9 421902 251016
August 2010 Volume 16 No 7 $8.95
THE BUSINESS OF MANUFACTURING • LOGISTICS • SUPERMARKETING
C hange the face of your freezer with Sealord A new range of great tasting, quality seafood products are available in the freezer! Sealordâ€™s new frozen range is proudly made in New Zealand using top quality seafood, a healthy blend of sunflower and canola oils, and authentic tasting crumbs and batters. All products are a good source of Omega 3 and are available in new pack designs and formats to bring consumers into the category.
Massive $2 million plus media spend!* *ratecard spend
New TV ads Print campaign Email newsletter to over 10,000 households Nationwide in-store sampling Targeted sampling campaign
category growth with a range � Drive of great tasting Sealord products to replace the existing portfolio new consumers into the category � Bring with quality and innovation are looking for convenient � Consumers and nutritious meal solutions
new frozen range delivers � Sealord’s on taste, health, and convenience packaging designs and formats � Fresh with easy-open and re-close features will stand out in the freezer
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Less is less The age of packaging
6 Editor’s note 8 Industry news 25 What’s hot
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The Auckland Food Show
37 Slicing the pricing What’s happening with markups?
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40 Dairy company’s electronic system it
Fonterra’s adoption of GS1net st
Foodstuffs general manager, retail Rob Chemaly
Category check 26 Poultry and eggs
Fresh and local In season
24 FGC ‘Big food’ a misnomer
Handing out $5 notes
OUR COVER Nestlé Milkybar is an iconic brand in New Zealand and is the market leader in White Chocolate with 37.8% value share of Total Supermarkets (ACNielsen Scan data to 23 May 2010).
42 Grocery business
Keeping you up to date with packaging, IT, supply chain and logistics
47 Legal Going barefoot in Australia
48 Nargon Eftpos â€“ are you ready?
49 Beef & Lamb
Best in the world
Have you been spotted
65 Diary Your calendar of industry events
50 Feature The best New Zealand pies
53 News 54 Nargon
All systems go
Own-brand wines make their presence felt
58 Industry news 63 Profile Kim Crawford
Online The hottest news about your industry, delivered fresh to your inbox twice a week. • Up to date • Relevant • Topical Stay in the loop by subscribing to our free twice-weekly email newsletter at www.foodnews.co.nz/subscribe or go to www.fmcg.co.nz for features, news, category checks and blogs at your fingertips 24/7/365.
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e ditor ’s note Vol 16
Serving the business of manufacturing, logistics and supermarketing
PAULINE HERBST – editor
The Auc k Food Sh land ow everythin had g doughnu , jam ts, chilli stuffed o liv even coc es, ktails in a can .
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Sustainability & authenticity As the end of the year approaches, activity increases exponentially with shows, launches and pre-Christmas promotions. The Auckland Food Show is always a major highlight in the food calendar and the Mediaweb team was there in full force to see what new products were on offer. It comes as no surprise that local produce and authenticity are more important than ever to consumers with small, family owned suppliers ranged in supermarkets nationwide. There is also a proliferation of new industry awards to reward these suppliers, and educate consumers about specialist foods, from the inaugural NZ Honey Awards to the inaugural New
© 2010 Mediaweb Limited. ISSN: 1175-8279 (Print), 1179-8718 (Online).
Pauline Herbst, Editor Official b2b magazine for the Gluten Free Food & Allergy Shows. Media sponsor: Pride in Print Awards.
Zealand Olive Festival to be held next month. NZ Bakels has even launched baking classes for artisan bread. The NZ Bakels Pie Awards was another well publicised event on the calendar and can be found in the C-Store pages.This issue also unpacks the current trends in packaging (a vital component of the FMCG industry): sustainability and innovation but as we discover, there is always a trade off. The FMCG team was also awarded an Honorable Mention in the recent 2010 Tabbie Awards for the feature: “Brand designers: a new breed” (October 2009). The international B2B magazine awards receive approximately 500 entries annually.
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GLUTEN FREE FOOD AND ALLERGY
be shared be d Allergy New Zealand an pport su to d, New Zealan work e bl ita ar their ch ity. un m m co e in th
IN E M I T FIRST TON
G N I L L WE
Saturday & Sunday 10am-5pm
28-29 August 2010 TSB Bank Arena, Queens Wharf N CHILDRE5 R UNDE
ONLY E E R F 0 1 $ entry
Check out the latest products Attend the expert seminars Free samples and discount offers
news New Zealand’s cheapest supermarket For the 11th year running Pak’nSave has taken the top spot as the nation’s cheapest supermarket. Foodstuffs (NZ) managing director Tony Carter says, “Competition is relentless and fierce and we work very hard to keep costs down in order to pass those savings on to our customers. “Since the first Pak’nSave opened in Kaitaia in 1985 Kiwis have eagerly embraced its unique food warehouse format. We now have 42 stores nationwide providing low food prices for families. “We are also very pleased to see our full service brand New World place so highly in this price study, compared to our Australian competitor. Overall, New World is clearly New Zealand’s second cheapest supermarket.” An independent survey, conducted in June 2010 by Consumer magazine, compared the prices of 40 top-selling products Bakeworks has recently atlaunched different asupermarkets new range across six regional centres. The list included biscuits, of mini bread, cookies with milk, fizzy drinks, cat food, butter, personal care and cleaning products. For the basics (flour, butter no artificial ingredients and shoppers bought the cheapest. or milk) preservatives. The Fresh meat, fish or produce weren’t included because Consumer Gluten Free Minis needed to three consider quality for a fair comparison. come in flavours, Pak’nSave MillChip, Street in Hamilton and Pak’nSave Lower Hutt Chocolate battled it out for the and title of cheapest store in the survey with Double Chocolate basket prices of $115 and $116 respectively. However, as the Coconut Crisps. l Hamilton region was surveyed on a 38 item basket as opposed
to the other regions’ 40 items, Lower Hutt narrowly beat Mill Street. The largest difference between supermarkets occurred in Auckland where Pak’nSave Botany Downs came out a considerable $26 cheaper than an Australian competitor. Pak’nSave was the cheapest supermarket in five of the six regions, with fellow Foodstuffs brand New World South City in Christchurch narrowly taking out the top spot by $2 thanks to a large coupon promotion. l
Food price index adds to debate According to the latest Food Price Index (FPI) data, New Zealanders spend 14 percent of their total grocery bill on fruit and vegetables, approximately 16 percent on meat, poultry, and fish and close to 21 percent on restaurant meals and ready-to-eat food. “The FPI shows that food prices fell two percent for the year to June 2010. Fruit and vegetables, meat, poultry, and fish, and grocery food are all cheaper than they were this time last year. This news comes days after consistent media suggesting that food prices are out of control,” says Food & Grocery Council chief executive Katherine Rich. “As Statistics New Zealand notes, food prices have been
FMCG AUGUST 2010
falling since July last year. Some will point to the monthly increase in fruit and vegetable prices (up 15.9 percent from May), but as Statistics New Zealand states, this is due mainly to seasonal factors – winter growing conditions. “We also suspect that the fall in groceries has a lot to do with the intense competition between the two supermarket chains and the competitive discounting that has been occurring on many grocery items.” Rich maintains while there will be month-to-month fluctuations in food prices it is the longer-term trend, which is important to keep a close eye on. This longer-term trend shows that food prices have been on the decline for the last year. l
n ews Hubbards invests in sustainability Mangere-based Hubbard Foods has recently activated the largest commercial installation in New Zealand of thin-film solar-panel technology. The joint initiative between infrastructure company Vector and Hubbards is the first commercial enterprise of its size to use second generation thin-film solar panels. The 160 solar panel installation covers 227.5m2, will generate 29,000 kWh of electricity per annum and will be used to power the lighting for Hubbard’s finished goods warehouse. This is equivalent to the power used to produce 169,000 packets of cereal or the amount of electricity consumed by 3.5 homes over the course of a year. “A significant feature of these new generation panels is that they continue to perform even if it is a cloudy day. This is a key difference with first generation crystalline solar panels, which have considerably reduced capacity when the sun isn’t shining,”
says Hubbard’s CEO Doug Paulin. Vector CEO Simon Mackenzie emphasised the opportunity the initiative provided for Vector in understanding the effect of distributed solar PV systems on its electricity network. “In particular we want to ensure that our network can support this technology into the future,” he says. “This is not a short-term commitment to our sustainable business practices,” says Hubbard’s business founder and chairman, Dick Hubbard. “In 20 years’ time, these panels will be functioning at similar levels they are today. “As a business Hubbards is committed to harnessing the natural resources available to us, and reusing it for commercial operations where possible. Down the line we hope initiatives like these will make sufficient savings we can then invest back into the business, but right now it’s about setting a commercial benchmark from which others can aspire to follow.” l
L-r: Dick Hubbard (Hubbard Foods), Hon Dr Nick Smith and Simon Mackenzie (Vector).
To view the energy being generated from the solar PV panels in real time visit the Sunny Portal at www.vector.co.nz/sunnyportal.
FMCG industry has trusted brands The Reader’s Digest Most Trusted Brand 2010 survey saw four FMCG brands winning their categories. New World came out on top as New Zealand’s most trusted supermarket, Wattie’s took home the food category. Gillette won the health and beauty category and Panadol was the most trusted health and wellbeing category brand. Foodstuffs, which owns New World, is delighted with the results. Managing director designate of Foodstuffs (Auckland), Murray Jordan says, “Trust is integral to the way we do business and it is something that Kiwis clearly value. A significant 87 percent of survey respondents stated that trust is important when choosing a brand, so maintaining the confidence Kiwis have in our brand is vital.” Jordan says, “As a 100 percent New Zealand owned and operated supermarket group we take pride in serving the individual needs
of our customers and supporting local communities. “It is rewarding to see that so many Kiwis trust New World to deliver a fantastic shopping experience, quality range and outstanding everyday savings.” This was also a good result for Wattie’s in its 75th Anniversary Year. General manager marketing Tim Skellern says the award is accepted with a mix of pride, humility and gratitude to Wattie’s consumers throughout New Zealand. “Wattie’s has a rich New Zealand heritage, founded on processing fruit in the Hawke’s Bay. From small beginnings we’ve continued to develop products that meet the demands of Kiwi consumers for foods that taste better, are healthy and convenient. “Awards such as this remind everyone at Wattie’s of our shared responsibility for consistently delivering food that sits at the very heart of the meals Kiwis love.” l AUGUST 2010 FMCG
Glass Packaging Mass Balance Data 300,000
Glass recycling on the rise The Glass Packaging Forum reports that New Zealanders recycled 166,575 tonnes of glass packaging last year and that two out of every three glass containers are now being recycled. The latest data about New Zealand’s glass packaging production, consumption and recovery shows at 66%, New Zealand’s glass recycling is ahead of the European average of 65% and Australia’s recovery rate of 62% and reflects a 32% increase since the Forum was established under the Packaging Accord in 2005. In May the Forum’s voluntary glass-packaging-product stewardship scheme received accreditation from the Minister for the Environment under the Waste Minimisation Act (2008) and is the only packaging material to have government recognition of its programme. Whilst recovery of glass containers has increased, consumption continues to rise because brands and consumers are choosing glass containers which are 100% recyclable. John Webber, general manager, says the results reflect the collective efforts of local authorities, waste management companies, community network recyclers and industry. “In 2005 50% of glass was recycled, almost all of it into making
FMCG AUGUST 2010
new glass containers. Today the Forum has provided the catalyst which means more than half of the total recovered glass is used as aggregate for building and roads, filtration systems and agricultural materials, with a significant volume exported. “The numbers we report today reflect the amount of glass which has been recycled. This is important because whilst more glass is recovered through commingled collections in Auckland, Christchurch and other locations the process renders the quality of around 70% of the glass recovered unfit for remanufacture into new glass containers. This means we now need to support the return of glass containers to the glass manufacturing plant in Auckland particularly with [glass manufacturer] OI’s new furnace becoming operational, increasing New Zealand’s glass manufacture. “Around 70% of glass is consumed at home with the remaining 30% away from home at bars, restaurants or in public places. As households become much better at recycling glass, we are now focusing our efforts on public places and are keen to build on the opportunities which will arise through New Zealand’s hosting of the Rugby World Cup in 2011.” l
n ews CS Brokers purchases Interlink Foods CS Brokers has purchased the business of Interlink Foods as of July 1, 2010. Interlink Foods has operated under the ownership and direction of Bruce Bathurst since its establishment in 1982. Interlink Foods acts wholly as manufacturerâ€™s agent and importer, distributing product nationwide direct into the major chains and cash-and-carries. The company imports specialty gourmet and grocery products such as Nairnâ€™s Oatcakes, Taylors Teaâ€™s, Sunrise Crackers, Voortman and Dare Foods, to name a few. The CS Brokers business includes the growth brands of ABC Tissue (Quilton, Earthcare, Savers), Freudenberg Household Products (Vileda, Ansell), Mrs Rogers, GS Pacific (Kohinoor, Haldirams) and Eat Right Foods. The CS Brokers management team of Grant Pemberton, Chrissy and Stephen Hay, and John Lawson, will be looking to its territory managers and merchandisers to work with the trade in developing its brand portfolio. CS Brokers will continue to support its brands both above and below the line and looks forward to discussing ranging options in the coming months. l
More from the Gluten Free Food & Allergy Show
The next Gluten Free Food & Allergy Show is being held in Wellington from the 28-29 August at the TSB Arena. As the official B2B media sponsor, FMCG magazine, in conjunction with Healthy Life Media has 10 double passes to give away to readers. The Auckland show was incredibly successful with queues of people lining up at opening time. To enter, simply email email@example.com and tell us where the Wellington show is being held.
WINNING TRUST BY THE BUCKET LOAD
â€œViscountâ€™s flexibility, nimbleness and local presence has been vital to the success of the campaignâ€? Cookie Time general manager Lincoln Booth The Cookie Time Christmas Cookies bucket had remained largely unchanged since its inception in 1985, and its design was looking dated and tired, and no longer reflected the current Cookie Time branding. Viscount developed an innovative new bucket design incorporating groundbreaking new technology â€“ Inmould Labelling (IML). Inmould labelling introduces pre-printed labels into the moulding process to create a seamless fusion of label and rigid plastic packaging. IML proved to be far more cost-effective for Cookie Time, and the new packaging has been well received by the public with record sales in 2009.
Ph 0800 473 373 www.viscountplastics.co.nz
AUGUST 2010 FMCG
news Chefs and the teamaker
reader giveaway Spot the bee Congratulations to July’s winning entrant Aaron Brinsdon from Gilmours Panmure, who successfully spotted our bee toasting itself in the fireplace on page 63. August is upon us which means another little bee hiding out in the pages of this magazine. Email your answer to editor@ fmcg.co.nz with ‘Spot the Bee’ in the subject line. Remember to add your address details in case you’re the winner. Buzz Channel: Robust, engaging, affordable online research specialists, helping you make business decisions. Phone (09) 379 8920. www.buzzchannel.co.nz
First pick The July issue featured Constellation’s Kim Crawford First Pick on the cover and asked “What range will replace the Kim Crawford Diamond Series in July?” The answer of course, was Kim Crawford First Pick and the winner is David Campbell from Fonterra Brands.
