On 13th April Six Degrees hosted an event for key stakeholders within the Food and Grocery sector in Melbourne.
At the Thought Leadership breakfast, the attendees were privileged to hear Kate Carnell deliver her final presentation as CEO of the Australian Food & Grocery Council. Her presentation highlighted the causes of the "collateral damage" currently facing the industry, as well as emphasising what can be done to manage the situation.
As the largest manufacturing sector in Australia, food and grocery has a turnover of $108B and employs 312,000 people. It is critical to the Australian economy yet is facing 3 significant challenges:
1. Political situation
- vulnerability to a range of issues, including health concerns, labeling etc
2. Cost pressures (relative to CPI)
- electricity & water
- commodity prices
- reporting requirements
3. The current trading environment
- NZ & Australia are the most concentrated markets in the world. In 1975, Coles and Woolworths had 34% market share, and now it is nearly 80%
- private label has increased from 15% in 2003 to 25% in 2010 and Woolworths and Coles have been very public about their intentions to increase this significantly
- consumer confidence is down
Carnell said public policy changes are needed to put parameters around the retail sector as the current legislation doesn't prevent market dominance by supermarkets.
However, she stressed industry also has a significant role to play and need to be on the front-foot with strategic and proactive activity, including:
- Reformulation - eg healthier products
- Front of pack labeling
- Appropriate marketing, especially to children
- Good research and data
- Commitment to "Healthier Australia"
- Environmental targets, including packaging, water, and energy
- An online portal / supermarket for branded products
Carnell believes it is this collective approach by the Food and Grocery industry that will assist in changing the current trend.
Kate Carnell's presentation was part of Six Degrees' highly successfully Thought Leadership Series. If you are interested in attending future seminars please contact Lorrie Storey on 03 8613 3504.