RECYCLED AGAIN
SLEEVELESS
CLEAR
HOW CAN YOU MAKE YOUR PLASTIC PACKAGING MORE RECYCLABLE? BY MAKING IT:
258 MILLION
ADD
LABELLING
1 +
AVOID
MIXED MATERIALS E.G.
PLASTIC STUCK TO CARDBOARD
+
FOR MORE INFORMATION ON HOW TO DESIGN FOR RECYCLABILITY GO TO WASTEMINZ.ORG.NZ
[ sustainability ]
PIONEERING SUSTAINABLE SKINCARE & HAIRCARE essano™, the no.1 natural skincare brand in New Zealand, is about to enter a new category, keeping sustainability front of mind. Shane Young, Co-founder of essano™ says: “Natural deodorants are the number one request we have had from our fans since we launched six years ago. We are also seeing huge growth in the natural deodorant category with some retailers experiencing 63% growth vs. the whole category at just 2%*. “Introducing essano’s three new natural deodorants: Lily Flower & Chamomile, Mandarin & Aloe Vera, and Fragrance-Free.”
After trialling natural ingredients from around the world, essano’s on-site chemists discovered four new natural actives proven to effectively destroy and inhibit the bacteria that cause bad odours. “It took years of development to create a roll-on deodorant that adheres to our strict product promise and actually works, removing body odour while allowing the body to naturally detox. We are so confident in this formula; we are offering a 30-day money back guarantee to those who purchase it and aren’t satisfied with the results,” says Young.
essano’s commitment to sustainability Shannon Green, essano Senior Brand Manager, says; “Once our chemists finalised the formula, we could have launched using new plastic packaging imported from China, however, this did not align with our sustainability principles. Instead we decided to spend more time and money to invest with a NZ supplier to create a container made of 100% recycled material (HDPE) – a NZ first!” * MQtr % Growth 28 February 2020
Our commitment to sustainability – doing our bit This is not the first time essano™ has pioneered sustainable beauty. Young says, “We are constantly investing in new ways to be as kind to our planet and community as our products are to your skin, hair and body.” 36
FMCG BUSINESS - MAY 2020
essano was the first NZ haircare brand to use 100% recycled material (rPET) for their shampoo and conditioner bottles. They invested in tooling with a NZ company and re-used material collected from both commercial and curbside recycling. essano was recognised at the Australasian Packaging Innovation and Design Awards for this pioneering transition. essano™ is also the first to move its body wash and body lotions from virgin plastic to 100% rPET, again supporting NZ suppliers in the process. “Since launching, we have re-used over 56 tonnes of plastic that could have otherwise gone to landfill. And this is just the beginning of a much bigger journey to minimise our waste and make it easier for our customers to do their bit too”, says Young. “To show our commitment, we’ve signed the New Zealand Plastic Packaging Declaration alongside other forward-thinking companies who have agreed to shift completely to reusable, recyclable or compostable packaging by 2025 or earlier.” “For us, sustainability is also about our people and our wider community. We are proud to work with local charities and organisations to host a local community clean up every six months. We also support local organisations year-round by providing product and donations to those in need, including our Annual Christmas Appeal.”
[ sustainability ]
O-I GLASS AND CASSELS: RESILIENCE IN THE FACE OF ADVERSITY O-I Glass have collaborated with award-winning Cassels Brewing Co. to make this video. While it was created before the impact of COVID-19 was felt in New Zealand, its message about resilience and success in the face of adversity are highly relevant. In the video Cassels describes finding a pathway to business recovery after the 2011 earthquake in Christchurch while retaining its core values of sustainability and community, and the importance infinitely recyclable glass plays in that process. The Christchurch earthquake had a huge impact on Cassels’ business. However, opening a new venue called The Tannery shortly after the earthquake helped to create a muchneeded sense of community. “Our earthquake experience showed us that the hospitality sector can come back strongly and that we can create our ‘in person’ community again,” says Zak Cassels, co-owner of Cassels Brewing.
