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Australia

Private Brand Down Under – Global Retail Brands

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This is the next in a series of posts from the latest issue of Global Retail Brands magazine this article features a look at Private Brands down under by Tom Prendergast, Research Director, PLMA.

Private Brand in Australia & New Zealand – Global Retail Brands

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If you want to find countries where consumers love private label, retail sales and store brands sales are growing, and international retailers are flocking to set up shop, you need to turn your attention to Australia and New Zealand.

Australia, with a population of 22 million, the sixth largest land mass country in the world, and New Zealand, with four and a half million, have both become major players in private label and the retail world and the future looks bright.

While Australia has two of the world’s largest supermarket chains, Woolworth’s and Wesfarmers Ltd., the owner of Coles, it was only in the past 10-15 years private label began to become an integral part of their sales.

In the early 2000’s both countries’ store brand products, had more in common with the generic products of the 1970’s in the west than the modern interpretation of the industry. While labels like Franklin’s “No Frills” did well, for the most part, store brands were a weak sector of retailing and private label share remained stuck in the 10% range for years.

Aldi Changes the Landscape
All that began to change when Aldi opened its first store in Australia in 2001. Many thought Aldi’s focus on its private label products and discount strategy would not work with Australian consumers. Today Aldi has 340 stores throughout the continent and are opening about 25 new stores a year. It also just passed IGA to become Australia’s 3rd largest supermarket chain.

“Aldi has been largely responsible for driving this home brand trend and renewed focus from the other retailers in the Australian marketplace,” said Bill Trainor, the General Manager for PLMA Australia/New Zealand.

“Certainly the introduction of Aldi into the market in Australia drove positive consumer perception towards store brands, as they discovered that quality was on par with national brands, and regarded the private label offerings from Aldi as being ‘brands only available at Aldi.’” Trainor explained.

Local retailers also took notice. Soon Coles, the second largest supermarket chain in the country, rolled out its “You’ll Love Coles” and Smart Buy brands. Today in Coles 741 stores you can find their house labels Coles Organic, Coles Finest, Coles Green Choice, and Coles Simply Less.

The continent’s largest supermarket chain, Woolworth’s, with over 870 stores, followed with its “Select,” line and today its brands include Homebrand, Gold, Macro, and Fresh. This March the company launched a new line of gluten-free products under the new “Free From” label.

The loyalty of Australian consumers for their local retailers also helped translate that faith to their store brands, as many other retailers around the world have discovered.

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“Coles and Woolworths have both improved and increased their store programs in the last 2-3 years in particular,” Trainor said. “While Coles is promoting the overall ‘fresh’ and ‘quality’ position of their store brand, the fact their main private label brand is labeled ‘Coles’ has no doubt played a role in this brand’s growth.”

This effort by the major retailers to increase the selection and quality of their home brands was successful, especially in the minds of consumers. In a recent GFK study, 82% of Australian consumers said private label brands were equal to or better quality than the national brands. In addition predictions for the future were also grand with IBIS World seeing Australia with a 30% share of private label by 2016.

“It is expected that with the focus on quality, innovation and packaging improvement, this consumer perception of store brands as being bona fide brands that happen to be available as exclusive offerings by retailers will continue,” Trainor added.

The change to the industry has been remarkable. In just the past few years Australian private label value share has risen to 25% according to Nielsen. Meanwhile Coles home brand sales topped 22% while Woolworth’s was just below 20%.

While not as dramatic, the growth of store brands in New Zealand is apparent as well. According to Nielsen, New Zealand is not far behind Australia’s with 14% of sales and growing. The major retailers in New Zealand have seen what was happening across the Tasman Sea and found success with home brands as well. The story of New Zealand’s largest retailer, Foodstuffs, which controls 52% of the market, and their home brand Pam’s, is a prime example.

“Foodstuffs has a strong private label brand Pams (see Global Retail Brands, April 2014), which consists of over 2,500 products and is reportedly the largest selling brand sold in the New Zealand grocery market,” Trainor explained.

The other major retailer in New Zealand is Progressive Enterprises, which is owned by Australia’s Woolworth’s group. They have taken their store brand lines Select, Macro, Wholefoods and others into their New Zealand stores in hopes of having the same success the retailer has seen in its home market

READ THE ENTIRE STORY.

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Australia Woolworths

Woolworths and Jamie Oliver inspire Aussies with ‘Created with Jamie’

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Australian retailer Woolworths and celebrity chef Jamie Oliver announced earlier this month the launch of Created with Jamie, a new Private Brand collaboration composed of great tasting, healthy and convenient fresh food products available exclusively at Woolworths.

