Loading ...Peter Kerr at sticK (science, technology, innovation & commercialisation Knowledge) blog has written a article about our recently released Nutraceuticals sector report, done as part of the Government’s Food & Beverage Information Project.
“This paper hovers between information and knowledge, with enough observations and learnings thrown in that it immediately is (partly in the absence of anything else) THE go to document for the whole area.”
According to an article published in this week’s New Zealand Farmer Weekly, Tim Ritchie, the Chief Executive of the New Zealand Meat Industry Association, thinks we’re not up to date.
“The recent Coriolis report on the meat industry suffers in comparison with the Red Meat Sector Strategy (RMSS), said Meat Industry Association chief executive Tim Ritchie. The RMSS reflected time spent in “internal discussion” with players in the industry and has been broadly accepted and adopted, whereas Coriolis engaged in “desk research” and was not up to date.”
The $400,000 Deloitte Red Meat Sector Strategy is available here.
Coriolis’ $20,000 Food & Beverage Information Project Sector Stream Meat is available here.
Compare them yourself and decide. As they say, “your mileage may vary.”
Today’s New Zealand Farmers Weekly has an article outlining some of the potential strategic directions we outline for the New Zealand meat industry in our meat sector report completed as part of the Government’s Food & Beverage Information Project.
Reporter Esther Goh of Idealog writes an article titled “Add value to lift profit, food industry told” about the just released Food and Beverage Information Project…
“Kiwi food and beverage exporters need to focus on adding value if the sector is to live up to its full growth potential, an industry report released today shows.”
After eight months of work, we are very pleased that our reports for the Government’s Food & Beverge Information Project are available here. Click on the diagram at the bottom of the page to get each of the 10 reports in Adobe pdf format.
“Economic Development Minister David Carter today launched the Food and Beverage Information Project, the most comprehensive analysis of New Zealand’s F&B industry ever undertaken.
“The food and beverage industry accounts for more than half of our total exports and employs one in five New Zealanders, directly or indirectly. Full knowledge of the industry and its performance internationally is key to lifting export growth,” says Mr Carter.
The reports released today cover beverages, processed foods, meat, dairy, produce, seafood and nutraceuticals and foods for health. Further reports analyse global markets, provide an industry guide for investors and look in-depth at the Singapore market.”
Visitors to the NZ Food Innovation Showcase at the Viaduct Events Centre were given a sneak preview of the “Investor’s Guide to the New Zealand Food & Beverage Industry.” Pages from this upcoming report – part of the Food & Beverage Information Project – were projected on huge screens for visitors to the Rugby World Cup.
The Press published an article on Store Wars:
“With their bright lights, attractive displays, huge free car parks and smiling staff, supermarkets are welcoming places. But, don’t be deceived: underneath, they are brutal warriors locked in a desperate capitalist war…
Analyst Tim Morris, of Auckland’s Coriolis Research, last year suggested that, to date, “they’ve had their head handed to them on a plate”.
Morris says we should forget the fact that Foodstuffs is a local owners’ co-operative.
This doesn’t make it weak or sluggish in its responses. “Co- operatives are a hugely successful concept.” Foodstuffs has been more than holding its own in terms of market share, says Morris, but it may also be taking time for Woolworths’ momentum to build.”
Today’s Herald has an article that quotes Coriolis’ Tim Morris:
“The value of two top brands has been tested in New Zealand recently – the international brand adidas and one of NZ’s best-known companies, Telecom…
Another local name did well out of the adidas fiasco – Rod Duke, owner of the Rebel Sports chain, thanks to his very public protest about the cost of the All Black jersey, says Tim Morris of the consultancy Coriolis Research. Duke discounted the jerseys in Rebel Sports stores to show his empathy for customers.
In doing so, Duke emulated similar French and British retail marketing campaigns, pointing out to the general public that that they were being ripped off, says Morris.”
The Dominion Post reports:
“Shoppers are the big winners as a lingering “full-price phobia” forces retailers to slash prices – just to get customers in the door…
Coriolis retail analyst Tim Morris says New Zealand has traditionally had a sales culture – partly because its size makes it harder for retailers to get the right mix of stock and clear it.