The use of glass packaging was a key part of Cassels’ recovery as it purposefully and consciously implemented sustainability initiatives that support the community and the environment where it operates. “Awareness of the benefits of using infinitely recyclable glass is continuing to grow,” says Bayard Sinnema, Strategic Marketing for O-I Glass. “Cassels were delighted to find that O-I’s amber bottles contain up to 75% recycled glass, as it aligns with their aim to sell products that represent their contribution as environmental custodians within their community.”
COVID-19 impact
Cassels’ amber bottles contain up to 75% recycled glass
Cassels is delivering and supplying to supermarkets as normal during lockdown, plus supplying its products nationally through its online shop. At Level 3 and 4, off-licence premises who run a contactless delivery service can also stock the Cassels range.
Glass: Crafting a better future As you’ll be able to see, we made this video before the impact of COVID-19 was felt in New Zealand but we hope that its message about resilience and success following adversity are relevant. In it we talk about how we pivoted as a business after the Christchurch earthquake in 2011. Sustainability and the use of glass packaging was a key part of our post-earthquake recovery as we purposefully and consciously implemented sustainability initiatives to support both our community and the environment in which we operate.
Our earthquake experience showed us that the hospitality sector can come back strongly and that we can create our ‘in person’ community again. In the meantime you can be a part of our community and enjoy Cassels beer at home. As we say in the video, breweries need communities, and you are part of ours.
Contact details: www.cassels.nz • beerorders@casselsbrewery.co.nz • 0800 667 789
INNOVATION
Safety robots, automated fulfilment solutions and eStores emerge as New Zealand supermarkets evolve.
The new eStore in Auckland’s Penrose
Countdown opened New Zealand’s first purpose-built and permanent eStore in April, to help the busy supermarket business service the significant and growing demand it is seeing for online shopping delivery. The 8800 square metre store in Auckland’s Penrose looks like a regular supermarket, with a butchery, bakery, shelves of packaged grocery items, fresh fruit and vegetables. But there’s one critical difference in Countdown’s newest store – there’s not a customer in sight. Instead, a team of 200 personal shoppers (including 105 people brand new to the Countdown business), in a mix of full and part-time roles, will run the dedicated eStore and complete online orders for customers from ten of Countdown’s busiest Auckland supermarkets. Countdown’s General Manager Digital, Sally Copland, says the Penrose eStore aids the company’s swift response to the COVID-19 demand, which has already seen six stores temporarily closed to help increase online shopping capacity and ensure delivery services can be prioritised to those most in need at this time. “With New Zealanders staying home for the lockdown, visits to our website increased 300%. We are seeing ten times the amount of customer 38
FMCG BUSINESS - MAY 2020
registrations than we normally would each week, and additionally we have now delivered groceries to tens of thousands of New Zealanders who registered for our priority assistance service. “This means our new store dedicated to serving online shoppers is more important than ever,” says Copland. Operating 24 hours a day and seven days a week, the eStore will have the capability to fulfil more than 7500 online orders each week, thanks to a layout based on sales data that increases picking efficiency. The first delivery trucks will leave the store at 6am daily with the final deliveries taking place at 7pm every evening. When orders are not being picked, the eStore will be replenishing more than 25,000 products. Online Pick Up orders will continue to be fulfilled and collected from local stores, with increased windows available at each store due to moving delivery orders to the Penrose eStore. “Handling all online delivery orders from ten of our regular supermarkets will free up space in-store making it a better experience for both our store customers and our team,” says Copland. “As well as increasing our delivery capacity, we’re estimating being
[ feature ]
“WE ARE CONSTANTLY INNOVATING TO PROVIDE AN ULTRA-CONVENIENT GROCERY EXPERIENCE FOR KIWIS.” COUNTDOWN’S GENERAL MANAGER DIGITAL, SALLY COPLAND
DUCT OF T HE PRO Y CG M FIN ALI ST
R EA
•F
PRODUCT OF THE YEAR
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NEW COMPOSTABLE CLING WRAP
•F
Countdown’s General Manager Digital, Sally Copland
R• EA
capability to 15,000 online orders a week. Until then, personal shoppers will pick all groceries manually. No jobs will be replaced by the technology. “After more than 20 years since launching Countdown online shopping, we are constantly innovating to provide an ultra-convenient grocery experience for Kiwis. “We’ll continue to invest in our wonderful team as well as new technologies to enhance our mix of online delivery, online Pick Up and in-store supermarket shopping options,” says Copland.