FMCG AUGUST 2010
A chef who was discovered by Master Chef NZ judge Simon Gault 16 years ago is representing New Zealand in an international challenge in Sri Lanka this month. Shane Yardley, head chef at Bistro Lago at the Hilton Taupo, and Gault, are to be part of a new chapter in gastronomy being written by family tea company Dilmah. Dilhan Fernando, marketing manager of Dilmah Tea, says tea and food are old companions, but fine tea, mixology, cuisine, adventure and charity are an altogether new take on a traditional theme. Yardley will join selected chefs from Australia, Belgium, Chile, Czech Republic, India, Indonesia, Lithuania, Maldives, Netherlands, Poland and Sri Lanka. During the fortnight Yardley will produce a hot and cold beverage, a four course dinner, a sorbet and a high tea plate. His dishes include roast green tea-spiced king prawns accompanied by mango and coconut and a cinnamon tea and citrus crusted venison fillet, roasted courgettes and fennel served with cinnamon, juniper jus. His hot beverage is a special leaf tea sweetened with Kiwi bush honey. Gault, who plans to write about the event when he returns to New Zealand, says he has been enjoying experimenting with tea and food. “I am interested in tea and its similarity to wine in that it too has terroir – the geographical location influences everything about the tea including taste and colour,” he says. As well as learning about tea at Dilmah’s School of Tea, the chefs will share in the Dilmah philosophy – of making business a matter of human service. They will cooperate in producing a one-of-a-kind Tea Culinary Experience at a gourmet dinner, with the objective of not only tantalizing palates, but also helping the underprivileged. The International Tea Culinary Experience will be hosted by Dilmah Tea, the Hilton Colombo and the MJF Charitable Foundation. The objective of the evening is to fulfil the dreams of aspiring chefs in the north and east of Sri Lanka. In these areas which were, until recently, ravaged by 30 years of conflict, development was retarded by war and the hospitality sector is almost entirely absent. The 12 chefs will each host a table of 10 and the revenue from the event will be matched by the MJF Foundation and used to establish at least 25 culinary entrepreneurs in Jaffna, Trincomalee, Batticaloa, Arugambay and Ampara. The first ‘Chefs and the Teamaker’ was held in 2008 to celebrate the 21st anniversary of Dilmah. l
Hospitality leads to grocery Gilmours is set to relaunch its Mt Roskill wholesale food and beverage operation with Auckland businessman Scott Brown at the helm as its new owner-operator. Brown has a number of successful retail ventures under his belt, including Café on Kohi, Rosehip Café, Richmond Road Café, Takapuna Beach Café and Store, and The Store on Kohi. When Brown took over on 26 July, it marked the culmination of months of improvements and upgrades at the Mt Roskill store. “We’ve fitted out the store with new supermarket style checkouts for our cash and carry customers. And our brand new point of sale system will make the whole operation more accurate and efficient,” says Brown. Gilmours Mt Roskill supplies businesses within central Auckland and to the north of the Brynderwyns such as restaurants, cafes and event centres. This diverse range of
customers will benefit from the flexibility of the new owneroperator structure. “As a dedicated owner-operator I’ll have a vested interest in exceeding my customers’ expectations and I’ll be ideally placed to make on the spot decisions to help improve their businesses. “After 14 years in the hospitality industry I understand what it’s like to run a business; what makes a good supplier and how to be a good supplier. I see owning Gilmours Mt Roskill as a fantastic opportunity to make doing business easier and more enjoyable for my customers,” Brown says. The change of business model is part of a wider move by Foodstuffs (Auckland) to transition Gilmours stores to the owner-operator model, bringing them in line with its New World, Pak’nSave, Four Square and Liquorland brands. l
AUGUST 2010 FMCG
news Social media campaign Three Coca-Cola ‘Happiness Ambassadors’ arrived in Auckland last month as part of the company’s new social media campaign. Dubbed ‘Coca-Cola Expedition 206’, the year-long campaign sends the young adventurers to the 206 countries where Coca-Cola is sold, bringing the Coca-Cola ‘Open Happiness’ campaign to life. The trio, who speak eight languages between them, have travelled for over 193 days since January 2010 visiting 114 countries and clocking up over 432,543 kilometres before reaching New Zealand. The global trip concludes in December with a celebration at the World of Coca-Cola museum in Atlanta. Bríd Drohan-Stewart, Coca-Cola marketing manager sparkling beverages, says: “Using online photo galleries, video clips, blogs, microblogs and social networking, the Happiness Ambassadors not only give people the opportunity to see the world through their eyes, but to also interact with them and guide them around their countries so they really get to see and experience local life and what makes those people happy.” The concept has already gained extensive coverage across the
globe, with over 3000 discrete media stories to date, with an estimated combined total of 64 million media impressions. Coca-Cola is working closely with Tourism Auckland to help plan a selection of destinations and activities to be put to public vote. l
New gluten free cookies Bakeworks has recently launched a new range of mini cookies with no artificial ingredients or preservatives. The gluten free Minis come in three flavours, Chocolate Chip, Double Chocolate and Coconut Crisps. l
Hubbard’s winter warmer Hubbard’s has introduced Vanilla Wholegrain Porridge Oat Sachets to its popular, larger 500g serving size. “Extending the Oat Sachets range with Vanilla Wholegrain Porridge was a logical step for us given the great feedback received from our customers,” says Rachel Burr, marketing and new product development manager for Hubbard Foods’. “Customers are particularly enthusiastic about our more satisfying serving size, which gives them more oat goodness and sustains them for longer after breakfast.” The new Vanilla Porridge combines five wholegrains, including oats, wheat, rye, barley and triticale, with a hint of creamy vanilla flavour. Vanilla Wholegrain Oat Sachets are ready to eat from box to bowl in three minutes. l
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South Island supermarket Construction of the $19 million New World Ilam supermarket is expected to start in October and should be completed mid 2011. Situated on the former Feltex factory site and designed to integrate with the proposed Vision Senior Living retirement village, New World Ilam supermarket will have a floor area of 3992m2. Roger Davidson, general manager of property and retail development for Foodstuffs South Island, said: “In the last three years we have invested about $80 million as part of our schedule of upgrading our New World supermarkets throughout the South Island. We also built a new supermarket at Lincoln last year. “Just in the Canterbury area alone we are at present spending $16 million on upgrading the New World supermarkets in Rangiora and Kaiapoi and have planning consent to extend our Belfast New World. “We know how appreciative the building industry is to have contracts of this size in these difficult times. It also
demonstrates our commitment to providing up-to-date and modern supermarkets for our loyal customers and emphasises our continued investment in South Island communities where our locally owned and operated stores are situated,” Davidson said. New World Ilam will go out to contract in September. “The new supermarket will be tailored for the area in which it is being built. There will be a very strong emphasis on fresh foods and an expanded product range. We will be unveiling a new European-styled bakery complete with a specially imported oven and customers will also be able to order espresso coffee as they enter the store. “A big part of shopping today is all about the experience and shoppers will be well catered for when the supermarket opens next year,” he said. l
AUGUST 2010 FMCG
National Sales Manager - Grocery Auckland based, national role Congratulations on finding your new role, which I reckon is one of the best in the entire grocery business. I’m getting ready to move on to another challenge within CCANZ, so I thought I’d give you a quick run down on just how good your job will be. You’re joining a company that invests heavily in its people, and it shows. Your people are awesome - from your direct team to your senior leadership team, you are surrounded by passionate, outstanding talent. Then there’s the scale of the business. Whether it’s the number of people working with you (colleagues and customers alike) or volume and revenue, this is very, very big business. And finally - your level of responsibility. In this role you’ll have ultimate accountability for delivering the P&L by shaping both market and customer strategy. If you’re someone who can celebrate success and learn from failures, and if you’re 100% there for your people and our customers, you’re about to have the time of your life. Craig Cotton Outgoing National Sales Manager – Grocery To apply for this outstanding opportunity visit www.coketopjobs.co.nz or contact Martin King at Coca-Cola Amatil (NZ) Limited on 09 970 8155 or by email firstname.lastname@example.org
FMCG AUGUST 2010
Search for the Milkybar Kid underway This month’s issue of FMCG features the search for a new Nestlé Milkybar Kid, missing in action for some years. Rachel Barnes, category manager confectionery, says: “The Nestlé Milkybar Kid is instantly recognisable in New Zealand, and stirs up the nostalgia of childhood innocence and adventure. However he has been quiet for a few years creating a generation of young people who have missed out on the Nestlé Milkybar Kid.” Launching on 9 August 2010, the nationwide search for the new Milkybar Kid will kick off with impactful on-pack graphics, and significant marketing investment including TV, PR, and digital. The only criteria for entry are an age of 7-10 years and a great sense of adventure, so any New Zealand family is eligible. Interested parties simply upload their auditions to www.milkybar.co.nz for a chance to be the next New Zealand Nestlé Milkybar Kid. The website has all the details and simple instructions for how to enter. This promotion offers the trade an excellent opportunity to drive incremental sales in their confectionery category. l
FRESH AND LOCAL Specialist resource writer John Clarke highlights developments in produce, fish and meat supply.
IN ITS PRIME
The first whitebait and scallops. Plenty of winter fruit: lemons, navels, and mandarins. Kiwi kiwifruit and cherimoya. The first new Hass avocados and the last expensive tamarillos. The traditional winter vegetables are still going strong this month: yams, parsnips, carrots Jerusalem artichokes and the best Brussels sprouts.
SHOT TO BITS Bluff oysters damn it!
SEAFOOD Now is the time for blue cod. Dory (all the deep sea Oreo Dory family) are often quite good buying, and are worthy of attention. Gurnard is always available and is in the market at a very good price. Lovely fish you can’t afford to ignore. The season for blue and silver moki is again under way and this is a very good option at this time of year, reasonably priced too. Mussel (New Zealand Greenshell) is the best value shellfish available and has a very high meat-toshell ratio, higher than any other. It is always available live in the shell and fresh or frozen on the half shell. This is the start of the season for the northern bluefin tuna but you will see bugger all of these giants (it has the highest fat content so it all goes overseas). Most of the tuna we see here is big eye tuna from the Fiji area, although there are also a few yellowfin on the market. MEAT Expect no drop in prices for New Zealand red meat over the next month. The lamb schedules are still on an upward spiral. Export lamb is getting a premium as overseas buyers seem to have cottoned on to the remarkable quality of our high-end chilled lamb cuts. So what with this and the dire shortage of stock going through the works our customers are just going to have to pay what the rest of the world is prepared to pay.
The MAF Outlook Report has suggested lamb would average $4.13/kg in 2011 season, or $72 per head for a 17.5kg lamb. So get used to it. Mutton prices also are breaking all records – just not enough sheep in this country I am afraid. Beef prices are very strong and with most chains closed for winter maintenance, improved throughput is a little way off yet. Local trade prices for beef are still climbing. Another small rise has kept the venison schedule moving up, as plants start up again, ready for the spring chilled harvest. The prices are now still $1.45/kg behind last year and many predict they will not reach last year’s levels but demand for farmed deer meat is strong and supply will be restricted with the fall in hind numbers. So with low supplies predicted the traditional summer fall in prices may not be as great as usual this season. Production levels are 22% down which is helping to keep prices up. Kill estimates for the year are well back and are not predicted to pick up until 2012 when hopefully increasing hind numbers will have produced killable offspring from the previous year. FRUIT All the New Zealand seasonal apples are still good quality so we still don’t need any imported rubbish quite yet. However Royal Gala will be about done soon and all the other New Zealand apples will effectively be gone by the end of October. The old season’s avocado is still around but these have just about done their dash. The first new season Hass and Hayes (pebbly skinned), our best avocados, start to come on stream late this month. This is the time for our local citrus varieties. Tangelos will be the best buying from mid to late September and keep an eye out for the Navelina, the Gisborne orange that’s been around for about five years now. It has a good large, even shape and is available from July to November. There will be plenty of well-priced navels around from now on, lemons
and limes will be arriving in better quantities and mandarins are still going strong. The Clementine variety started in early July and the Satsuma were a bit earlier in late May, early June. Expect them to peter out by the end of September. The kiwifruit main crop is in full swing and prices are remarkably good. We don’t see mangosteen that often, but recently there have been a few in the market from Thailand. They may seem a little expensive but worth a try. Persimmons will be around for a while and keep an eye out for the first New Zealand strawberries which will arrive in a month or so. It seems this fruit hits the market earlier each season. VEGETABLES What with the flow-on effect from the bad early winter weather July was hard on us, predictions for this period are for supply to improve a little but prices will be somewhat higher than average. The very first globe artichokes (if we are lucky) will be in the markets in a month or thereabouts with supply increasing over spring. The Jerusalem artichokes are available now and becoming more and more popular. They will be all over by October for another year. As with last month, yams are definitely a good option at this time of year as are carrots, parsnips, swedes, the turnips including Kohlrabi, celeriac, and main crop potatoes. Fennel bulb, onions, and of course leeks are all in the best condition this month, but good garlic is bloody expensive.
AUGUST 2010 FMCG
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Less is less The age of packaging
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it it y bi l l a i n b ta i i na a t inn sus sus ■ ■ y ■ ion i n l it t i o a i b ab a n ov at i n v n i ta a o in sus u st inn ■ s ■ ■ ■ ty n on i li ty i i o b i t l a a bi at ov ai n na ov n t i n s n a i t in su ■ sus ■ ■ y y t n ■ i t o i li bi l on ati i b a v t a n o a i n ov inn sta ta i u s s u inn s ■ ■ ■ y n on t i i o i t l a bi at ov na ov n i n n a i in st ■ y t i bi l a Trawl any trend hunter’s site and what are they n ai t s touting – packaging. Big, small, bright or white; su
it’s the skin that’ll get consumers burrowing into the fleshy product within. Pauline Herbst looks at today’s trends in packaging.
ackaging has to work hard. It preserves food, identifies your brand, distinguishes your product from competitors and somehow, still has to look pretty. More Tui girl than pageant queen it says: “pick me” but the ever-discerning consumer wants more. He wants packaging with a conscience as well as creative flair and it’s these needs that are driving the packaging industry’s latest developments. But there is another side to the glossy consumer packaging seen on the shelf – that used for the trade’s supply chain. Paul Curtis, executive director of the Packaging Council of New Zealand, says that sustainable packaging is one of the fastest-growing sectors, predicted to reach 32% percent by 2014. Shelve the visions of pulpy, recycled cardboard; plastic-based packaging is leading growth. “It’s partially to do with food wastage,” says Curtis, the general idea being that wasted food has even more of an impact on the supply chain than plastic. “Certainly the growth is in plastics; there is really good growth in flexible plastics and predicted growth in degradable and biodegradable plastics,” he says. But he also cautions against packaging businesses “reacting to what
they perceive to be consumer-driven wants and needs.They first need to do what’s best for their own businesses. Although surveys show consumers are making greener purchase decisions, evidence suggests they are still buying on price. “So you have to do what’s right for your business and look at packaging formats that fit with your supply chain. This should result in greater efficiencies and cost savings, particularly with non-consumer packaging, such as transit packaging that the customer doesn’t see.There is a greater environmental effect on supply chains in how you utilise your pallets and stack your shipping containers.” Curtis uses pallet slip sheets as an example. These large plastic sheets are made of recycled milk bottles, and slip between layers, saving on the depth of the pallet in export containers. Although he says, there is always a trade off. “If you move to a fibreboard box with a high recycle content, you can have up to a 20% increase in the weight. Supermarket efficiency can lead to an increase in material use; shelf-ready boxes with perforations around the side to rip the top off need an increased weight to maintain the rigidity of the fibreboard.” In the case of the pallet slip sheets, an AUGUST 2010 FMCG
p ack agi n g
na ta i
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o inn ■ y y ■ n ■ t o l it i i i n l t i b o a b a ov ati i na ai n t a ov inn s t n su in sus ■ y ■ ■ ■ t i n il ty ion tio ab i li a t n b v a i a o ov ta ai n inn nn t i sus s ■ su ■ y ■ n ■ it y t o l i i i n l i b o at ab na ov ati i n v n i a t o in ta sus inn sus ■ ■ ■ n y investment has to be made in how fork very long way away from this in New on i tio l it a t v a lifts are configured. Curtis says:“You’re Zealand.” ov no n n i n better off looking at internal logistics i ■ y and supply chain needs and working INNOVATION t i li b out what you need to maximise the Sean Delaney, general manager of i na
PACKAGING TRENDS • Countering the recession (sustainability equates to cost saving) • Brand building • Less is less • Big brother is watching you (regulatory bodies will be watching what claims you make)
FMCG AUGUST 2010
efficiency of your supply chain.” The humble Tetra Pak Aseptic carton forms the building blocks of another example of efficiency: “It’s a perfect shape, it’s brick shaped,” he says. “You can fill that with UHT milk and the combination of the packaging and treated milk maximises the space in the storage container and means you can have it on the shelf at an ambient temperature for up to 12 months with no refrigeration. “Tetra Paks can be criticised, they are made from high quality virgin fibre and are technically quite difficult to recycle [but can be], and they don’t need refrigeration.” With approximately 60% of energy consumed in supermarkets coming from refrigeration, anything to reduce refrigeration can make a massive difference environmentally. As Curtis says: “It’s important not to focus on packaging but look at how it is used within the supply chain. There is a general desire from brand owners and retailers to use sustainable packaging and biodegradable plastics which in itself is creating issues that need to be addressed. We have a good infrastructure for recycling traditional plastics, fizzy drinks and milk bottles but degradable plastics have the ability to contaminate that recycling stream and we don’t have any compostable facilities in New Zealand. “In order to recover those materials, like most things you need volume first. As this comes up it will become economically viable to separate compostable plastics but I suggest we’re a
Viscount Plastics New Zealand, is well placed to understand the vagaries of the FMCG market. The former New World owner/operator worked for New Zealand Dairy Foods, Cadbury and Cerebos Greggs before moving to the packaging sector. “This is the first time I’ve been out of FMCG and not immersed in it,” he says. “The supermarket industry is very well advanced, everything evolves quickly with very quick lead times. If you take the jump across to the packaging sector you can easily apply a lot of the learnings you have built up over time.We find the two different FMCG markets, customer and trade, have different requirements and we’re more domiciled in the trade sector.” The company handles returnable transit packaging such as produce crates. The bread crates used by Goodman Fielder and the soon-to-be-launched milk crates fall into this segment. Delaney says: “If you go back to the late ’80s, produce like mushrooms and Brussels sprouts was distributed around the supply chain in wooden or corrugated boxes. In around 1993 returnable transit packaging was introduced in the form of nestable crates. “The crates we make last six to eight years, they’re used and washed and go around the system.That’s how it works for sustainability. The other advantage is that the majority of the plastic can be recycled. “It’s not a simple process but it’s getting better.As long as you can make it and recycle it at the end of its life or include recycled product into that
il ab n i ta t sus sus ■ n ■ o ati ion b
Hally Labels was a double Gold winner at the recent Pride In Print 2010 awards. Carter Holt Harvey Packaging Penrose (Fresh ‘n’ Fruity Dreamy Lemon) and Amcor Cartons Christchurch (Select Hoki Fillets) also won Gold (see left).
