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Australia: end the price war and grow together, says researcher

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Australia: end the price war and grow together, says researcher

A market researcher has called on Australia’s major supermarket chains Woolworths and Coles to end the price wars and put a greater focus on promoting fruit and vegetable consumption.

Speaking at Fresh Connections 2011 in Brisbane, Nielsen Australia associate director Yahya Kanj urged retailers to ‘grow the pie together’ despite the battle to win customer share.

Nielsen Australia associate director Yahya Kanj

Kanj highlighted while it’s important to target groups with unhealthy diets, retailers must also play to their strengths and target groups that are spending more on fresh produce, such as singles and couples.

“We don’t target the customers anymore, they target us,” he said.

Studies have shown Australian consumers are not consuming enough dried fruits and nuts, but Kanj said the situation has been a bit better for other fruits.

“Staples like apples, pears, citrus and berries over the years have had a better run.”

Freshlogic director Martin Kneebone put the fresh produce consumption lag down to a bad case of misinformation, listing terms such as ‘organic’, ‘free range’ and ‘locally grown’ as the main causes.

He said the variety of choices had confused customers, but retailing approaches could be simplified with options including smaller portion sizes, online shopping, meal planners, shopping list generators and less waste.

Kneebone said more consumers were eating out and retailers needed to monitor the trend to work out their marketing strategies.

“The spend on those breakfast, lunch, dinner occasions out of home is about 25%, and in late 2008 it was about 28.5%,” he said.

“The wealthier young singles will be spending 45 % of their food expenditure out of home, the empty nesters 20%.”

Woolworths managing director Greg Foran said the company was using different tactics to entice customers into the fresh produce section on a more regular basis.

“Produce needs to be tactile, colorful, impactful and appealing. And our stores are designed entirely around that fresh food offer, we want it to feel like a modern day market place – a degree of organized chaos,” he said.

“The in-store experience is vitally important when it comes to produce, how it’s presented, how it’s merchandised, is critical.”

SPAR Australia managing director Lou Jardin discussed visions of fresh produce taking up 50% of supermarkets, with more opportunities for ‘fresh’ over ‘packaged’.

“Part of it is a social responsibility, in terms of what you can give back to the community.”

The conference also touched on government level industry initiatives, with Federal Minister for Agriculture, Fisheries and Forestry Joe Ludwig raising the issues of the recent crippling summer season and bio-security procedures.

Federal Minister for Agriculture, Fisheries and Forestry Joe Ludwig

He cited the recovery of the Rocklea Fresh Produce Markets as an example of the industry’s resilience, while also discussing how the biosecurity system currently under development would have more focus on post-entry and pre-entry.

“The current system has a bias just to the border itself, but many risks can be mitigated by additional efforts offshore thereby reducing the occurrence.”

He said the entire system was in a process of reform to update the Quarantine Act 1908.

But the event was not only about Australian industry. HortNZ chief executive Peter Silcock told there was a delegation of around 80 registered New Zealanders in attendance.

"There was quite a focus on how the industry can increase consumption in Australia and New Zealand, with a lot of discussion around taste and how we can get a bit of excitement back into consumers and build customer confidence as well," he said.

"There’s a lot more companies operating trans-Tasman now - there’s some really good innovation happening in both countries and we can act together to reach these markets. I mean, we both grow apples - there’s a lot of synergy, as we grow kiwifruit and they don’t so much, while they grow a lot of fruit that we don’t.

"With collaboration we can compete more effectively, and the Blueberries from the South campaign from South America with Chile, Argentina and Uruguay is a good example of that sort of thing."

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See our photo gallery from the event here.

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