DUCT OF TH PRO EY CG M
able to triple the number of Pick Up orders processed at the stores affected as a result of these changes. This is crucial in these challenging times when we know so many people are relying on online shopping.” Furthering the efficiency of the store, Countdown has partnered with Boston-based eGrocery startup Takeoff Technologies to soon introduce a partially-automated micro fulfilment solution at the site. The complex yet flexible unit means personal shoppers can easily access packaged goods without having to walk up and down store aisles. “While it’s challenging at the moment, ultimately today’s customers want to order and receive their grocery shopping on the same day. This innovative technology quickly picks and moves the most popular grocery items to our personal shoppers on a conveyer belt meaning they can fulfil even more orders with ease.” Fresh fruit and vegetables as well as meat, fish, deli items and slower-moving goods will continue to be selected manually to ensure top quality. The new technology comes into operation later this year and will increase the service
G
UCT OF THE OD YE PR A
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PRODUCT OF THE YEAR
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Compostic 100% Home Compostable Cling Wrap is the first home compostable cling wrap on the market worldwide. The product was developed by Kiwi founder, Jon Reed. Compostic wrap is certified home compostable by third-party, TUV Austria. The certification confirms that once it is in a home compost environment, the cling wrap will break down within 12-24 weeks. Compostic wrap is transparent, but tinted green with sustainable soy ink, so that kids, parents, and teachers can tell it apart from other wrap products. It is preperforated every 33cm, about the size of a dinner plate. This means the packaging doesn’t need to include a plastic cutter. The box is also recyclable and home compostable. All inks used in printing the packaging are soy based. www.compostic.co.nz
FMCG BUSINESS PRODUCT OF THE YEAR Do you have a Hero product that stands out from the crowd? If there’s a tasty tastebud teaser, NPD rockstar, or best seller in your portfolio that deserves to be crowned ‘Product Of The Year’ - we’d love to hear from you! We’ll showcase some of the finalists in upcoming issues and reveal the FMCG Business Product of the Year later in 2020. To find out more on how to enter please email: trubanowski@intermedianz.co.nz
FMCG BUSINESS - MAY 2020
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UCT OF THE OD YE PR A
[ feature ] Countdown Rototuna
The supermarket will also be the first Countdown store in the country to test a range of new technologies when it opens to walkin customers, including the deployment of a safety robot. The 6-feet-tall robot, affectionately named ‘Kai’ by the Rototuna team, will roam the store scanning for potential safety hazards on the floor, which the team will then respond to. “We’re excited that New Zealand’s first ever grocery robot will soon make its debut in Rototuna. Not only will Kai make the store safer and keep an eye out for obstacles, but she can also scan gaps in shelves, assisting the team to keep popular products stocked,” says Copland. The new Countdown Rototuna store has also provided a boost to local employment with 90 local team members at the store, including 69 who are new to the Countdown business.
Contactless convenience Countdown also opened its brand new store in Rototuna in April - one month earlier than planned - with the store initially solely focused on the significant demand for online shopping seen in the wake of the COVID-19 pandemic. As well as home delivery, the new Rototuna store will offer Hamilton locals contactless convenience with a store-to-boot Drive Thru for online customers using Countdown’s Pick Up service. Originally set to open to the public at the end of May, Copland says the COVID-19 environment meant the supermarket needed to act swiftly and change course. “Opening Rototuna first for online orders means our personal shoppers can shop for our customers without getting in the way of other customers in the store aisles. We’ll also be packing online pick up orders directly to the car boot – giving our customers a contactless experience to collect their groceries without leaving the car. With physical distancing in place we’re expecting this to be a popular choice for people who are able to leave their homes,” says Copland. Operating 12 hours a day and seven days a week, the new Rototuna store will have the capability to fulfil more than 2,500 online orders each week and service the wider Hamilton region. A date for public opening will be decided later down the track, expected to be in late June 2020. 40
FMCG BUSINESS - MAY 2020
A 6-feet-tall safety robot roams the Rototuna store, scanning for potential safety hazards on the floor
[ profile ]
LIVEBREW INNOVATION
LiveBrew delivers what no other probiotic technology has ever done before: A fresh live and active liquid product with guaranteed viability and no refrigeration required. LiveBrew is a unique combination of fresh, live, and active probiotic lactobacilli and the beneficial metabolites (organic acids) produced by those microbes. “LiveBrew contains strains of microbes that are very well researched and documented to have a wide range of probiotic characteristics,” explains BioBrew’s Andrew Prassinos. “LiveBrew is the only fresh probiotic with guaranteed viability (a billion live and active lactobacilli per dose) throughout the entire seven-month shelf-life period. Most other products only provide consumers with the number of microbes present at the time of manufacture. LiveBrew guarantees customers will get the live and active microbes that they paid for.” LiveBrew does not require refrigeration or any other special handling prior to opening.