without weakening the specs and ensuring it is food grade. You have to make sure that you know where the resin comes from.” One of the newer trends Delaney has noticed in packaging is that of Inmould Labelling (IML), which introduces pre-printed polymer labels into the moulding process to create a seamless fusion of label and rigid plastic packaging. IML is cost-effective as it removes the need for a secondary labelling operation,saving the company Let our success be your success! Hally Labels labour and production costs. are especially proud to have been awarded “The FMCG segment is a very small, two gold medals in the prestigious Pride in developing segment and our biggest Print 2010 awards for our work for Montana innovation has been the Cookie Time decorated pail,” says Delaney. Reserve Sauvignon Gris and Palamountains The challenge for Viscount Plastics Revive labels. with its long-time partner Cookie Time was to provide a new packaging The judges commented that the Montana solution for the Christmas Cookies Reserve Sauvignon Gris label was a well printed bucket, which hadn’t been changed ity l i complex job - printed aon b our combination since 1985. The solution was IML. ai n t flexographic and offset press, whilst the s su “The application of labels was always ■ Palamountains Revive label, printed digitally labour-intensive and problematic. IML n othe i t caught judges eye with it’s high standard of has taken a major headache out of the va oprinting. n Hally Labels are proud to deliver business,” says Cookie Time general in ■ superior quality labels. manager Lincoln Booth. it y y l n i t The new technique also boosted i o ab il atistop there, we also the branding impact of the product.ta i n ab vwhy But n o i s a Unlike paper or plastic labels, the inn suinwon 4 Highly Commended u st s ■ ■ mould label does not peel off, brand- ■ y n it y Awards! t o l i i i n l t i b a ing the pail v a Cookie Time bucket iofor b i na na vatotmake no it’s being o i a life,i n whether used t a t n n pegs or filled sus ■ sand castles, hold iclothes sus ■ y ■ ■ t n y li with ion tio l iatpot plant.
bi va at na ov no i n n a i t in ■ ■ y ty i t l i i bi l ab
WE’VE GOT THE BIG THUMBS UP
AUGUST 2010 FMCG
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na ta i
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o inn ■ y y ■ n ■ t o l it i i i n l t i b o a b a ov ati i na ai n t a ov inn s t n su in sus ■ y ■ ■ ■ t i n il ty ion tio ab i li a t n b v a i a o ov ta ai n inn nn t i sus s ■ su ■ y ■ n ■ it y t o l i i i n l i b o at ab na ov ati i n v n i a t o in ta sus inn sus ■ ■ ■ n y on i tio l it a t v a The new bucket also improved more than just a feel-good stamp on a ov no n n i n food and safety standards for Cookie carton, as Flett says:“Our accreditation i ■ y Time, while improving customer ex- took us quite a while to acquire as we t i li b perience. Simple steps like replacing had to go through a chain of custody. i na sus
the metal handle with plastic enabled a third layer of food safety inspection; the products could be scanned by X-ray after being packed in boxes for shipping. By all accounts the new bucket design wowed the public with record sales for Cookie Times’ 2009 Christmas Cookies campaign. “That was our first major launch into more mainstream food products,” says Delaney. “That technology has evolved over probably the last five years. It’s becoming more and more commonplace that the decoration and plastic are becoming one. From a marketer’s perspective, they get a good looking pack to differentiate product and for the manufacturers, it turns two processes into one. The Cookie Time project was the first time a twolitre pail had been decorated in New Zealand and it was made in our factory in Christchurch. “The supermarket sector tends to focus very much on thin-wall packaging like yoghurt containers and mussel pots,” says Delaney, “which is not our domain at this point. We are starting to look at those smaller segments but only where we can differentiate.” One company that is using sustainability as its major differentiator is Pakworld.
SUSTAINABILITY “Sustainable packaging got us through the recession,” says Jonathan Flett, operations manager for Pakworld.The company is New Zealand’s first Forest Stewardship Council (FSC) certified packaging supplier.The certification is 22
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We can be audited at any time.” The rigorous process incorporates the box, the paperwork, delivery docket, supplier, right down to the mill, forest and “patch of forest where that cardboard came from”. It sounds like a lot of effort and it is so why would a company go to such lengths? If you follow the old design principle, design for your customers, then packaging follows as a natural extension and customers want sustainable products. “More of our export customers are asking for FSC, particularly into the States,” says Flett.“Another good thing is that it can prove a product is made in New Zealand as why would someone come here just to get packaging done?” Currently Pakworld’s FMCG clients make up approximately 50% of its business, recently launching new beer packaging with Aotearoa Breweries – the first beer company to get FSC packaging. Pakworld’s sustainable angle isn’t just to push the bottom line with the company absorbing the costs without charging a premium for its product. “We’ve always tried to be sustainable with our decisions about inks and solvents. We knew FSC certification was the right thing to do. In a nutshell we’re buying sustainable products from wellmanaged forests.We’ve stopped buying cardboard from forests that aren’t well managed such as Brazil or Indonesia. “We don’t want them chopped down as they’re not replanting them or they replant the forest areas with palm oil.” The process clearly hasn’t affected
featu r in g
the company’s productivity, far from it, the independently owned Pakworld has been the recipient of 11 gold medals and 15 highly commended medals in the annual Pride in Print Awards since 1999. “The packaging can even look the same [as non-certified product] but at the end of the day this could be what swings a consumer walking into the and sustainability”, says Curtis. “It’s areas, and packaging is one of them. supermarket to buy your product.” In addition to its use of sustainably initiated by the global food and Viscount Plastics will be showing its managed products, Pakworld also re- grocery retailers and manufacturers, so new and buzz-generating rectangular cycles all cardboard and paper waste, if you’re exporting to companies like replacement for the traditional round redundant aluminium printing plates, Tesco, Walmart or Woolworths then PET jar, as well as demonstrating all plastic film wrap and PVC and you really need to be clued up and the how Kiwi ingenuity can meet local and international challenges. eliminates film through the use of code will help you. “There is a perception that the New Another exhibitor with a lot to CTP technology. It may be some time before FSC- Zealand Government won’t regulate show and talk about is BASF, which certified packaging is consistent in the environmental area and I would was recently involved with Lion worldwide. “It’s hard to push unless say that’s not necessarily the case. This Nathan’s East Tamaki brewery. A key all forest are FSC certified and it does Government has got very strong on part of the project was BASF Ucrete cost forests a lot to get each certified,” providing economic incentives to en- DP flooring solution for the facilcourage businesses to do the right thing, ity’s beer processing, packaging and says Flett. There are however a few aids for like the waste levy. Industry should be warehousing areas. Hygiene is also a focus as the old companies wanting to explore more on the front foot to avoid punitive regsustainable packaging. Paul Curtis ulation. And this Government is really saying “dead customers aren’t good for says the Packaging Council of New encouraging industry to do the right repeat business” certainly rings true. Event organiser XPO Exhibitions’ Zealand has recently released a code of thing voluntarily.” Less packaging means a need for Irene Smith says:“Both the Packaging practice for packaging design, education and procurement. “It’s written in more streamlined technology and in- Council and New Zealand Institute a way to take you by the hand and lead novation which is where the upcom- of Food Science and Technology env dorse and support this event because you through the minefield. It covers ing Foodtech Packtech can deliver. no n i their members benefit hugely. With resource efficiency, low impact mate■ rials, renewable sources, versus recy- SMARTER BUSINESS more than 170 New Zealand and l it y i ty cled materials and end of life options. If it’s not packaged, it doesn’t last, so overseas exhibitors, as well asnsemiab i li b i a na “It really helps you to make decisions Foodtech Packtech is a key business nars and business networking u st oppor-sta i inn s about those trade-offs and there is a tool for every business connected tunities, this is■a vital business tool.” su ■ y n ■ large section on environmental claims with food. Every two years the inThe from i n the show b i l it tiokey messageio a ab v t a n and the law.” is about evolving your business and dustry gets together to address shared o a i ta ai n ov i n n keeping Codes of practice are being challenges and view new■horizons. up with the times. sus u sIttis about inn s ■ y ■ things quicker, developed internationally and it is doing Foodtech Packtech n y ■innovation,on l it is, of course, o i t i i b i more productively. l only a matter of time before these not just smarter at Enter naabout food. New b iZealand atand aforefront vnew ov where less, n o n ta i “become the de facto standards foru scompanies the age of packaging, are at the of i n in ta in s design andu smanufacture ■ less. communicating about packaging in■ many reallyymeans s ■
y t ■ on i li n l it i b o ati i b a v a n o at ta i ai n ov inn s t n u s n s i su ■ ■ ■
AUGUST 2010 FMCG
Katherine Rich is the CEO of the New Zealand Food & Grocery Council. Email: Katherine.email@example.com
‘Big Food’ a misnomer Obesity is an issue but activists’ claims are misleading.
Obesity activists recently attacked the Government for its health strategy saying its work on obesity was a ‘tragedy’, and that obesity issues had ‘disappeared off the radar’.They also pointed the finger at ‘Big Food’ (whatever that means) as being responsible for the growing obesity problem within New Zealand. For those in the food industry such attacks are like what baseball great, ‘Yogi’ Berra would describe as “déjà vu all over again”. To be fair to activists there are some points we can agree on. Everyone involved in the food industry knows the obesity issue is an important one, and that the statistics are bad. The nation has become fatter over the past few decades and the prognosis is not good. Where we part company, however, is in the discussion of suitable solutions that will actually make a difference to New Zealanders’ lives. In the current debate there is a distinct gap between theory and reality. Most obesity activists are comfortable talking about statistics and the general problem, but fail to recognise that it’s quite a different issue creating positive change at the human level. At the individual level, where changes can be made to encourage healthier lifestyles, the issue suddenly gets very sensitive. Obesity activists continue to ignore the role of personal responsibility or the power of individuals to play some part in changing their lives. When obesity activists believe that the individual is not responsible for their weight problem, it’s much easier for activists to attack the food industry instead. Clearly, government or food company initiatives play a role in providing healthy food advice, but there is only so much both can do. Neither can instruct New Zealanders what they should put into their supermarket trolleys or mouths. And it’s not that there aren’t enough positive health messages out there. Governments and industry can spend millions on campaigns, health services and education programmes, but getting citizens to follow that advice is another matter altogether. Encouraging New Zealanders to maintain healthier diets and exercise regimes remains the ongoing challenge for all concerned. 24
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By Katherine Rich
Let’s examine some of the policies being championed by obesity activists. One group has called for ‘fat’ taxes on foods, which are high in fat. Another has called for ‘sugar’ taxes on high sugar products, particularly carbonated drinks. There is no evidence that such taxes will change behaviour, but what they will certainly do is hike food prices and increase every family’s food bill. Other groups have called for warning labels on certain foods, similar to those used on cigarette packets.The idea does not withstand scrutiny either. Just imagine it. Fat tummies on hamburger boxes or health warnings on the perils of eating too much cheese? New Zealand has a common-sense approach to food regulation – regulators are most unlikely to support such initiatives. The phrase ‘Big Food’ is deliberately emotive and misleading. It’s increasingly being used by activists to create the image that the food industry is a single target, when it’s made up of thousands of different companies making a myriad of products. The phrase is designed to connect obesity issues to the tobacco debate. It’s a ridiculous comparison which offends many who work hard within the food industry. The main difference is obvious. Harm from smoking is unavoidable – harm from food comes from overeating and unbalanced diets. Regulating food as if it were tobacco is an extreme approach that won’t work because the products are so significantly different. FMCG food companies work hard to deliver quality products that New Zealanders want to buy. Many of our members are actively involved in a range of community activities designed to deliver healthy food messages to the community – from the support of breakfast clubs or healthy eating programmes in schools, to reformulation projects, participating in campaigns such as ‘Eat Wise and Exercise’ or supporting the work of the Food Industry Group. The food industry is certainly playing its part.
What’s Hot changing the face of the freezer New Zealand’s favourite seafood brand is proud to bring a range of completely redeveloped, quality products to the freezer. Sealord’s popular family range has relaunched with five great tasting variants that make meal times easy. Proudly made in New Zealand using top quality Hoki and a healthy blend of sunflower and canola oils, each pack contains 6 Hoki fillet pieces that are snapfrozen at sea within hours of catch to capture the natural goodness of fresh fish, and then lightly coated in authentic tasting batters and Heart Foundation approved crumbs. All products are a good source of Omega 3, and with new easy-open and reclosable boxes variety is an option at the dinner table.
✔ Snap-frozen at sea Hoki fillet pieces ✔ Proudly made in New Zealand ✔ Good source of Omega 3 ✔ Authentic tasting batters ✔ Heart Foundation approved crumbs ✔ Natural shapes ✔ 6 piece packs in fresh designs ✔ Made with a healthy blend of sunflower and canola oils
Available now. Contact your Sealord representative for more information or phone 09 579 1659.
A non-bleach, no taint and no odour cleanser!
Without the use of harsh chemicals, NEW Dettol Surface Cleanser Spray can be used safely on hard surfaces throughout the house. Not only will you be helping protect your family by killing 99.9% of bacteria and viruses, including E-Coli, Salmonella, MRSA, Rotavirus and the H1N1 flu virus, you will also be reassured that you are removing 90% of allergens (such as pollen particles, dust mites and pet dander) from hard surfaces as well. The reduced chemical formula means that it is ideal to use in food preparation areas (on worktops, chopping boards, refrigerators and microwaves) and in the bathroom (on baths, washbasins, toilet seats). It is also perfect for protecting the little ones and it is safe to use on all baby equipment (highchairs, potties, changing mats, toys) apart from baby feeding equipment. Please contact your Reckitt Benckiser representative for further details on getting Dettol Surface Cleanser Spray in your store.
AUGUST 2010 FMCG
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What comes first, the
chicken or the egg? THE BREAKDOWN Current MAT to 18 July 2010 Total eggs: $142,519m. Value % Chg vs YA 3.1 Total frozen poultry: $110,149m. Value % Chg vs YA 1.7 * ACNielsen New Zealand ScanTrack (Databank)
Last month the news broke that the answer to the age-old question, ‘what came first, the chicken or the egg’, had been cracked with greater insight into how a protein called OC-17 creates an eggshell overnight. Without the chicken protein, there can be no egg, so it’s fitting that this category report starts with New Zealand’s poultry industry. POULTRY According to the Poultry Industry Association of New Zealand (PIANZ),the average New Zealander ate 32.5kg of poultry meat in the year ending June 2009 – 35.7% of all meat consumed. “Over the last 20 years, poultry consumption has increased from 14.05kg per person per year (in 26
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1986) to 36.5kg per capita in the year ending September 2006, however this figure decreased to 32.48kg per capita in the year ending June 2009 as part of the decrease in meat consumption in general. In New Zealand, the total meat consumption decreased 7.3% for the year ended June 2009 compared to the previous year.”
Despite consumption falling from the record levels noted in 2005-2006, PIANZ still maintains poultry is the highest percentage of meat consumed in New Zealand. Chicken is a particularly loved protein as it is versatile, simple to cook, readily absorbs flavour and is an excellent package of nutrients. The giants Ingham, Tegel and PH van den Brink dominate the industry with over 90% of production, with the remainder split between approximately nine smaller producers. Ingham Enterprises manufactures a broad selection of chicken products, with two main consumer brands: Ingham and Value Selections. “We see a real growth opportunity in the value-added frozen chicken category (sitting just under 4%
Brilliant ranging, made easy Ingham Red Box range, driving strong and profitable growth in the frozen chicken category.
✔ Breadth of Range – ensures wide consumer choice ✔ Freezer Presence – packaging and branding that displays effectively in any freezer environment ✔ Quality 100% – New Zealand premium chicken meat delivering popular consumer appeal
✔ Retail Support – significant and ongoing marketing support
Promotion running until 17 September.
For more information about Ingham Red Box range call Ingham’s sales department on 0508 800 785.
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growth MAT, Aztec), that according to our sales data, is driven by quality, value, convenience, and ‘newness’,” says Jonathan Gray, national sales manager, Ingham Enterprises. “With that in mind, we’re very excited about the upcoming launch of our new Duets range into the New Zealand market. Duets provides convenience and value, while still carrying the Ingham stamp of quality.” The Duets range is made with premium quality 100 percent New Zealand chicken and comes in three flavours: Alfredo, Ham & Cheese and Broccoli & Cheese. “Consumers are always looking for something new and exciting, and Duets are certainly that. These new products, which have been very successful in other markets, are a natural extension to our hugely popular Red Box range of products, and they are certain to be popular with the whole family,” says Gray. Tegel is another poultry giant to introduce a new product this August: Sweet Chilli Shredded Chicken Twin Pack. Brenda Galbraith, marketing manager, says: “This has a popular flavour and is perfect for quick salads, sandwiches, burgers or wraps. With more exciting plans ahead for a great Kiwi summer Tegel is looking forward to a strong rest of the year. “The focus really is around convenience, quality, variety and of course value to make it easier for 28
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consumers to incorporate this great source of protein [chicken] into their everyday meal occasions. Tegel continues to hold solid presence in product innovation within this market and has launched a number of great new products in the last few months.” This includes the relaunch of Fresh Tegel Wraps into the market in February with a new name, look and favourite flavour, Butter Chicken. Re-branding has proven extremely successful for the brand complemented with TV exposure and sampling activity. March saw the addition of Salt & Vinegar Chicken Tenders to the popular Tegel Take Outs, with extensive youth-focused sampling campaigns and promotions planned for the rest of the year. Tegel Fresh Premium Turkey also launched to market in the same month. Low in fat, rich in protein, versatile and convenient, turkey is no longer a Christmas affair and is now available in premium breast fillets, thigh fillets and mince to inspire everyday meals all year round. Galbraith says: “The Tegel Ready to Roast family has a special limited edition offer: Cranberry and Apple Stuffing Tegel Ready to Roast Chicken. A warm and popular flavour perfect for winter months in a specially designed premium pack.” The limited offer has been available
since 1 June 2010 and will run for approximately six months.