Featuring 29 mouth-watering menu options, the Created with Jamie range is an innovative selection of quick and easy food choices designed by Jamie Oliver and Australia’s leading supermarket and made from the freshest, locally sourced ingredients. The six-month project was a collaborative effort with both partners contributing to brand development and packaging design. The packaging, designed by Marque Brand Consultants based in Sydney uses food as the hero element with photography by renowned food photographer Chris Court and styling by Sarah Tidesley from the Jamie Oliver team.

\"WF14073_1\"The range includes a number of Jamie’s wholesome favorites, including Smashin’ Ginger Lime and Chilli Chicken Fillets, Fruit & Nut Sprinkled Tagine Lamb Rump Steak and Wagyu Beef and Chorizo Meatballs. Also listed is the preservative free Sweet Solanato Focaccia and the Bloomin’ Brilliant Brownies, which are both made with 100% Australian flour.

\"WF13863_1\"Jamie Oliver said, “I love being in the kitchen but as a Dad, I know how difficult it can be to find the time to create nutritious, affordable meals from scratch every day of the week. This is why I’ve worked closely with Woolies to develop the Created with Jamie range.

“Now even the time-poor can feel inspired through my easy-to-cook fresh food range for the whole family. It’s essentially the kind of fresh meals I cook for my family on a regular basis but even more easy.”

\"WF14004_1\"Woolworths Managing Director, Tjeerd Jegen said, “The Created with Jamie range is just another way we’re helping to inspire a healthier Australia by providing convenient, affordable fresh food every day of the week.

“We know our customers are looking for more inspiration when cooking at home but also products that suit their lifestyle. As part of a truly collaborative effort with Jamie, we have sourced 100% Australian seasonal produce and ingredients to deliver these affordable and wholesome products. We’re convinced our customers will fall in love with the range as much as we did,” he said.

\"CreatedWJamie_UltimateLambShoulderThe initial range released this month features 29 products across Fresh Meat, Deli, Bakery and Frozen Foods is aimed to double this by the end of the year. All of the products meet Jamie’s strict criteria in relation to Animal Welfare, food additives and nutritional guidelines which has challenged our supplier base to look at products differently while still meeting the requirements to deliver fresh product across the vast distances of Australia.

Woolworth’s shoppers can find the Created with Jamie range in the deli, bakery, meat and frozen sections of the supermarket nationwide from Wednesday May 14th.

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Woolworths

Here Comes Peter Cottontail – Woolworths Select Easter 2014

\"WoolworthsFor Easter 2014 Australian retailer Woolworths introduced a joyful new seasonal identity for their Private Brand Woolworths Select. The design created by Marque Brand Consultants had to appeal to kids and adults alike, stretching seamlessly across multi-categories including Bakery, Confectionery and General Merchandise.

Opting for an illustrative solution, the packaging includes a suite of friendly characters around the central theme of the \’farmyard\’.

A degree of naivety and quirkiness was essential to the appeal of the characters, so the style is simple while still injecting some humor into their poses and actions.

The color palette needed to pop off of the shelf, so softer, more natural shades of color were chosen, for a fresh, light, and less artificial appearance.

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Woolworths

Woolworths Signs 3 Year Private Brand Bread Deal

\"Woolworths\"Australian retailer WOOLWORTH\’S strategy of signing longer-term supply contracts has shifted from milk into the highly competitive $2 billion bread category.

Woolworths has signed a $50 million three-year nationwide contract Private Brand bread contract with Australia\’s second-largest baker, George Weston Foods, The Australian Financial Review reports. George Weston, wholly owned by Associated British Foods of the UK, has been supplying Woolworths on annual contracts for the last 10 years.

In Australia Private Brand bread currently has 17% penetration of bread sold in supermarkets. But its share of sales has been static for several years, while sales of bread baked in-store has risen to 16% of the market as retailers install in-store ovens.

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Categories
Woolworths

Woolworths to Source Frozen Vegetables Locally

\"Woolworths\"Australian retailer Woolworths has announced a $17m plan that will see them cease importing frozen vegetables for its Private Brand products in favor of supporting local food.

The move will see the retailer commit to purchasing an additional 5100 tones of frozen vegetables from Australian food manufacturer Simplot, replacing imports from China, Europe and New Zealand

\”We don\’t think buying (frozen vegetables) from us just because we are Australian grown is sustainable for Woolworths — or any buyer — in the long term; we want them to want our product because it is financially attractive too,\” said Simplot’s managing director, Terry O’Brien.

\”To do that we have to bring down the costs of processing at Devonport; and the only way we can do that will involve new machinery, new processing methods and significantly less labor.\”

Tjeerd Jegan, managing director of Woolworths, said that the supermarkets decision to switch back to Australian grown frozen vegetables was driven by consumer demand for locally grown food.

\”Our customers are passionate about great Aussie-grown food, and so are we,” said Jegen.

SOURCE: Foodmag.com

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