I’ve spent the last couple of weeks in planning sessions with several grocery clients in Australia and New Zealand. These clients are manufacturers and retailers alike, so we’ve been looking at growing both branded and retailer own-branded product.
Oh, and I’ve also spent time with two friends who I mentor. One mentee is looking at their retail operations structure before they go on maternity leave, and the other I’m helping to sell their coffee shop so they can focus on starting a family. Both are in their late 20s, have built from scratch what are now successful retail businesses and are starting families.
But, despite these highlights, it was an independent food company planning session in Auckland that really surprised me. Food companies around the world are experiencing pain, and have been for some time. Pricing pressure, shrinking space at shelf level in store, the rise of competition from new entrants and from the growth in retail own-brand share has thrown up considerable challenges for any brand in the food sector.
So, it was a real pleasure to spend half a day with a successful Kiwi couple who has built a strong and growing food company. They’ve grown through building and investing in their own brands, while building and supporting retailers’ own-brand products. This two-pronged and parallel brand strategy has seen them grow to almost 50% share of the categories in which they operate.
They employ young marketers who in their mid-20s have broadly experienced and contributed to commercial marketing, while building a business bigger than they would have been able to within in a major corporate packaged goods company.
The brands they have built and products they have formulated for retailers have grown via innovation, great marketing and investment in production capacity.
I’ll just remind you again that the food part of the grocery sector is hard work. The manufacturing sector in its own right is also hard work. So what on earth possesses two ex-corporate sales and marketing execs with two young kids to risk it all by setting up a new business that combines these: grocery and manufacturing? I’m not sure, but I do know they are growing, and I believe that they will grow from zero to a $50 million business within 10 years.
As we exit the global downturn there are new companies that have been built and hardened in the fires of recession, downturn and systemic change. They have learnt business at the school of hard knocks and will be more resilient, more conscious of value and cost, and will be entrepreneurial as a result.
Having built and sold a business through challenging times, meeting with the Kiwi couple also generated two strong feelings in me: huge respect for what they are doing, and a sense of envy that they are on that rewarding, and amazingly scary, journey of building their own business.
As CROSSMARK CEO, Kevin Moore looks at the world of retailing from grocery to pharmacy, bottle shops to car dealers, corner store to department stores. In this insightful blog, Kevin covers retail news, ideas, companies and emerging opportunities in Australia and across the world. His international career in sales and marketing has seen him responsible for businesses in over 40 countries, which has earned him grey hair and a wealth of expertise in international retailers and brands.
CROSSMARK Asia Pacific is Australasia’s largest provider of retail marketing services, consulting to and servicing some of Australasia’s biggest retailers and manufacturers.