EGGS According to the Egg Producers Federation, New Zealanders consume some 1.7 million dozen eggs per week, the equivalent of 88 million dozen per annum. In the past 12 months supermarkets sold 36.5 million dozen eggs, just over 40% of egg sales, with a large number of eggs also sold in other retail outlets such as fruit and vegetable outlets, farmers markets and butcheries. Egg sales through supermarkets now total $142.4 million making eggs one of the larger supermarket categories in revenue terms, even more so in profit terms given the margins they generate. The overall market within supermarkets is growing at +4.5% in volume (dozens, ACNielsen MAT 20 June 2010) and +3.7% in dollar value over the past 12 months. Within the market, free-range eggs continue to grow at a faster volume than cage eggs. Freerange eggs’ (+23.6%) growth is being offset by slower growth in cage eggs (+2.6%) as shown in Table 1. However cage eggs still make up by far the majority of eggs sold, with 81.5% of the volume. While growing at a faster rate, the free-range eggs segment still accounts for only 15.2% of the total category and is
poultr y & eggs
TABLE 1 relatively underdeveloped in New Zealand. Overseas sales show freerange eggs hold 18% market share in Australia and 38% share in the UK, indicating further growth potential (Table 2). Cage Zeagold Foods markets the Farmer Brown range, the leading brand of standard eggs. Farmer Brown has grown at 4% in volume (dozens) and 5.3% in value over the past 12 months ahead of the total cage egg segment (ACNielsen MAT 20 June 2010). A key factor contributing to this performance is Farmer Brown’s revitalised brand positioning. Along with a new carton design and logo and website, is a new strapline, “Good Eggs Make Good Food”, which features on all Farmer Brown product lines. In a move developed to bring Farmer Brown’s brand values to life, an illustrated onpack character called Brownie was developed to engage and connect with target consumers. Brownie features in all brand communication including the website offering helpful tips along with general egg information, and an interactive Kids’ Club section targeting 5-10 year olds.
AVERAGE RETAIL PRICE
Source: ACNielsen MAT 20 June 2010
TABLE 2 SEGMENT
Source: IEC Website 2008
Recent promotions included the Easter-themed Farmer Brown Shrinkies, aimed to help parents get their children to eat healthy food in a non-confrontational way. This was supported with national television advertising, in-store demonstrations,
PR and sampling activity. Bernadette de Bono, Zeagold Foods’ marketing manager, says: “To further assist with driving category growth and firmly establish Farmer Brown as the innovator and ‘eggspert’ in the category, Farmer Brown also
Gameford Lodge-Already well known in the Food Service Industry for our Fresh and Frozen Duck products and now Distributors of Quality Beef, Lamb, Seafood, Pork and Chicken
www.nzduck.co.nz Phone: 09-377-5717 Fax: 09-353-1219 Email: firstname.lastname@example.org
AUGUST 2010 FMCG
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hatched a brand new approach to helping consumers gain confidence in the kitchen. “Appearing in a unique nine pack and distinctive orange carton, Farmer Brown Poachers are the newest addition to the Farmer Brown family. Specially selected, they are the ultimate eggs for poaching – guaranteed to produce perfectly poached eggs, every time. Until now the only option The chicken or the egg? If you want to know more about how researchers at the universities of Sheffield and Warwick applied computing power to understand egg shell formation, check out www.fmcg.co.nz for a link to the release.
FMCG AUGUST 2010
when selecting eggs was by size or grade. Poachers offer a completely new approach through segmenting by usage occasion (ie poaching). By offering a product based on end usage it eliminates fuss, and instils confidence in shoppers, ultimately encouraging increased usage.” Zeagold Foods conducted independent tests to determine the optimum size for a perfect poached egg. The winners were eggs that had slightly more yolk, and therefore had not absorbed as much moisture from the egg white. These typically come from younger hens, which produce better albumen quality, compared to eggs produced by older hens. The Farmer Brown Poachers launch was supported with national television advertising, print, PR, and eye-catching off-location displays and point-of-sale. Generally, as a segment,‘barn’ is not understood by consumers both internationally and locally. Internationally, the egg market is polarising between cage and free-range. Susan Bamfield, general manager of national egg supplier Independent Egg Producers Co-op, says: “In the current economic climate, consumers continue to recognise eggs as an affordable (yet nutritious) alternative to more expensive proteins. The work undertaken by Eggs Incorporated [the generic marketing arm of the New Zealand egg industry] has reinforced this message, pro-
viding consumers with recipes and information on cooking techniques to further promote the many benefits of using eggs.” The Co-op is made up of several regionally based owner/operator farms specialising in supply of quality product at a local and personalised level (‘fresh from a farm near you’). A central office handles national agreements plus marketing and promotional activity. The company’s group brands comprise 24% and 22% market share of TKA by volume and value respectively (Aztec MAT to 2/5/10) and are also a key supplier of private label. Its key-performing brands include Morning Harvest (cage eggs), New Day (free-range and barn product) and Sungold (free-range organic). Bamfield says: “Independent Egg Producers Co-op specialises in supplying the supermarket trade and has invested heavily in order to ensure that all product complies with current legislation and food safety requirements. Each of the farms operates under a registered Risk Management Plan. The company prioritises supermarket customers in all activities including frequent merchandising and offer of surplus product when available.” Whilst the total egg category continues to show growth (+5% by both volume and value in TKA, Aztec MAT to 2/5/10), cage eggs remain dominant, comprising 80% and 66% share by volume and value respectively. Of all the egg types however, it is the free-range sector (where the birds are free to roam outdoors) which has showed the strongest growth with an increase of over 27% in both volume and value. Independent Egg Producers’ ‘New Day’ free-range brand has facilitated this growth and is the top ranking free-range brand nationally, by both volume and value. “In addition,”
poultr y & eggs
says Bamfield, “consumers are increasingly looking to source ‘local’ products, and thus Morning Harvest and New Day eggs, produced and supplied regionally by dedicated and enthusiastic poultry farmers (‘fresh from a farm near you’) are well positioned to meet this demand.” Free-range Zeagold Foods’ Glenpark Woodland range of free-range eggs leads the segment, achieving growth of 56.9% in volume (dozens) and 54.8% in value (ACNielsen MAT 20 June 2010). The company has recently planted thousands of trees to provide corridors of natural shade and shelter at its farm in Dunback, East Otago. The eggs will feature as the ‘hero’ food ingredient on the upcoming New Zealand On A Plate Series 3 which will air on TV One and Air New Zealand International flights from September, presented by New Zealand chef Matt Bouterey and Dancing with the Stars judge Paul Mercurio. Zeagold’s De Bono says: “From a market perspective we would expect to see continued growth in the freerange egg segment at the expense of cage eggs as consciousness of animal welfare continues. “Overall eggs continue to increase in popularity with the positive dietary media coverage that they are being exposed to. Eggs are a lowcost, high-density protein, packed full of vitamins, minerals and other essential elements required for a complete and balanced diet. “With household budgets under increasing pressure eggs continue to play a staple role as a versatile, nutritious and economic way of putting food on the table.” The egg industry is waiting on the outcome of the review of the codes of welfare by NAWAC (National Animal Welfare Advisory
Committee) which will set the direction for egg production over the next decade for all housing types – cage, barn and free-range. The Eco Egg Co supplies specialty egg brands Eco Egg Free-range,Barney Barn, Bio Organic and Animal Welfare Free-range to the New Zealand retail market. Started in 1993 by Mike Schellkes, the company has consumer recognition that it is not involved in the cage market. A network of contracted distributors and merchandisers supports most regions throughout New Zealand with over 250 stores supplied. The SPCA has introduced a Blue Tick accreditation scheme for barn and free-range eggs that are cruelty free. Juliette Banks, accreditation and marketing manager, SPCA New Zealand, says: “You can’t guarantee any other eggs in the market are cruelty free. All our eggs (suppliers) are under the scheme are audited yearly and we have spot checks. Our standards are over and above the industry standards so they’re much happier chickens.” On the poultry side, Banks reports Freedom Farms and Harmony wear the Blue Tick, as do Sunset Eggs, Bennicks Barn Eggs, Pams Barn Eggs and Henergy. Henergy was first to receive the coveted SPCA tick back in 1999. The Wairarapa-based family business went from farming sheep to eggs, creating the Henergy System in the process. This replaced the traditional battery shed with a safe and comfortable barn. The Henergy range of cage-free eggs includes the recently launched gourmet range of size 5 eggs. As Darren Perry, CEO, says: “Smaller eggs have long been favoured by chefs for their fantastic flavour and are now available for your culinary creations. Look out for our Gourmet 5 eggs in your local supermarket.”
EGGS ‘FRESH FROM A FARM NEAR YOU’
s ,OCALLY PRODUCED THROUGHOUT .: s 'UARANTEED 1UALITY ALL FARMS OPERATE UNDER A REGISTERED 2ISK -ANAGEMENT 0LAN AND ARE AUDITED BY .: &OOD 3AFETY !UTHORITY s #OMPLETE 0RODUCT 2ANGE Morning Harvest CAGE EGGS .EW $AY FREE RANGE BARN EGGS 3UNGOLD ORGANIC FREE RANGE EGGS s .ATIONAL $ISTRIBUTION s !LL PACK SIZES s 0ERSONAL COMMITMENT TO SERVICE &/2 9/52 ,/#!, 3500,)%2 #/.4!#4
Independent Egg Producers Co-op Ltd
0800 787 327 .ATIONAL 3UPPORT /FFICE Tel: 09 366 3029 Email:email@example.com
AUGUST 2010 FMCG
ew Zealanders are serious honey consumers, consuming on average 1.4kg of the sweet stuff per annum, in comparison with the world average of 200g. This average has fallen from 1.9kg in 1993 as our population, ethnicity and food trends have changed. Maureen Maxwell, chief honey judge and executive member of the National Beekeepers Association of New Zealand (NBA), describes the rise of “new natural food connoisseurs with several different varieties in their pantry to meet all culinary requirements”, who are moving from bulk multifloral blends to high end, monofloral varietal honeys. So with a vested interest in getting high quality honey to avid Kiwi consumers, the National Beekeepers Association of New Zealand held an inaugural National Honey competition at its recent conference in Nelson. The Supreme Award winner was Jane Besley from Nelson, a hobbyist beekeeper who with some “very clever beekeeping” was able to 32
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produce some exceptional honey. The honey samples were judged on visual appeal, taste, technical handling and other criteria similar to wine show judging. Beekeepers could enter 17 classes, ranging from liquid and comb honey to bees wax and products from the hive, such as liquors and cosmetics. This is the only competition of its kind in New Zealand and was judged by Maxwell and associate judge Bill Floyd.
Winners: • The NZ Honey Co Trophy for the highest scoring ‘liquid honey’: Jane Besley, Nelson • The Arataki Hawke’s Bay Trophy for the highest scoring Naturally Granulated Honey (Colour Light): Jane Besley, Nelson • The Arataki Hawke’s Bay Trophy for the highest scoring Naturally Granulated Honey (Colour Medium): Murray Ellwood, Nelson • The Arataki Hawke’s Bay Trophy for the highest scoring Naturally Granulated Honey (Colour Dark): Murray Ellwood, Nelson • The Ecroyd Beekeeping Supplies
Trophy for the highest scoring Creamed Honey: Allen McGraw, Otago • The Comb Honey Producers Association Award for the highest scoring Comb Honey: John Wright, Auckland • The NZ Honey Packers and Exporters Association Trophy for the most excellent Beekeeper’s Special Reserve Honey: John Berry, Hawke’s Bay • The Honey NZ Inter-Bee Trophy: Auckland Beekeepers Club, received by Carol Downer • The Ceracell Beekeeping Supplies Trophy for the highest scoring Natural Beeswax Block: Carol Downer, Auckland • The New Zealand Beeswax Award for the highest scoring Cleaned and Dried Pollen: Jane Lorimer, Waikato • The Wild Forage Award for the highest scoring entry in the Products of the Hive class: Barry Foster, Gisborne, for his Honey Meads • The Supreme 100% Pure New Zealand Honey Award Winner for the highest scoring beekeeper overall: Jane Besley, Nelson.
Jane Besley from Nelson took home The Supreme Award. Judges said: “A small beekeeper who with some very clever beekeeping was able to produce some exceptional honey.”
Allen McCaw from Milburn Apiaries, Milton receiving the Ecroyd Beekeeping Supplies Creamed Honey Trophy.
Barry Foster from Alchemy Beverages Gisborne receiving the Wild Forage Trophy for exceptional Honey Meads. Class 16 ‘Products of the Hive’.
Chief judge Maureen Maxwell from Auckland and associate judge Bill Floyd from Marlborough.
John Berry from Arataki Hawkes Bay receiving the Beekeepers’ Special Reserve Trophy.
Carol Downer from the Auckland Beekeepers club receiving the Honey NZ Trophy for the highest scoring bee club honey.
AUGUST 2010 FMCG
Auckland Food Show The Auckland Food Show attracted the usual crowds of foodies and food lovers. Pauline Herbst takes a look at what’s on offer.
Katrina Wright sta rted sprouts as sh e couldn’t get good quality ones. We like the sunflower seed sprouts.
The team behind Fogdog Beer Batter.
an. in a c
nanas Fairtrade ba ne yo er make ev . ile sm
alking into the Auckland Food Show is like walking into a living fairy tale that revolves around food. Each exhibition is more than just an ingredient in a recipe, it’s a story. Like Telegraph Hill’s balsamic and cabernet drizzles in the Hawke’s Bay corridor. Geoff Crawford, director, marketing and sales reveals his recently launched Drunken Prunes and Puttanesca Tomato and
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Jacqui Dixon from SABATO pops off to Tuscany once a yea r.
Olive sauces, amongst chilli-stuffed olives and cream cheese with lemon orange relish. As he talks you can picture the olive grove in the afternoon sun. Maison Therese’s pickled onions were made by Monique Bradshaw’s mother when she was a baby and now she runs the business with her eldest daughter conducting marketing for the company. Around the corner, small independent distillers Lighthouse Gin
have just received a text they have won Bronze at the International Wine and Spirits awards in London. Wander through and you’ll meet Andrew, the Fogdog of Fogdog Beer Batter. A former commercial fisherman he used to make this on his own boat and his product is now targeted for people cooking at home or on the boat: just add beer. Every good fairy tale has larger than life characters so here are the pictures to tell one thousand words.
PRODUCT SHOWCASE: The Auckland Food Show showcased a number of new products soon to hit supermarkets.
Hansells’ new sprinkles Pinkaliscious and Orangitangi and chef’s strength vanilla paste.
ian Fry’s Vegetarian had vegetar le -sty ken chic and rolls sausage strips on offer.
You won’t find Rileys Premium Vodka Cream in the supermarkets. FMCG pick: butterscotch and chocolate but not the strawberry, it tastes like medicine.
Brydon Heller at Hellers wit h Sensational Thins Moroccan Lamb sausages.
These tiny little apples are targeted lunch box in or picnic affairs, sold es. tub dy han
elmaine: Pi New from D
Sunsweet Plum Amazins Diced Prunes. AUGUST 2010 FMCG
Dr Peter Stevens, chief executive, GS1.
Handing out $5 notes Checkout operators’ memories get a boost.
