Katherine Rich: Taking it to the Aussies
There’s nothing Kiwis enjoy more than a bit of healthy trans-Tasman rivalry, whether it’s on the sports field or off it. So when the Food & Grocery Council picked Melbourne – that most sporting of Australian cities – as the venue for its 2012 annual conference, we knew there might be some interesting outcomes.
We also knew it would be a popular destination for members of the food and grocery industry because it was also a chance to call on important clients. And so it proved, with some 300 people attending, a figure which I believe is the most ever. Perhaps the attraction was the star-studded line-up of speakers, or maybe it was the desire to glean as much information as possible in an environment where the over-the-teacups conversations – where companies share ideas, build networks, and talk about problems – are just as useful in these tough times as the goings-on in the conference hall.
There was certainly plenty to be gained from the official part of conference, with presentations from techno-guru Cabinet Minister Maurice Williamson, Australian ‘brand ambassador’ Deborah Hutton, and a captivating interview by Ian Fraser of Kiwi comedy legend John Clarke. Interspersed were sessions by business journalist Bernard Hickey (an economic outlook update and the new ‘austerity’ normal’), Rob Clark (Nielsen’s latest no-surprises Retail Barometer), Corporate Anthropologist Michael Henderson (business culture in tough times), Jeremy O’Brien, TVNZ’s head of sales (new advertising strategies), and Dan Gregory of the Impossible Institute (the power of big ideas). Surely enough to make those who weren’t there wish they were.
Down at the nitty-gritty end there was the launch of FGC’s new programme which is designed to help reduce barriers so members can reach export markets. Trade & Enterprise’s regional director of Australia Pacific, Michelle Templar, told the conference that exporters couldn't just turn up in Australia and expect sales growth – they had to add value to their goods. Tim Morris of Coriolis gave us a fascinating preview of his latest research which, among other things, identified a handful of areas which he called New Zealand’s “next wine industry” (ie the sector with the best chance of big exports): salmon, honey, spirits, biscuits, pet food, cherries – and identified the first three as the top ones to be in, either as an owner or an investor.
Foodstuffs (Steven Anderson) and Countdown (Dave Chambers and Murray Johnston) gave their annual updates which were well received, but it was Allister Watson, general manager of meat, dairy and deli for Aussie supermarket chain Coles, who threw the cat into the fresh chicken chiller by saying there was no chance of Kiwi producers attracting his buyers unless they had goods that were different to what the Aussies produced, otherwise "you may as well stay at home”. The ex-pat New Zealander said Australian consumers wanted locally-made products ahead of all else, but conceded there was a lack of innovation in many Australian categories and “much more innovation” in New Zealand, and "if you have something new and unique, something compelling, then certainly we're all ears." Sounds like a decent sort of challenge. However, when asked from the floor about Coles buying New Zealand apples – perhaps for the enjoyment of more than 500,000 ex-pat Kiwis keen for a decent apple – he kicked into touch on the full with an “apples aren’t in my area”, for which he received a yellow card by acclimation.
So what messages came out of the conference?
Well, there are general concerns at the flatness of the economy in terms of sales, with very few categories having seen growth in the past 12 months, and the consensus is that this will continue for some time. There was a lot of discussion about discounting and the new normal for consumers – that many buy only on promotions. As one speaker pointed out, nearly 60% of all goods purchased in supermarkets are on promotion, so consumers are now waiting until they are on special, as opposed to a natural cycle.
For me, the conference proved once again that relationships between New Zealand suppliers and retailers are more positive and collegial than they are in most other countries.
And let’s not forget that challenge of how to break into the Aussie market. If my experience of the trans-Tasman condition is anything to go by, that is something Kiwis will rise to.
Perhaps John Clarke’s attitude sums up the approach needed. When asked by Ian Fraser if, based on Clarke’s huge success on both sides of the Tasman, a merger between Australia and New Zealand was likely, he leaned back in his armchair:
“No, I don’t think it is. I think there’s an enormous closeness, and I think the closeness is never more obvious than when they’re jointly threatened by a third party. But more, I think New Zealand’s always had an idea of its own independence. I think of myself as a New Zealander who lives in Australia, and I’m an Australian as well, and I don’t see much difference really. But I think, because of the history, it’s now becoming a real idea in the New Zealand mind that New Zealand is genuinely separate, despite the obvious fact of trans-nationality and in all sorts of other areas, obviously, and particularly commerce, which has always been the case. But it’s never been the case to the extent it now is – ever – and I think that will increase. But I don’t know that New Zealand would want to be an Australian state.”
Fraser: “I think there’s a lot of fear among New Zealanders that if it happens it won’t actually be a merger, it will be a takeover.”
Clarke: “I see. Has New Zealand got the people to run Australia?”