“No other product available offers this unique combination of quality and handling characteristics,” says Prassinos. BioBrew Ltd spent over 10 years working on a long-term R&D process with Callaghan Innovation and Lincoln University and has demonstrated the value of their approach to probiotics with a successful decade of independent trials and sales in the animal health sector. The result of this sustained effort is the launch of LiveBrew, NZ’s finest fresh probiotic. LiveBrew is manufactured under a strict quality-control system at the Callaghan Innovation-funded Foodbowl facility in Auckland. This MPI-approved export-quality facility is NZ’s finest F&B development and commercialisation facility. LiveBrew moves probiotics out of the freeze-dried era and into a fresh new day! www.livebrew.co.nz (0508) BIOBREW andre@freshprobiotics.com FMCG BUSINESS - MAY 2020
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[ marketing ]
5 FOCUS AREAS FOR WINE MARKETERS DURING AND AFTER COVID-19 Wine Intelligence CEO Lulie Halstead reflects on five key focus areas for wine marketers during and after COVID-19, based on the evidence presented in a range of marketing theory and practice studies.
1 Lulie Halstead CEO Wine Intelligence
Continue marketing spend: As companies cut marketing spend, each dollar that is spent becomes more effective as it delivers a proportionally higher share of voice (SOV) amongst a total reduced spend across a category. This results in this spend being more ‘effective’ than ever with studies showing that "all things being equal, a brand whose share of voice is greater than its share of market (SOM) is more likely to gain market share" (Clarke, 2009) so increasing SOV leads to higher market share in the longer term, holding true also during times of recession.
2
Focus on core brands: During times of stress, upheaval and economic crisis, consumers tend to revert to what’s familiar as it makes us feel ‘safer’. This is particularly true when shopping trips are more challenging and there is a need to switch to new purchase channels (e.g. online). Analysis of brand purchase during previous recessions has shown that ‘high market share brands’ tend to win at these times. It’s time to park more niche brand development that might distract and focus on what we know works well.
3
Think about agile innovation and NPD that focuses on relevant benefits: There is also opportunity for selected NPD and innovation. NPD that focuses on helping consumers through these times and solves direct problems can be effective, such as convenient and economical larger packaging formats and online engagement activities. Collaboration with competitors, in an environment where competition legislation is being adjusted, can provide also new opportunity.
4
Avoid promotional discounts: There will be lots of channel pricing discrepancies and short-term promotions, but fixing brands at lower price points will keep them there, causing long-term viability issues. While these will be difficult times for many consumers will continue to rely on treats, rewards and everyday luxuries in a time of recession, and wine will remain both a treat and a reward, whether priced at $5 or $50.
5
Think local: In times of stress, our tendency as humans is to revert our focus to our local (and national) communities and this is even more true now in an era of lockdown and restrictions of movement. ‘Local’ consumers have the ability to buy direct more easily, visit more frequently as movement restrictions are lifted and feel engagement to support brands that are ‘closer to home’.
Wine Intelligence was founded in 2002 to support the global wine industry in understanding customers better. The company conducts insights and consultancy projects with trade and consumer respondents around the world and is now established as the world’s leading research-led insights, branding and marketing strategy consultancy for the wine sector. Their active clients, who include some of the largest wine businesses in the world, now number over 100 companies and organisations.
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FMCG BUSINESS - MAY 2020
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