Handing out $5 notes. This was how Mike Agostini, produce lead at Walmart, described the problem of misidentification of produce in their stores. Walmart had always suspected that there was misidentification of fruit and veges at the till, but had no systematic way of working out how often this happened, and what it cost them. Now they know. And it is this knowledge that is driving Walmart and the largest Canadian supermarket chain, Loblaws, to roll out a new sort of labelling, based on GS1 DataBar. In fact, you may have seen evidence of DataBar in your local New Zealand supermarket – look for fruit (especially oranges, nectarines and plums) that has stickers with little barcodes on them. This is fruit labelled for the North American market. Think of current in-store processes. Goods in-store that are not currently individually identified with a GS1 barcode are generally keyed by the checkout operator through a four or five digit Price Look-Up (PLU) code. It’s amazing how they remember all the PLUs for apricots, pumpkin, lettuce, Braeburns and bananas. What a feat of memory! However, we should not be surprised to learn that checkout operators do make mistakes – sometimes incorrectly remembering the PLU, and other times misidentifying the item and thus mistakenly keying the wrong PLU. After all, a Braeburn apple (PLU=4103) can look very similar to a Fuji apple (PLU=4131), and a Honeydew melon (4317) can, to the uninitiated, look similar to a cantaloupe (4050). Toughest of all would be recognising a green kiwifruit (4030) from an organic kiwifruit (94030). In prac36
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By dr peter stevens
tice, organic product is normally packaged to separate it from conventional product (and organic buyers are the ones who do not like excess packaging). These issues were those quantified by Walmart, Loblaws and GS1 in-store, assisted by GS1 DataBar PLU stickers. These are the normal stickers you see on produce, but with a tiny barcode on them. Checkout operators can simply pop the produce on the scales and scan any of the stickers. Simple – no keying but the correct product and supplier identification. DataBar uses conventional Global Trade Item Numbers (GTINs) allocated by the supplier so all produce labelled or packaged with DataBar suddenly gets a traceability lift. Data from Walmart demonstrates how poor identification was at the till: • Ship-to-sales ratios for large to small fruit in nonDataBar stores were 76% to 104%, whereas in DataBarenabled stores the ratios were 87% to 90% (checkout operators often mistook large fruit for small fruit, and charged a lesser price accordingly). • In DataBar-enabled stores similar items with large differences in sale price (eg $1.28 versus $0.96), checkout operators were found to ‘identify’ the more expensive item as the cheaper item in approximately 10% of the sales. Expanded forms of DataBar can capture other key information at the till, including best-before date, weight and price relationship (at present on deli items the price is only scanned with a generic SKU code) and even serial numbers for general merchandise items. In summary, DataBar-enabling product and stores can provide item identification benefits, give syndicated POS data visibility (eg, via ACNielsen, Synovate Aztec) for categories of product where it was poor in the past, improve stock management and enhance traceability. Globally DataBar is rolling out country-by-country between 2010 and 2014. Want to know more? Check out www.gs1.org/barcodes/databar.
Slicing the pricing Supermarkets need to address public opinion on code of conduct. By Keith Stewart
he recent attack by various arms of the media on supermarket pricing, with Consumer magazine claiming mark-ups of 500% above farmgate costs, put pressure on the grocery sector to justify its existence. It was not just mark-ups that came under scrutiny, but also the culture of doing business and the very nature of the duopoly that dominates the market in New Zealand. The operation of that duopoly is usually expressed in terms of the two companies that control the marketing of the various outlet chains in New Zealand. This is somewhat misleading however, as Foodstuffs is effectively a co-operative within which owners fit their stores into one of the co-op chains – Pak’nSave, New World and Four Square. It operates much like a franchise rather than a corporate retail chain, and while it does exert corporate buying power over producers at various levels, its three principal brands do exercise different pricing structures, and there is a degree of individual decision making on marketing matters by store owners. Progressive Enterprises, on the other hand, is a classic retail outlet managing co-operative, owned by Australian-based Woolworths. The company has recently ration-
alised its outlet branding, with Countdown taking over the principal supermarket brand role from Woolworths, and becoming directly competitive with Foodstuffs’ New World stores. So, is the argument that the duopoly restricts competition in the grocery sector a fair one? Not according to New Zealand Food & Grocery Council chief executive Katherine Rich. “Competition is not restricted in terms of retailerto-retailer competition, that couldn’t be more intense,” she says. However, she adds,“It does in terms of the effect on the retailer/supplier relationship. Here the duopoly creates a distinct power imbalance. Unless a supplier has a strong and popular brand it’s difficult to maintain any power in the relationship. This is why margins continue to be squeezed.” Peter Smith, managing director, Progressive Enterprises says: “We do not have mark-ups of 200% or 500%. The numbers used by the media have been based on an average wholesale AUGUST 2010 FMCG
“Eighty to 90 percent of t he price paid by a customer is in t he cost of t he goods.” Peter Smit h, managing director, Progressive Enterprises. price, this does not reflect the price we pay. “The price we pay for our product can vary a number of times in one day and is determined by supply, demand and quality. There is cheap low-grade produce available in the market; this is not what we buy.” Explaining the differentials he says: “Eighty to 90 percent of the price paid by a customer is in the cost of the goods. Suppliers supply direct to our distribution centres not our stores. We pay for the cost of supply to our stores.” The issue of supply is at the core of the Green Party’s argument in favour of a code of practice under an 38
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independent authority. “Our survey suggests that unfair pricing practices on the part of some supermarkets are decimating many fruit and vegetable growers and putting their industry at risk,” said the Green’s food spokesperson Sue Kedgley. “It is simply unsustainable for growers to sell produce on a routine basis for less than the cost of production.” Recent survey data shows that 85% of New Zealand vegetable and fruit growers struggle to remain profitable. While this is only partly due to supermarket pressure in the local market, it becomes a political hot potato with
the food price index currently running 17% ahead of 2008 levels.Add to this the current enthusiasm in some quarters for elimination of GST on fresh food, and the matter has plenty of political momentum for some sort of intervention by government in the grocery market. In this sense,FGC is lucky to have the fine-tuned political nose of Katherine Rich guiding it, given her years of experience on the National Party front bench. She has already flagged her approval of a code of conduct, suggesting that the political realities make government intervention almost certain in some way, at some time. “The Minister of Commerce
could ask the Ministry of Economic Development to research the UK Grocery Code of Practice with the view to evaluating its potential application in New Zealand,” says Rich. “Given the level of public interest in this issue officials would benefit from keeping themselves informed on the British reforms.” However, Rich is not keen on the appointment of an ombudsman, pointing out that the British system does not have one as yet, having only begun its process earlier this year (in February). “Part of the success of a government code would be its existence, so suppliers had something to point to
in the event of unfair practice. A supplier would be able to point to a set of understandings. No retailer wants bad press being found to breach a good faith code,” she told FMCG. “Regarding the ombudsman, a code ‘policeman’, this role would deal only with issues that get as far as an actual complaint. Most within the industry would agree that if an issue gets this far the retailer/supplier relationship has probably broken down completely so it remains to be seen whether this is an initiative that will improve grocery relations. It might be one additional person within the Commerce Commission. It need not be the £5 million expense being talked about in the UK.” Conversely, Kedgley is adamant that some sort of authority is essential if the code is to work and maintain public credibility. “For the sake of New Zealand’s fruit and vegetable growers it is essential that any supermarket code of conduct is negotiated with growers and Horticulture NZ and is backed up by an independent arbitrator,” she told television viewers during a Close Up programme on the issue. “A one-sided code developed by supermarkets is unlikely to create a fair set of rules, which is what growers are seeking,” said Kedgley. One of the points of difference between the stance of Kedgley and that of Rich is the role of the code of conduct in addressing overcharging issues. In the new code in the United Kingdom, which replaces an older, voluntary model that was deemed not to be working effectively, the code applies to suppliers and customers. When the ombudsman comes into play in that system either group has the right to lay a complaint about supermarket activities. Kedgley obviously believes that nothing less than code enforcement will protect consumers or suppliers. “The suggestion by the supermarket chains that an ombudsman would
be too expensive is frankly ridiculous,” said Kedgley. “New Zealand’s supermarket duopoly is desperately trying to get out of the firing line over their exorbitant mark-ups. “For the long-term viability of the New Zealand horticulture industry and the wellbeing of all New Zealand supermarket customers an independent watchdog is essential.” Which puts the ball back into the grocers’ court, where public opinion is likely to demand some sort of positive response in the short term. Rich seems to be aware that change is coming, but she wants to make sure that the grocers’ interests are not undermined by overreaction to the latest revelations. Her position has been strengthened by the short term drop in the retail price index for the year to June 2010 which has been portrayed as a major fall in food prices. This was apparent in media coverage of the impending bill to remove GST from fresh foods, when amongst other things government support for farmers markets was proposed. “The jury is still out in the UK. That’s why I think we should wait and see what the UK ‘trial’ produces,” Rich says. The supermarkets themselves are not convinced there is any public pressure for more regulation of their business. Tony Carter, chief executive of Foodstuffs, told FMCG: “‘I don’t believe there is public pressure for greater regulation in the grocery sector. The fact that prices are lower than this time last year demonstrates that the industry is very competitive.” Progressive’s Peter Smith also makes the point that consumers are voting at the tills for where they prefer to get their supplies. “Latest news polls reflect that supermarkets account for 49% of produce sold in the New Zealand market,” he says. AUGUST 2010 FMCG
Dairy company’s electronic system Fonterra Brands has created an electronic product catalogue to meet the requirements of major customer Foodstuffs, turning the valve on for ecommerce with partners globally. ECN’s Anthony Doesburg reports.
airy products supplier Fonterra Brands NZ might be New Zealand’s biggest dairy company but when one of its major local retail customers requested a change in the way product information was delivered, it was only too happy to oblige. That’s because Fonterra Brands’ new electronic product catalogue for supermarket operator Foodstuffs will enable it to readily offer better service to other customers locally as well as globally. “We were requested to attain GS1net compliance by Foodstuffs. This means our product catalogue is accurate and conforms to the GS1 standards,” says Andrew Faid, who steered the project
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for Fonterra Brands. “GS1net is a multi-industry product catalogue, whereby we get our data ship-shape and lodge it in the GS1net cloud. Effectively we are loading up our product catalogue for subscribers (that is, our customers) to draw it down and assimilate the information into their back-end systems. This facilitates electronic ordering, supply chain, and merchandising functions. “It’s a big advance on the manual and somewhat haphazard paper-based ways of providing information about our products to our customers. In the past it was done intuitively – on the basis of verbal agreements,” Faid says. “This often entailed scrambling around at the last minute with ad-hoc files and spreadsheets to enable customer orders to be lodged and fulfilled. The situation prior to GS1net was immature and unsustainable; there weren’t really any established procedures in place.” While it was Foodstuffs who nudged Fonterra Brands in the GS1net direction, Faid says he could see from the outset that the benefits in terms of internal cost and time savings for Fonterra Brands could be expanded with other customers. “We don’t want to build this just for Foodstuffs; we want to build our catalogue in such a way that it can be used in many different iterations by multiple customers.” While Faid was manager of the GS1net project, Terry Patmore took
on the task of implementation and roll-out to the business users. Having determined Fonterra Brands’ electronic catalogue should be designed for use with any number of customers, the next issue was whether to devise an in-house solution or look for a ready-made one. Fonterra Brands required a system which could both receive and validate details of the company’s scores of products in their numerous variations. Once the data is entered in the system it is validated to ensure it conforms to GS1 standards, and then uploaded to GS1net for accessing by, in this instance, Foodstuffs. Patmore explained the project team had previously seen a more ‘basic’ GS1net middleware tool. After reviewing its limited functionality, his team was almost convinced to build their own. However, given the complex nature of the GS1net data pool, building and maintaining these solutions ‘inhouse’ posed a challenge and also a major risk. After a chance discussion with its electronic data interchange (EDI) provider, The ECN Group, Fonterra Brands was shown Innovit’s iICE Validator for GS1net software, which is a ‘GS1net Certified’ middleware solution. “We tried it for a month and realised how easy iICE was to use and, basically, it became a no-brainer,” Patmore says. Faid describes it as a moment of realisation. “After seeing its breadth and
featu re Fonterra Brands case study at a glance Business Objective Fonterra Brands New Zealand needed a system to make it compliant with GS1net’s electronic product catalogue exchange, a move that was mandated by Foodstuffs, a key retail customer for its Anchor, Mainland and Tip Top dairy products.
depth of functionality, we suddenly realised it would have been incredibly difficult to try to build something with equal functionality inhouse,” he says. iICE Validator makes the process of publishing an electronic catalogue as simple as extracting product information from Fonterra Brands’ ERP system, validating to ensure it meets the GS1net format, and uploading it. “iICE Validator is very easy to pick up,” Patmore says. “We had it loading and validating data within half a day.” The grunt work for the project is in ensuring the ERP data is in a clean state, which Patmore says is a matter of perseverance, rather than complexity. “It is then a matter of putting rules in place for keeping the information, contained in more than 100 data fields, clean. iICE Validator became the gatekeeper to ensure what we provide our customers via GS1net is correct and current.” With more than 1000 variations of products in the system, each represented by a Global Trade Item Number (GTIN), the catalogue updates can occur daily, creating plenty of potential for data corruption. “We had loose processes, and a tool like iICE Validator is only as good as the data that goes into it,” Faid says. “Terry and the team were instrumental in defining new work processes.”
Michelle Newsome, an ecommerce specialist at ECN, says the Fonterra Brands project is part of a trend by retailers across several industries to adopt GS1net, replacing the use of paper-based universal buying forms, or UBFs, for product ordering. ECN, a New Zealand based business-tobusiness messaging company, has been Innovit’s New Zealand reseller since December 2009, and has undertaken projects involving catalogues in excess of 12,500 GTINs. Innovit (the Sydney-based master data management company that built the iICE Validator) says the New Zealand adoption rate of GS1net is ‘exceptional’ and many companies are already seeing the benefits of tools such as iICE Validator for simplifying the support of the GS1 standard, and easing the complex data validation, loading, and publication steps on GS1net. Quite apart from the Foodstuffs request to Fonterra Brands to become GS1net-compliant,Faid says benefits of the project include an increase in data integrity across the entire business. “Combined with refined business processes, and accurate product information this will ultimately improve speed to market for new product introduction,” he says. “Data alignment between Fonterra
Solution Innovit’s iICE Validator for GS1net, implemented by Auckland-based The ECN Group, provides Fonterra Brands with the means to manage and publish information for more than 1000 distinct items in GS1net-compliant format. Business Benefits • Compliance with GS1net standards. • Reduced order error rates. • Conformance with Foodstuffs data requirements (and others in future). • Improved internal data quality. This case study first appeared in iStart.
and our customers results in a reduction in product ordering error rates and improvements in product merchandising and management at the store front. “Having gone through the GS1netcompliance process for Foodstuffs, we are ready to extend this service for other customers participating in Global Data Synchronisation (GDS) via the GS1 network of data pools. “The G in GS1net stands for global, so it could well be a springboard for bigger and better things,” says Faid. AUGUST 2010 FMCG
g rocer y b us ine ss Sustainable strategy finds success in food and beverage space Andrew Bayly, director of Cranleigh Merchant Bankers, explains. Move over private equity – there’s another strategy flexing muscle in the food and beverage investment space. And the bonus for New Zealand companies is it’s highly sustainable. Before the world economy weakened in 2008, private equity firms were a rapidly growing power in the investment world. Now the business community is taking into consideration other essentials seen in the new financial climate as important as monetary stimulations. Dynamics behind some recent transactions in the food sector on which Cranleigh Merchant Bankers has advised show business leaders are considering other critical elements of success when making their decisions. While successful deal flows can be driven by trade buyers, they can also be found in professional institutional investors with altruistic aims. A marriage between a well-known industrial player and a charitable trust with good track records of investments presents a healthy balance of monetary focus and social interest aspirations. Take the recent transaction between Hubbard Foods and Rotorua Energy Charitable Trust. Hubbard’s founding shareholders wanted an appropriate strategic partner to help grow the business, rather than sell the business as a whole. They saw it as the right move to maximise enterprise value. Rotorua Energy Charitable Trust has a well-balanced portfolio of investment interests in several New Zealand companies. As an investment partner the Trust will not only provide capital for Hubbard Foods to pursue further expansion, but also brings additional professionalism and expertise to the company board. As the investment strategy of the Trust has a medium to long-term focus, this transaction presents a certain degree of stability and longevity – a critical advantage over deals led by more opportunistic investors, such as private equity firms. A key feature which makes this deal outstanding, however, is the charitable nature of the new investor. What makes a partnership work at the first stage and will be strengthened over the long term is not only profitable growth, but also the expectation that parties entering the relationship share the same fundamental values. In this case the Trust’s philanthropic aspirations underscore and strengthen Hubbard’s image as a socially responsible brand and support the company and its founding shareholders’
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commitment to philanthropic aspirations, including sponsoring Outward Bound. Another deal which Cranleigh facilitated last year, DB Breweries’ sale of Liquorland to supermarket chain Foodstuffs, demonstrates similar success fundamentals. This time the successful purchaser is an experienced franchise operator, which runs as a cooperative and is owned by a community of New Zealand supermarket operators. Liquorland is a New Zealand based liquor retail chain, with 75 outlets nationwide at the time of sale. After thorough evaluation of proposals from several interested parties, DB Breweries decided to proceed with Foodstuffs. A purchaser like Foodstuffs was ideal for DB Breweries, as the supermarket operator’s core expertise is in franchise operation and is well placed to grow the existing Liquorland network and benefit existing outlet operators. The transaction was beneficial for both parties. DB enhanced its business relationship with Foodstuffs while strategically divesting one of its non-core businesses. Foodstuffs achieved further expansion into the liquor retail business through purchase of a long-established liquor chain. More recently Cranleigh advised Med-Chem on the sale of its New Zealand and Australian food ingredients business to Nuplex Industries. The business imported raw ingredients such as dextrose, maltodextrin and fructose and supplied Australasian companies. The acquisition is expected to increase the earnings of Nuplex’s specialties business and expand its footprint in the Australian market. Private equity firms are a strong and sophisticated group of investors and will always find their place in the business community. While the recent economic downturn has taken some heat out of them, as the economy recovers it is reasonable to expect their activities will pick up again. However, owners of robust businesses with good potential should consider a range of other things when they search for investors and business partners. We expect greater merger and acquisition (M&A) opportunities on the horizon for good business operators and professional investors. At Cranleigh we are always of the view that apart from monetary focus, long-term strategic fit and fundamental alignment of business values are key drivers of successful transactions. l
g rocer y busi n ess New identity for SPOS Provider of marketing at retail solutions, SPOS, recently completed a company re-structure to launch the SPOS Group. SPOS was established in 1981 and has reliably supplied Australian and New Zealand retailers, brand manufacturers, sales promotion, advertising and print companies with a wide range of services and products for price ticketing, merchandising, creative and sale promotional activity. David Evans, CEO of SPOS, said the creation of the SPOS Group was a natural progression for the business which added two new companies - icandy Creative and Propel Interactive - to its portfolio last year. “On one hand, brands and retailers need a much more comprehensive offer to custom design displays and interactive technology to help them drive consumer decisions at point-ofsale,” Evans said. “On the other hand, shoppers are looking for immersive experiences that will provide them with the information they are after and interactivity with the products. Our group of companies can now address each of these needs from the brand/retailer and shopper’s point of views.” The SPOS Group currently includes three companies: SPOS Retail which supplies a large range of ready-made point-of-sale retail shelving, ticketing and merchandising products; icandy Creative which develops tailor-made point-of-sale displays and creative concepts; and Propel Interactive which focuses on interactive displays. “This is a very exciting time for the SPOS Group and it is only the beginning. We want to stay ahead of trends happening in in-store marketing and make sure we provide Australian and New Zealand brands and retailers with new and innovative products that fit their needs. So we will be introducing more services, products and companies as the year unfolds,” Evans said. l
Wrapping up sales Wrappz is a simple tool with a strong visual element that businesses can use to help showcase brands on electronics. They are produced on patented 3M Controltac Plus graphic film, which has a pressure-activated adhesive that allows you to position and reposition the Wrappz on your device when applied with light hand pressure. Wrappz also have a protective barrier to help prevent the usual wear and tear that occurs over time, plus they’re easy to remove, so you can update your look as often as you reinvent your brand. Through placement on gadgets such as mobile phones and laptops, Wrappz provides both business owners and employees the opportunity for brand promotion during presentations or outside the workplace. It’s simple to create your own Wrappz. Just choose your device (mobile phone, laptop, iPad, iPod or gaming consoles), upload your own image or choose from the range of Wrappz designs that are ready to go on the site – and it will be delivered to your home or business within days. l
PAUL MOVED 500 PALLETS LAST WEEK WITH ONE HAND It’s no small feat moving 500 pallets with your bare hands. Paul did it in less than one minute, with just one phone call to Cubic. Better yet, they arrived at their destination on time, intact and with no fuss. Cubic – The long haul distribution specialists. 0800 2CUBIC www.cubic.co.nz firstname.lastname@example.org
AUGUST 2010 FMCG
g rocer y b us ine ss GST and systems readiness With 1 October looming, it’s important to make sure that your business is prepared. James Page runs you through the basics.
On the face of it, the GST rate increase is easy to understand: a percentage increase from 12.5% to 15% on 1 October. Yet, as many organisations are starting to realise, when it comes to their office software systems, things are actually more complex and a set of common questions is emerging. One of the most commonly asked questions is seemingly very obvious – which systems in our organisation handle GST calculations? You would immediately think the accounting system or forward-facing sales systems of course. But, in reality many organisations may have other systems dealing with GST calculations that are less obvious. The fact is that with the deadline in place organisations, no matter what size or sector, can no longer ignore the need to understand how the change impacts their business – particularly the complexities of managing that change from a systems perspective. Following are some of the key concerns for businesses and how to address them: Which systems handle GST calculations? This needs careful consideration. As well as your general office accounting system, there are likely to be other systems in the office which deal with GST such as Point of Sale (POS) systems used for scanning bar codes, product information management systems, websites, customer quotation systems, ad-hoc spreadsheets etc. Organisations must carry out checks to ensure these are set up to cater for the new rate. Can you change the GST rate on your systems or is it hardcoded? This has obvious implications with regard to how easy it may be to bring every system up to date when the new rate comes into effect. If your system vendor has specified in the software that the rate is set at 12.5%, how does this figure get changed? Is the change made in only one place, or must multiple changes be made? Some systems refer to a single setup source however older, legacy applications can have hard-coded GST rate calculations which require changing
and rigorous testing before release on 1 October. Can you change the GST rate retrospectively? Why is this important? This has two implications, firstly, can businesses enter the new rate with an effective date and then on 1 October, your systems just assumes that rate or will an organisation need to perform a cutover on 1 October. Naturally this makes the cutover process more critical. Secondly, in the transitional period after 1 October, organisations will have to deal with situations which may involve both rates as the old 12.5% rate will still be required for some transactions. When entering these transactions in your new system you will need to manually override the code displayed in the “GST” column with the appropriate new code. Will open purchase and sales order lines be updated by the GST rate? Changes to the GST rate should impact GST calculations for un-invoiced sales and purchase orders. In some systems, GST rates are brought onto the purchase and sales order lines therefore creating inaccurate calculations at point of invoicing. Do you therefore need to force an update in your system or do you need to perform an update to the data? Again, this has implications with regard to how easy or complex it may be to update and maintain your systems. Does your system(s) manage credits for purchase and sales? Will your system(s) be able to credit back at the 12.5% GST rate for credits to orders raised prior to the GST rate change? A more complex scenario, but one that many organisations will face. An item purchased before 1 October will have included 12.5% GST in its price. If this item needs to be returned after 1 October, and the amount is credited, then continued next page...
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g rocer y busi n ess GST and systems readiness continued... it’s important to manage this credit at the 12.5% rate and not the new 15% rate. Businesses will need to ensure that dual rates are maintained during a specific period to manage the credit process and make changes to front-end sales systems so that those applications can recognise this specific refund logic.
in systems. What treatment needs to be applied to these sums and what updates are required to your existing data? In some cases, systems can manage these changes automatically; however, other systems and manually managed spreadsheets will require scripts and/or manual manipulation.
Will your systems require updates to existing, recurring customer orders, laybys and deposits? Managing transactions such as subscriptions, deposits, laybys, rebates and volume discounts will require careful attention. Existing subscriptions will require updating with new GST rates if there is a contract of supply where invoices are raised monthly. However different treatment will be applied to subscriptions that are invoiced as a lump sum at the beginning of the period and treated as a monthly debt. Similar consideration needs to be paid to other amounts that are recorded as prepayments, debtors, and accruals
Ultimately, it is essential that organisations ask themselves these questions and put a plan in place. With just over two months to go, this is an issue that requires urgent consideration. l James Page is Microsoft Dynamics AX Service Line Lead for Intergen, New Zealand’s Microsoft partner. Intergen will be running a twilight seminar on GST and software. For more information on venues and dates check http://www.intergen.co.nz/Our-Events/.
1SPUFDUZPVSGVUVSF JOWFTUJOZPVS*1 It’s your intellectual property that makes your business successful – your product, your brand, your packaging, your designs, your advertising. To grow your business you need to protect, enforce and profit from your IP. As New Zealand’s leading intellectual property firm, we have the expertise to help you protect, enforce and commercialise your intellectual property rights in New Zealand, Australia and throughout the world. We act for nearly half of New Zealand’s top 100 companies and almost half of global Fortune 500 companies. Talk to us about where you want to take your business.
0800 257 275 | www.ajpark.com | New Zealand | Australia A J Park is the trading name of the two partnerships of A J Park Law and A J Park Patent Attorneys.
AUGUST 2010 FMCG
Rob Chemaly Foodstuffs Auckland Rob Chemaly first joined Foodstuffs in early 2003 as part of the Strategic Projects team and in 2005 was appointed to the role of general manager Strategy and New Ventures. During this time he was involved in the establishment of Foodstuffs Fresh, the acquisition of Liquorland and the change in the Gilmours business model. He now brings 15 years of experience in retail and a background in law to his new position.
Q&A Pauline Herbst catches up with Rob Chemaly, recently appointed general manager of retail at Foodstuffs Auckland. them around the revision of their fresh produce supply chain. That eventually led to a permanent role with Foodstuffs which morphed into a role.The work I was doing was at the leading edge.
Australia. It was privately owned and had significant IP in the supply chain around fresh produce, so we launched Foodstuffs Fresh as a 50:50 joint venture with them.
FMCG: How did you go from law to the grocery industry? RC: Our law firm was acting for Johnson & Johnson and I formed pretty good relationships with them so when they heard I was interested in leaving law they gave me an offer I couldn’t refuse. They’re a great company to work for, very progressive and very keen on development.
FMCG: What prompted the change to the Gilmours business model? RC: Traditionally Gilmours was a centrally managed business.We had a very successful retail business model but wanted that working in a whole segment of the market with a B2B as opposed to a B2C focus. The BAT business also changed its distribution model and that forced us to transition the business to an owner/ operator model.We transitioned a pilot in late 2008 and the early signs were fantastic in terms of customer benefits. It was far more customer focused than a corporate model, very responsive and able to tailor to local requirements quickly and easily. The Gilmours brand has become another Foodstuffs brand, treated the same as all the other brands. Previously it had its own support structure, IT system and was measured on its own results.
FMCG: What do you think your biggest challenge will be in your new role? RC: We’ve got a very successful business model and are dominant. The biggest challenge is growing that dominance. Over the years sometimes success does breed success, sometimes it breeds complacency and the challenge is to drive out any sense of complacency and ensure we continue to be aggressive, focused and delivering to our customers in order to retain their custom. I think the other challenge of course is that there is such a wide range of opinions available to customers today in the marketplace. It’s a large team of people essentially tasked with driving competition, and driving our market share.The role spans across retail and wholesale operations, brand management for each of the banners, marketing and advertising, and of course responsibility for the teams across grocery, meat, fresh produce and liquor.
FMCG: How did your career take off in New Zealand? RC: I found a role with what was in those days, Eta Foods and then was GM/ marketing director for Allied Foods. After all those years of study and law, my natural instincts as retailer emerged and I joined Woolworths NZ. I loved it. It was subsequently acquired by Progressive in 2002. Shortly after we had a mutual parting of the ways which was perfectly beneficial. As things turned out Foodstuffs was looking for someone to run a project for
FMCG: What was the biggest challenge with implementing Foodstuffs Fresh? RC: We did this by opening an ADC in East Tamaki which eventually became too small but it was very useful from the point of view of obtaining intellectual property and understanding the key drivers in relation to logistics and fresh produce. A purpose-built facility was developed in East Tamaki. The project ran for about a year and half, maybe two at the most. We partnered with a company called Carter & Spencer in
FMCG AUGUST 2010
FMCG: In your opinion, what’s in store for the FMCG industry over the next five years? RC: New Zealand is an incredibly interesting environment. In my view we have world-class supermarkets.The challenge will be to continue to deliver world-class standards, to continue to be relevant, to continue to invest, not only in stores but in systems. Customers and consumers are changing dramatically. We have to reach them in different ways to what we might have done in the past.
Going barefoot in Australia Trade mark usage in the Barefoot dispute. By Matthew Hayes
A recent High Court of Australia decision in favour of E&J Gallo Winery (Gallo) is good news for trade mark owners across the Tasman. Usually, a trade mark can be removed from the trade mark register if it hasn’t been used for three years. For a trade mark owner, it’s basically – use it or lose it. Now the High Court has ruled that a trade mark owner does not need to know whether its goods have been sold on the Australian market to establish its ‘use’ of a trade mark. The Barefoot story. In 2008, Gallo, the world’s second largest wine producer, sued Lion for trade mark infringement because Lion was using the name ‘Barefoot’ for one of its beer brands. Gallo claimed that Lion’s use of Barefoot infringed its Australian trade mark registration for Barefoot, which covered wine. In response, Lion applied to remove Gallo’s BAREFOOT (Barefoot) trade mark on the basis that it had not been used in Australia during the relevant statutory non-use period of three years. Had Gallo used its Barefoot trade mark in Australia? Back in 2005, Gallo acquired full rights to the Barefoot trade mark. However, Gallo had not used its Barefoot trade mark in Australia before the beginning of legal proceedings against Lion in 2008. To save its trade mark from removal through nonuse, Gallo relied on use of the Barefoot trade mark by its previous owner.The previous owner of the Barefoot trade mark had licensed a company he operated with the right to use the Barefoot trade mark. Although the trade mark was registered in Australia, the business was based in the United States. In 2001, bottles of wine bearing the Barefoot trade
Matthew Hayes is a litigation specialist at intellectual property law firm, A J Park. Email: email@example.com.
mark were exported from the United States to a third party in Germany. A year later, an Australian company imported a small number of bottles of wine bearing the Barefoot trade mark from the German company and sold them in Australia during the relevant non-use period. However, the previous owner of the Barefoot trade mark had no knowledge about the sale of that wine in Australia during the relevant non-use period. Enter the High Court of Australia. Rejecting the approach of the full Federal Court, the High Court unanimously stated that the question of whether a registered owner has used its trade mark does not depend on whether the owner knowingly projects the goods into the Australian market. Rather, it depends on whether the goods are in the course of trade in Australia. The Court said that as long as goods sold under the trade mark remain in the course of trade, each sale in Australia constitutes use, for the purposes of the Australian Trade Marks Act 1995. What does this mean? The decision confirms that a foreign trade mark owner, who themselves or via an authorised user, puts their trade mark on goods that are then sold, for example, to a distributor outside of Australia, will be considered to have used their trade mark in Australia if, without their knowledge, the distributor sells those goods into Australia. In doing so, the Australian Courts have recognised that it’s commonplace in international trade for goods to cross national boundaries before their end consumption. What about New Zealand? The Australian High Court’s decision is likely to be viewed favourably by a New Zealand court. We expect that the answer given for New Zealand will be the same. Which means, yes, the owner is likely to be able to rely on sales it didn’t know about to establish use of a trade mark in New Zealand. AUGUST 2010 FMCG
n a rgo n
Trina Snow, executive director, NARGON.
Eftpos – are you ready? Ensure your Eftpos terminal is ready for the Rugby World Cup.
The Rugby World Cup 2011 will be the biggest event ever hosted in New Zealand. Over 71,000 overseas visitors are expected here and they will be spending an estimated $1.25 billion. Some of that will obviously be in supermarkets and grocery stores. Based on what we saw during the FIFA World Cup, big sporting events can boost demand for food and drinks from locals and visitors alike. Even if you work in an area with no World Cup games, even if you are not really a rugby fan and even if your customers do not follow rugby (unlikely but possible), the Rugby World Cup will affect your store. That is because all stores need to ensure their Eftpos terminals are up-to-date or upgraded by 1 June 2011. If this is not done, stores risk being unable to process international cards and could even be kicked off the network. Up to 60,000 terminals around the country may need to be upgraded or replaced. Basically, every terminal has to be checked immediately. New Zealanders are already heavy Eftpos users and, in some stores, 80%-90% of transactions are done by Eftpos. Visitors are also traditionally frequent card users.The loss of this card revenue would be disastrous. In fact, any disruption or delay in a busy year will have a significant effect on a store. This issue cannot be ignored or left to the last minute. Paymark CEO Simon Tong has been quoted as saying “unlike previous upgrade programmes where we have cut some retailers slack in meeting the upgrade dates, this time it’s different. With increasing concerns over card fraud and potential issues with international visitors’ cards, the upgrades simply must happen. Retailers run the very real risk of being disconnected from the network post June 2011.”
BY Trina Snow
The World Cup has provided the impetus for this major upgrade process to the 6.0 software version. Most international tourists use chip cards so it is important that terminals here are compatible and can process all these transactions. Terminals running versions 5.1 and 5.2 simply cannot. The latest software version is more secure, more reliable and reduces the risk of credit card fraud. It provides full support for all modern chip cards, ensures electronic offline voucher capacity and delivers enhanced security for customers and vendors.A full nationwide upgrade will ensure New Zealand meets global security and technology standards. MasterCard and Visa have set new international standards which we simply have to meet. Fortunately, there is a relatively simple way for all retailers to determine what they need to do in order to ensure they can operate properly in 2011. The first step is to check the “Are You Ready” website.Then enter the terminal ID which can be found on your Eftpos receipt. You will then be redirected to your Eftpos network provider where you will find out whether your terminal is ready or not. If your terminal is 5.1 or lower, it has to go and has to go urgently. Contact your provider immediately. If you are signing up to a new lease or buying a new machine, carefully ensure it is the most up-to-date version available. Above all, do it now. Leaving things to the last minute risks losing card-processing capacity and that means losing business. Eftpos, like all technology, has to upgrade periodically. This is a major upgrade and all stores should be taking it very seriously indeed. In this case, there really is no alternative. Finally – go the All Blacks! The Are You Ready website can be found at www.areyouready.co.nz.
FMCG AUGUST 2010
beef & la m b
Best in the world
Tanya Hart is the marketing & public relations manager for Beef + Lamb New Zealand.
To date New Zealand Beef and Lamb doing well. By Tanya Hart
We were really delighted with the launch of our new television advertisement, Farmgirls, back in April. Designed to celebrate the importance of our farmers as caretakers of the land, producing beef and lamb which is ‘Best in the World’, feedback to date has been great. Having our Iron Maidens out on the farm is a natural extension from Beef + Lamb New Zealand’s previous ads which focused on the end product and how to use it. It’s taking our customers back to the fundamental origins from where it all begins – in grasslands New Zealand, with our largest funders, New Zealand farmers. (For those who may not be aware, we are also funded by New Zealand Meat Processors and New Zealand Meat Retailers.) It was a long two days filming the Farmgirls commercial on a farm north of Auckland, but our Iron Maidens seemed to really enjoy the whole experience – despite the finish times which went well into the nights. We were pleased with the clarity of footage and the resulting 45 second, 30 second and 15 second commercials. The 15 second advertisement focuses on a meal at the farmhouse dinner table, rather than out on the farm, and was developed specifically to promote the New Zealand Beef and Lamb Quality Mark at retail level. It emphasises New Zealand beef and lamb as ‘Best in the World’, encouraging consumers to look for the Quality Mark in store, to ensure they are buying product reared and produced to the highest standards in New Zealand. It is timely also to announce,Alison Shanks, 2009 World Champion Pursuit cyclist, as the latest edition to our Beef + Lamb New Zealand dream team. Joining Sarah Walker, Georgina Earl (nee Evers-Swindell), Caroline Meyer (nee Evers-Swindell) and Sarah Ulmer, Alison has become the fifth member of the Iron Maidens stable of champions helping to promote our products. Part of the New Zealand track cycling team for the past four years, Shanks is currently setting her sights on the Commonwealth Games in Delhi later this year. Born and bred in Otago, she still lives and trains in Dunedin,
adding a deep-south element to the Iron Maidens, who are geographically spread across the country. During the past six years in particular, the Iron Maidens have been instrumental in reinforcing the attributes of vitality, energy, iron and good health which beef and lamb have become synonymous with. We are confident Shanks will add another dimension again. She is another typical Kiwi girl who sets her sights high, providing a great role model for all New Zealanders. With ‘best in New Zealand’ in mind, you may be interested to learn that, from almost 100 entries, Hugh and Helen Winder from Feilding won the 2010 Meat & Wool New Zealand Golden Lamb Awards (aka Glammies) with their Fairlea Texels lamb back in March. The Winders beat 15 other finalists to have their lamb declared the most tender and tasty in New Zealand and named the Glammies Grand Champion.Their lamb was processed at the winning plant, Land Meat NZ. The Champion Meat Retailer trophy went to Harmony Foods in Paeroa. In late May, the best steak in the country was announced and came from the Whangarei farm of Kathy Child and Yvonne Hill with their Angus/Limousin Cross steer. Magills Meats of Te Awamutu took the title of retail brand with Hereford Prime, and best wholesale/ foodservice brand was awarded to Chef ’s Choice with their AngusPure entry. Details of all winners, alongside our campaigns, can be found at www.beeflambnz.co.nz.
From left: Iron Maidens – Caroline Meyer, Sarah Walker, Sarah Ulmer, Georgina Earl.
AUGUST 2010 FMCG
The perfect pie As our May issue showed, pies are close to a Kiwi’s heart. There is even a nationwide pie competition celebrating the country’s best pies, the Bakels New Zealand Supreme Pie Awards. In the interests of research, C-Store presents this year’s winners.
The 14th Bakels New Zealand Supreme Pie Awards were held on 27 July in Auckland. Themed ‘great pie moments in film’, the awards had more than enough celebrities on hand, including the likes of Allyson Gofton, Mary Lambie, Maggie Barry, Kevin Black and others. Duncan Loney, CEO of NZ Bakels, told C-Store: “We appreciate them coming along, we have to make it a night to remember.” This year, there were a record 4336
FMCG February 2010
pies from 386 bakeries entered in the Bakels contest. Rotorua baker Pat Lam walked away with the Bakels Supreme Pie Award for his bacon and egg pie, making this his fourth Supreme Pie Award since 2003. He also won a Silver in the Gourmet Fruit category and a Bronze in the Gourmet Meat category. Baking must run in the family. Not only did Lam’s Gold Star Patrick’s Pies Bakery win, brother Lam Ho from Taupo’s Paetiki Bakery was awarded Gold in both the Chicken and Vegetable and Gourmet Meat categories, while brother Mark Lam at Rotorua’s Owhata Lam Pie Bakery won Bronze with his mince and cheese pie. The New Zealand pie market is now worth in excess of $145 million. Loney says: “The awards were a huge success
in terms of entries and in terms of publicity. We are very happy with it. We plan each event right from the debrief, looking at anything we can improve to keep the integrity of the event at the highest level possible.” His advice for future entrants is to “weigh your pies. The reason for limiting the weight is to keep them a fairly uniform size. Get some good, accurate scales and weigh them individually before you send them in.” Loney also has some advice for consumers: “They’re good for everyone, just don’t eat too many all at once.” The 14th Bakels New Zealand Supreme Pie Awards winners
GOURMET FRUIT Gold: Chad Meehan, Kidds Cakes & Bakery, Christchurch Silver: Patrick Lam, Goldstar Patrick’s Pies, Rotorua Bronze: Michael Kloeg, Ten O’Clock Cookie Bakery Café, Masterton Highly Commended: Tony Sea, Goldstar Bakery, Hamilton GOURMET MEAT Gold: Lam Ho, Paetiki Bakery, Taupo Silver: Geemun Chao, Fast & Fresh Bakery Café, Taupo Bronze: Patrick Lam, Goldstar Patrick’s Pies, Rotorua Highly Commended: Mab Chheur, Angkorwat Bakery & Coffee Shop, Waipukurau
Mince & Gravy Gold winner Fiona Doung from Koutu Bakery, Rotorua.
Steak (diced) Vegetables & Gravy Gold winner Geemun Chao, Fast & Fresh Bakery Café, Taupo.
MINCE & GRAVY Gold: Fiona Doung, Koutu Bakery, Rotorua Silver: Kok Lim Ngy, Green Apple Café & Bakery, Albany Bronze: Try Kong, Bakers Oven, Whangaparaoa Highly Commended: Bunnarith Sao, Dairy Flat Bakery, Albany
VEGETARIAN Gold: Bill Lenh Liem, Greenland Café, Pukekohe Silver: Mab Chheur, Angkorwat Bakery & Coffee Shop, Waipukurau Bronze: Ernie & Therese Bailey, Banana Pepper, Waihi Highly Commended: Tan Kiet Trang, Cherrywood Café, Tauranga
STEAK (DICED) VEGETABLES & GRAVY Gold: Geemun Chao, Fast & Fresh Bakery Café, Taupo Silver: Try Kong, Bakers Oven, Whangaparaoa Bronze: Chhai Heng Chrin, Merivale Lunch Bar & Bakery, Tauranga Highly Commended: Chad Meehan, Kidds Cakes & Bakery, Christchurch
BACON & EGG Gold: Patrick Lam, Goldstar Patrick’s Pies, Rotorua Silver: Neville Jackson, Jackson’s Bakery & Café, Havelock North Bronze: Bun Heng Wong, Julia’s Bakery, Albany Highly Commended: Vong Hean, Mairangi Bay Bakery, Mairangi Bay
Gourmet Fruit Gold winner Chad Meehan, Kidds Cakes & Bakery, Christchurch.
MINCE & CHEESE Gold: Geemun Chao, Fast & Fresh Bakery Café, Taupo Silver: Neville Jackson, Jackson’s Bakery & Café, Havelock North Bronze: Mark Lam, Owhata Lam Pie, Rotorua Highly Commended: Patrick Lam, Goldstar Patrick’s Pies, Rotorua
Gourmet Meat Gold winner Lam Ho, Paetiki Bakery, Taupo.
CHICKEN & VEGETABLE Gold: Lam Ho, Paetiki Bakery, Taupo Silver: Liu Chan Kheng, Penny Bakery, Manurewa Bronze: Fiona Doung, Koutu Bakery, Rotorua Highly Commended: Sokunbon Eat, Green Bay Bakery, Auckland
Chicken & Vegetable Gold winner Lam Ho, Paetiki Bakery, Taupo.
AUGUST 2010 FMCG
Vegetarian Gold winner Bill Lenh Liem, Greenland Café, Pukekohe.
Commercial/Wholesale Gold winner Murray Blair Swetman, Gourmet Foods.
Bacon & Egg Gold winner Patrick Lam, Goldstar Patrick’s Pies, Rotorua.
Mince & Cheese Gold winner Geemun Chao, Fast & Fresh Bakery Café, Taupo.
Steak & Cheese Gold winner Bunchoeun Keo, Natural Bake, Auckland.
Seafood Gold winner David Liem, Greenland Bakery & Café, Auckland.
FMCG AUGUST 2010
n Supreme winner Patrick Lam for his Baco
STEAK & CHEESE Gold: Bunchoeun Keo, Natural Bake, Auckland Silver: Ratha Ny, The Bakehouse Café, Opotiki Bronze: David Grans, Grannys Kitchen, Dannevirke Highly Commended: Sumsith Krun, Le Royale Café, Auckland SEAFOOD Gold: David Liem, Greenland Bakery & Café, Auckland Silver: Geemun Chao, Fast & Fresh Bakery Café, Taupo Bronze: Chhai Heng Chrin, Merivale Lunch Bar & Bakery, Tauranga
& Egg pie.
Highly Commended: Shane Kearns, Oslers Bakery Wairoa, Wairoa COMMERCIAL/WHOLESALE Gold: Murray Blair Swetman, Gourmet Foods Silver: Paul Barber, Goodtime Foods, Napier Bronze: Brendan Williams, Marlow Pies, Dunedin Highly Commended: John Newell, Oxford Pies, Hamilton SUPREME Bacon & Egg: Patrick Lam, Goldstar Patrick’s Pies, Rotorua
Ban not the answer The New Zealand Association of Convenience Stores (NZACS) has released the results of a retailer poll showing widespread opposition to a Ministry of Health proposal to ban tobacco products from display in shops. “With over 60% of retailers not agreeing with the display ban proposal the Ministry and Government continues to have a real fight on their hands,” said NZACS chairman Roger Bull. “We have consistently encouraged the Ministry to actively talk with the retail sector instead of thinking up new regulations from Wellington,” said Bull. “This research also showed nearly 65% of retailers have never even seen a Ministry official, yet alone been provided advice from the Ministry on their responsibilities as retailers selling tobacco products.” Retailers are also aware that both Denmark and Sweden have recently rejected a retail display ban alongside reports that the new UK business secretary Vince Cable is looking to overturn the UK’s display ban. “Sweden’s approach of tightening regulations on the sale of tobacco together with stronger enforcement needs serious consideration by the New Zealand Government instead of simplistic display bans which don’t work and
force significant costs onto retailers,” said Bull. “The reality is that the Prime Minister’s comments of June 2009, ‘that there is no international evidence that a display ban actually works and it’s hugely expensive to do it...’ are as relevant today as they were 12 months ago,” he said. l Registrations are now open for the 2010 NZACS Industry Awards Dinner. In addition to an afternoon of networking, highlights for this year’s event include the Peter Jowett Industry Award finals and special guest speaker comedian Steve Wrigley. l
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AUGUST 2010 FMCG
Trina Snow, executive director, Nargon.
All systems go Sort your GST systems now to avoid problems later. By trina snow
In Budget 2010, Finance Minister Bill English officially confirmed that GST would rise from 12.5% to 15% on 1 October 2010.This move was widely expected as the National-led Government had already signalled it was contemplating this increase as early as February. The challenge for all the productive sectors of the economy is to ensure they are fully prepared for this increase. It is worth considering that the last change to the GST rate was a long time ago – 1 July 1989 under a Labour government when it went from 10% to 12.5%. Many will not know or will have forgotten the difficulties some companies had at that time because of a lack of planning and preparation. It is clear that an increase in GST will create compliance costs for all businesses. Every pricing and financial system will have to be checked and, in many cases, modified. This can be both time consuming and expensive. Some staff may need additional training to support the transition to the new rate. The new GST calculation divisor will involve dividing by 7.6 recurring, rather than the current nine, which means there is more chance of errors creeping in. Nargon has recommended that all members should already be working to ensure a smooth transition. We have suggested some practical steps stores can take: Accounting systems: Check whether all internal systems can cope with adding a new GST rate. The current rate will still need to be retained because it will be used up to 1 October. As the rate change will occur part-way through the standard financial year, existing data must not be affected. Some businesses may also need to file two GST returns as a result. Pricing: The impact on profit and pricing points needs to considered for businesses selling on a GST-inclusive
basis. For others, they should review their contracts to see if they can increase pricing to cover the rate rise. Contractual obligations: Review long-term contractual obligations (including supply agreements, voucher systems, GST-inclusive pricing, leases and credit contracts) to check the impact of the change and re-negotiate if necessary. Credit notes and debit notes: These procedures should be reviewed carefully to check they can issue correct tax invoices and notes for both the ‘old’ and ‘new’ GST rates. The GST rate is determined at the date of the original sale or purchase, not billing or payment. Land and property transactions: Ensure all agreements are entered into on a “plus GST” basis so the price can be increased on 1 October. Private purchasers may want to lock GST in at the lower rate. Consumer activity: There is likely to be a spike in purchasing immediately before the increase comes into effect and a small dip immediately after. This happened when the rate last went up in 1989 and has occurred in similar situations overseas. The impact on the grocery retail sector is likely to be relatively small, but stores should look for any opportunities to increase business. Nargon’s advice is unambiguous – check all systems carefully, take professional advice if required and make the changes needed early in order to ensure a seamless transition on 1 October 2010. The situation will be hugely complicated if the Government bows to pressure to make certain items – usually ‘healthy food’ or fresh fruit and vegetables – GST exempt. At this stage, the National-led Government is sticking with a simple, one-tier GST system. Nargon firmly believes this is the best approach going forward and wishes all stores well with their preparations for GST Day – 1 October 2010. For more detailed advice, check out the feature in FMCG’s Grocery Business section on page 44.
FMCG AUGUST 2010
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FMCG February 2010
Earlier this year the New Zealand wine industry was filled with gloom amidst towering tanks filled with millions of litres of surplus sauvignon blanc. Then an unexpected guardian angel arrived who purchased large quantities of otherwise unwanted wines to great relief all around. The angel was Murray River bulk wine trader Warburn Estate, which has made a tidy little business for itself supplying Aussie supermarkets with cheap as chips wines to trade under their own labels. Most of Warburn’s wines hail from the great wellspring of Australian wine, the Murray River Valley on the NSW/Victoria/South Australia border, but as the Murray’s version of sauvignon blanc is unrecognisable as wine, Warburn came, cheque book in hand, to Marlborough. The wee lake of savvie they were in search of was for Woolworths supermarket chain in Australia, as well as Woolworths owned Dan Murphy and BWS stores, and the large quantities they took were shipped in bulk across the Tasman where Warburn bottled them for its clients. Some of these have found their way back across the Tasman to supermarket shelves in Countdown stores. Which raises the question of the degree to which own-brand wines are going to become a feature of New Zealand wine retail. In many ways own-brands have been with us for generations, as wine brands available from various branches of the liquor trade here, before supermarkets became part
of the scenery, were often ‘agency’ lines. Even if they were New Zealand wines they were at least part owned by the distributor/retailers. McWilliams, Corbans and Montana all had significant liquor trade ownership and were promoted enthusiastically through the Lion or DB affiliated outlets that dominated trade here. Big wine companies often made own-brand wines for those liquor giants, such as the famous OPG (Old Pale Gold) Sherry that was the biggest wine brand in the country for many years, made exclusively for the Lion chain in the days when its distribution arm was known as New Zealand Wines and Spirits. So the arrival of Woolworths ownbrand Marlborough Sauvignon Blanc is neither unexpected nor is it unusual. For some years now Australian supermarket chains (dominated by Coles-Myer and Woolworths) have had the lion’s share of the liquor retail trade in Australia, estimated by the Melbourne Age to be 45% of the total market. They have also recently expressed their desire to have own-brands holding a similar share of trade to that claimed by British supermarkets. Currently, British supermarket own-brands have a 41% share of the supermarket wine trade, suggesting that Coles and Woolworths are planning to have 19% of Australia’s total wine trade in their own wine brands. It is logical then for them to source Marlborough Sauvignon Blanc direct, with this wine making up a third of all
make their presence felt By Keith Stewart bottled white wine sold in Australia. Whether this plan extends to New Zealand is yet to be seen, and it is likely to meet stiff opposition from New Zealand’s largest winemakers, who stand to lose market share to own-brand labels. With supermarkets their biggest customers, none of the large wine companies would comment on the future chances of supermarkets encroaching on their market share, nor on their participation in making ownbrand wines for retailers as has been done in the past. The emergence of supermarkets as a major player in the domestic wine market has transformed the wine business into one that is sharply divided between chain retailers (such as supermarkets and liquor stores such as Liquorland and the Mill) on one hand, and fine wine outlets and restaurants on the other. This has put pressure on many producers and retailers who have failed to adjust to the new realities of wine marketing, and has driven some dramatic recent changes in the structure of wine distribution that could have a direct influence on own-label decisions sooner, rather than later. Pernod Ricard’s reduction of its portfolio of wine brands to just those it does own and the recent takeover of Eurowine by the Vintage Wines & Spirits/Foley joint venture mark a significant shift in the landscape of the New Zealand domestic wine market. Fine wine brands such as Te Mata Estate, that have managed to develop strong supermarket trade as
well as maintaining a high quality image and presence in the premium retail and restaurant sectors, will now find themselves pitched alongside aisle end specials such as McGuigan and Passion Pop. They will have Louis Roederer Champagne for company, but whether the new business can serve both sides of the trade with equal skill and enthusiasm remains to be seen. If this is, as some suggest, a return to old-fashioned liberal wine merchant representation, it could become yet another trigger for full-on own label development within supermarkets. Murray Johnston, general manager merchandise, Progressive Enterprises told FMCG, “Given current vintage conditions in both New Zealand and Australia and significant consumer demand for high quality wines at bargain prices the growth of ‘own brand’ wine is expected to continue into the foreseeable future. Over the past year the ‘own brand’ vehicle has proven a winner for vineyards and wineries that need to move volume but do not have the brand equity in
their own labels to do so.” Countdown, Woolworths and Foodtown supermarkets currently deliver a wide range of own-brand wines in New Zealand including Obikwa, Robard & Butler, Cleanskins & Nederburg. While the oversupply pressure in both Australia and New Zealand continues, expect more. l AUGUST 2010 FMCG
Search for beer pourer Bartenders nationwide are gearing up to compete in the Stella Artois Draught Masters competition in a bid to win a spot in the national finals. The regional winners from Wellington, Auckland and Christchurch will compete for the title in the final on September 10. The person crowned the New Zealand Draught Master will then fly to London to represent New Zealand in the 2010 Stella Artois World Draught Masters competition on 24 October. New Zealand has won the World Draught Master title three times in the competition’s 13-year history. In 2002, Simon McGorman became the first New Zealander to ever win the world title, and then in 2007 Erin Carroll became the World Draught Master champion. Christchurch local Avril Maxwell is the newest addition to the line-up having won the world title in New York last year. The timed competition requires contestants to perform a
seven-minute Belgian beer-pouring ritual. The centuriesold pour requires polished expertise in the art of pouring a perfect beer from the tap as well as the bottle, not to mention skill in the art of hospitality and an in-depth knowledge of the history and taste profile of the beer. Contestants’ style and social skills such as spontaneity, eye contact, sociability and serving technique at the table will also be under the judges’ spotlight. The Stella Artois 9-Step Pouring Ritual epitomises the brand’s continual quest for perfection to guarantee that Stella Artois is served with the same care, consideration and craftsmanship that has gone into more than 600 years of brewing. Winners of the World Draught Master title become Stella Artois ambassadors and travel the world to oversee that every chalice of Stella Artois is poured properly and served just right. l
Liquorland International Wine Competition Last month, 17 trophies, plus Champion Wine of the Show and Champion Producer, were announced in Auckland at the 2010 Liquorland International Wine Competition. Of the 17 awards, New Zealand received 12, Australia four and France one. Within the New Zealand count, seven were awarded to Marlborough and one each to Hawke’s Bay, Waiheke, Gisborne, East Coast and Central Otago. Chief judge Mike DeGaris said, “The overall quality of entries was significant and these trophy winners are all outstanding examples.” Liquorland merchandise manager Andrew Bartley says, “This is a very exciting time for Liquorland as the announcement of these results coincides with the launch of our new livery. These significant activities continue to endorse our position of adding value to both our customers and the wine industry.” Champion Wine of the Show was awarded to Villa Maria for its Single Vineyard Keltern Chardonnay 2007; a wine the judges agreed was superb for its seamlessness, balance and flavour profile. With almost 20% of the gold medals as well as four trophies, Champion Producer was also awarded to Villa Maria. Winners: Champion Wine of the Show Villa Maria Single Vineyard Keltern Chardonnay 2007 Champion Producer Villa Maria
FMCG august 2010
Champion Methode Traditionnelle Daniel Le Brun Methode Traditionnelle Brut NV Champion Champagne Duval-Leroy Fleur de Champagne Brut Champion Varietal White Montana Showcase Series Gisborne Arneis 2009 Champion Viognier Vidal East Coast Viognier 2009 Champion Gewurztraminer Johanneshof Marlborough Gewurztraminer 2009 Champion Pinot Gris Ribbonwood Marlborough Pinot Gris 2009 Champion Riesling Sanctuary Marlborough Riesling 2008 Champion Chardonnay Villa Maria Single Vineyard Keltern Chardonnay 2007 Champion Sauvignon Blanc Saint Clair Sauvignon Blanc Pioneer Block 19 Bird Block 2009 Champion Sweet Wine Forrest Botrytised Riesling 2009 Champion Rose Jules Taylor Rose 2009 Champion Varietal Red Weeping Sands Waiheke Island Montepulciano 2009 Champion Merlot Beresford Highwood Merlot 2008 Champion Cabernet Sauvignon Yalumba The Signature Cabernet Sauvignon Shiraz 2005 Champion Pinot Noir Thornbury Central Otago Pinot Noir 2008 Champion Shiraz Wolf Blass Grey Label Shiraz 2008 Champion Fortified DeBortoli Show Liqueur Muscat l
New Zealand white wins at London IWC Hawke’s Bay winery Ngatarawa Wines has taken out the award for Best New Zealand White Wine at the International Wine Challenge (IWC) in London. Alwyn Corban, Ngatarawa’s managing director and chief winemaker, will travel to the awards dinner in London on 7 September to accept the award. The IWC is the largest blind tasting event in the world, with more than 10,000 wines entered this year. All wines entered are tasted, and wines from particular regions are tasted against each other. Gold wines must score more than 95 out of 100 marks, and the trophy stage is the ultimate round when gold medal wines are tasted once more by an elite panel of judges to determine if they are worthy of a trophy in addition to their gold medal. After winning gold in the preliminary rounds where the wines are blind tasted by more than 350 different judges, Ngatarawa’s Alwyn Chardonnay 2007 went on to take out the trophy for Best Hawkes Bay Chardonnay, the trophy for Best New Zealand Chardonnay and for Best New Zealand White Wine. Judges said it was a “full, bold but stylish wine”, which had “silky passionfruit overlaid with a hint of spice and a shortbready, creamy finish”. The wine was “well made and harmonious”. Alwyn Corban said that scooping three trophies, eight medals and two commended awards in this year’s IWC was an, “absolute highlight of our year and also testament to the skill, hard work and perseverance by Ngatarawa’s viticulture and winemaking team. The London IWC result
caps off a great run for Ngatarawa on the awards front.” This year has been a year of achievement for Ngatarawa with the 2007 Alwyn Merlot Cabernet recently winning a gold medal in the influential 2010 Decanter World Wine Awards. This also follows a gold medal for Glazebrook Noble Harvest Riesling 2009 and gold medal and trophy for Farmgate Noble Harvest Riesling 2007 at the Air New Zealand Wine Awards late last year. l
Dry River Wines appoints Negociants New Zealand Martinborough Dry River has changed distributor to Negociants New Zealand (NNZ). Managing director Clive Weston, says: “This is not a volume exercise, it’s about the respectful replacement of tiny quantities of rare soughtafter wines, that verge on the collectable, within New Zealand’s top-tier wines bars and finedining establishments. Prices are unashamedly at the top end for New Zealand wines, but they unquestionably deliver in the glass and have proved their worth to the discerning consumer for a quarter of a century.” l
AUGUST 2010 FMCG
Ross Young, general manager from RWCL, with Patrick Materman, chief winemaker for Brancott Estate, overlooking Brancott Vineyard.
Rugby World Cup wine sponsor Pernod Ricard New Zealand has signed up its new brand, Brancott Estate, as the official wine sponsor of the Rugby World Cup 2011. The new brand is part of Montana’s assault on key export markets. Brancott Estate, named in honour of the Brancott Vineyard where Montana first pioneered New Zealand’s flagship varietal Marlborough Sauvignon Blanc, will become the new name for the Montana brand globally. The Montana name will be retained for the Montana Classics range in New Zealand with Brancott Estate being acknowledged on the label, maintaining the link with the rest of the range. All other premium wines in the current Montana range, such as Montana Reserves, Montana Letter Series or Montana Living Land, will change to the Brancott Estate name from the 2010 vintage. Pernod Ricard New Zealand managing director Fabian Partigliani says Brancott Estate wines will provide a real link back to its Marlborough home, Brancott Vineyard. “The new name Brancott Estate will focus resources and significant long-term investment globally to leverage the power of a single, premium brand of wines for our export markets. Due to the nature of Montana being a much-loved
FMCG august 2010
Kiwi icon, in New Zealand we will have dual brand strategy with Montana Classics by Brancott Estate remaining as the Montana brand. “The sponsorship of this premium global event [Rugby World Cup] provides the perfect platform to drive global awareness of Brancott Estate as a leading New Zealand wine brand, particularly in key markets such as the UK, Australia and, of course, here in New Zealand.” The name change, which will be rolled out systematically globally during September and October 2010, is described as a bold and exciting move for the New Zealand wine industry. New Zealand Winegrowers’ Association CEO Philip Gregan says there is recognition that for New Zealand wines to continue their export-led success, more circuit breakers are required to ensure that New Zealand wines stand out in very competitive markets. “The New Zealand wine industry needs more focused brand investment and this Rugby World Cup 2011 sponsorship demonstrates both strong commitment and leadership by one of our key industry players. It is exactly the kind of investment that the New Zealand wine industry needs to continue to make to uphold its premium price positioning and realise potential in overseas markets.” l
Master’s Collection launches One hundred bottles of limited edition Woodford Reserve Master’s Collection small batch bourbon have been available in New Zealand since 1 August. The Seasoned Oak Finish combines fully-matured Woodford Reserve with barrels crafted from wood that have been exposed to the outdoors for three to five years, creating a delicious, strong bourbon. By comparison, most bourbon barrels are seasoned for three to five months. Brand director for Woodford Reserve, Wayne Rose says the Seasoned Oak Finish has a unique flavour, aroma and
colour produced by having the longest known seasoning in the bourbon industry. “By ‘finish aging’ Woodford Reserve in barrels that have been crafted from oak and seasoned for several years, we have created a bourbon unlike any other in the industry. It is the most robust bourbon we have ever made,” says Rose. Each limited edition bottle of Seasoned Oak Finish is individually hand numbered and presented in a unique bottle inspired by the copper pot stills of the Woodford Reserve Distillery, which dates back to the early 1800s. l
Country Calendar features New Zealand winery The intrepid journey of Hawke’s Bay winery Sacred Hill featured on New Zealand’s television series National Bank Country Calendar on TV One at the end of July. The story begins in the mid 1980s, when the Mason family diversified from sheep and cattle to viticulture, transforming their Dartmoor Valley farmland to newfound wine country. It was a bid to escape tough farming conditions at the time, but the Masons soon learned the rigours of grape producing when the original vineyard was repeatedly wiped out by drought, flood and then Cyclone Bola. Teaming up with friend and winemaker Tony Bish, brothers David and Mark Mason created the Sacred Hill wine label. The name is derived from Puketapu – which means ‘sacred hill’ in Maori – a small village close to the estate. Near on a quarter of a century later, Sacred Hill is one of New Zealand’s most prolific wine producers, with three vineyards in the Hawke’s Bay as well as plantings in other key wine-growing territories, including Marlborough.
National Bank Country Calendar producer Julian O’Brien believes the Sacred Hill story represents a significant era in New Zealand’s farming heritage. “The Sacred Hill story is a family story – of their survival in rural New Zealand during profoundly tough times in the history of New Zealand’s farming community. The new direction they sought signified a new era in provincial New Zealand as winemaking began to explode.” l
AUGUST 2010 FMCG
Bartenders to Japan One talented cocktail creator will find themselves winging their way to the land of sake, shochu and sushi this year, thanks to Beam Global. Entries for the Suntory Cup close on 31 August 2010. Suntory brands include Midori Melon liqueur, Suntory liqueurs, Paraiso Lychee liqueur and Yamazaki Japanese Malt whisky. There will be a final for both islands in the last week of September with the grand nationwide final held early October. The winner will receive a trip to Japan valued at over $10,000 including a visit to the Yamazaki Whisky distillery. Trade marketing manager for Beam Global, Wendy Ballard, says “We’re really excited about being able to offer this great prize. Suntory liqueurs are perfect for warmer weather so hopefully it will get bars thinking about new, exotic, refreshing cocktails in preparation for their summer menus. We’re really looking for balance and unique flavour profiles in the winning cocktail.” The South Island final will be held on 26 September in Christchurch at Bangalore Polo Club and the North Island final on 27 September in Wellington at Hooch. The grand final will be in Auckland on 11 October at Tanuki’s Cave. l
Liquor licence ramifications The Association of Community Retailers says the High Court decision declining the appeal of the Victoria Street Night ’N’ Day against a Christchurch liquor licensing authority decision not to renew the shop’s liquor licence could have ramifications for small, family-owned diaries and convenience stores, especially those in rural areas. ACR alcohol spokesperson Dipal Desai says the High Court decision is likely to come as a blow to small retailers. “Family-owned retailers around the country are likely to be adversely affected by this decision,” she says. “Retailers need consistency and other licensing agencies around New Zealand have been generally implementing the Sale of Liquor Act in that manner, with the exception of the Canterbury region. “The problem now is that the High Court decision could result in liquor licensing authorities around the country refusing to renew licences for small retailers, dairies and convenience stores. “Whereas in the past there have been no problems with licence renewals, that may no longer be the case. We are very concerned about how this might affect retailers who are serving their communities in small townships and rural areas,” Desai said.
FMCG august 2010
“It is important that licensing officers’ individual views on alcohol are taken out of the equation when approving or renewing licences. For retailers to run their businesses there needs to be consistency across the board,” she said. The ACR acknowledges that the Government is currently looking at alcohol legislation, however it needs to understand that small, community retailers don’t sell huge amounts of beer and wine. Rather it is about offering the convenience so consumers can buy a bottle of wine or a six-pack of beer. “People don’t go to a convenience store to buy a lot of alcohol – they’ll go to a bottle store for that. Small retailers offer convenience to consumers and the High Court decision could be a blow to small retailers around New Zealand who offer beer and wine to their customers,” Desai said. “We understand the law surrounding sale of liquor licences only to grocery stores, but small convenience shops, some in rural areas, are at a disadvantage. The retailing environment has changed hugely in the last 20 years and consumers buying habits have evolved where smaller, convenience stores play a greater role in consuming buying,” she said. l
talks to Kim Crawford By Keith Stewart
Winemaker Kim Crawford is a master of big brand production and with his wife Erica makes up one of the most formidable teams in the New Zealand wine industry. Now free again after working out the contracts with Constellation following that company’s purchase of the Kim Crawford brand, Kim was the obvious person to talk to about the sudden arrival of serious own-brand competition in the wine sector.
CRAWFORD Own labels here have mostly been produced for supermarkets and other retail chains by the big companies. The threat here is to those big companies which could lose that business and at the same time find their own brands under threat.
BWS Earlier this year, Woolworths Australia arrived in Marlborough, scooping up a vast quantity of bulk wine and pushing up the price of sauvignon blanc almost overnight. Now some of those wines that were shipped in bulk to Australia are back here as Countdown-own brands. What is the impact on local producers?
CRAWFORD. I don’t see any problem here. Making sauvignon blanc is not really rocket science, and it is mostly sauvignon blanc they want. Entry to the market is easy, even if you want volume. The contract processors of Marlborough have the capacity and the expertise to supply what is needed, without supermarkets having to invest in their own plant or grape supply. There are plenty of growers without contracts looking to sell their fruit. And there are winemaking facilities that can handle their requirements, whether it is in bulk, or bottled and packaged ready for sale.
CRAWFORD Bloody relieved was the first response, I’d say. BWS But what influence is this development likely to have on the local market?
BWS Does New Zealand have the infrastructure to be able to keep up ongoing supplies for large supermarket chains here and abroad?
BWS What is the state of the ownlabel trade in New Zealand right now? CRAWFORD We are well behind the United Kingdom where own labels make up almost half the wine business. Australia wants to grow its own-label business to that stage, but there is not much sign of it here yet. As long as the big companies are prepared to let their strong brands sell for low prices in supermarket deals, there is not too much incentive for supermarkets to push own brands hard. BWS Is there likely to be a downstream influence on prices for winegrowers if this takes off? CRAWFORD Winegrowers returns five years ago were around 20%, which is pretty good for farming. Now they are back at around 4%-5%, which is what dairy farmers are getting, so it’s still pretty good. The wine supply market this year has had a lot of own-brand activity, and the current returns for growers are okay. I can’t see much out there that will change that in the next few years. l AUGUST 2010 FMCG
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TA ST E A N D F L AV O U R The first Enza Taste and Flavour luncheon last month saw chef Peter Brennan of Porcini’s Restaurant whippin g up a tasting menu at the Nos h show kitchen in Mt Eden. Enza’s pear and apple varietie s – Taylor’s Gold pears, Pacific Rose, Jazz apples and the new Envy apple – were used to great effect and supported by premium New Zealand food brands Kapiti Cheese, Waiwer a Water and First Light Foods.
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