That has been exacerbated as retail spending has plunged and as more retailers move to a high-low model that sees them swing between “high” and low prices rather than consistently selling “everyday” to low prices.
He cautions consumers to take claims of great discounts with a grain of salt. ”There’s an element of theatre to this. New Zealand is a small market and if you import widgets into New Zealand you set the price and then lo and behold you can have a 50 per cent off sale.”
The Sunday Herald gives an excellent demonstration of how not to do statistics, though perhaps how to do tabloid journalism.
A German journalist sampled 6 items out of the 15,000+ in a high end New Zealand supermarket (Foodtown). The prices of these six items were then compared with, among others, a discount hypermarket in Germany (Kaufland) [similar to Pak'N Save].
A quick calculation on the online Creative Research Systems sample size calculator shows that at 99% confidence level a sample size of 6 for a population of 15,000 and a 66% (4/6 German prices lower) percentage has a margin of error of 50%! (i.e. it is indistinguishable from random chance). This is before any potential statistical bias in the selection of the items or the stores.
Coriolis’ own Tim Morris was quoted in the article:
“He was backed by a retail analyst at market research firm Coriolis, Tim Morris, who didn’t accept the statistical validity of the comparison. “It’s like picking six people in downtown Auckland, finding three are gay and saying there’s more gay people in Auckland than in San Francisco.” He said Kiwi supermarkets were not excessively profitable compared to the top 20 chains around the world.”
Tim comments that he said a lot more that didn’t get quoted…
TVNZ quotes Coriolis’ Tim Morris:
“There is reassurance today for biscuit lovers after the suggestion that Griffin’s is about to be sold. The company, which produces such favourites as Chocolate Chippies, Toffee Pops and Gingernuts, has appointed two banks to conduct a strategic review…
Retail analyst Tim Morris from Coriolis Research says if Australian-based Pacific Equity Partners does sell the company, Griffin’s biscuits will still be on New Zealand supermarket shelves.
“The rule with private equity funds is that of any three deals they enter one will crash and burn, on one they’ll get their money back and on one they’ll do really well,” Morris told Fairfax.
“Griffin’s isn’t a crash and burn – they’ll at least get their money back and they’ll probably do reasonably well.”
One possible buyer of Griffin’s is Nabisco, which is part of global snack and confectionery company Kraft.”
Everyone’s favourite, The Nelson Mail quotes Coriolis’ Tim Morris on the potential Griffins sale:
“There are a number of potential buyers for Kiwi biscuit-maker Griffin’s, an analyst says. The company is being lined up for potential sale by its Australian-based private equity owners, with sources confirming the company has appointed two banks to conduct a “strategic review”…
Retail analyst Tim Morris of Coriolis Research said other potential buyers in the market included Goodman Fielder or other private equity funds. He said Campbell’s soup company would not be in the running because it already sold the competing Arnott’s biscuit range in New Zealand. Kraft had also recently made a massive purchase of Cadbury which might rule it out, said Morris.”
Coriolis’ Research Director Virginia Wilkinson is quoted in a Dominion Post story on energy drinks:
“Kiwis guzzled down roughly half a billion litres of non-alcoholic bottled cold drinks last year, making more than $120 million in pre-tax profit for soft drink giants Frucor and Coca-Cola Amatil. Our thirst for soft drinks is big and so are the profits, but the industry has been marked by slowing growth…
Virginia Wilkinson, research director at Auckland’s Coriolis Research, says the popularity of energy drinks – which have a fervent youth following – is also down to magic marketing.
Caffeine and youth culture have not always gone hand in hand, but manufacturers have created a demand, she says.
“Energy drinks are cool and they’ve got cool names like `Mother’ and have skulls and cross bones on them. It’s brilliant marketing. Kids just love that idea of getting that additional rush that keeps you up late and helps you study at night and go out partying. ”People are also trying to fit more into their day.” She believes the market for energy drinks is still growing but “probably” starting to lose some of its kick as it matures.
Voxy quotes Coriolis:
“Minister of Agriculture, Hon David Carter, turned the first sod this afternoon at the Waikato Innovation Park in preparation for constructing New Zealand’s first and only independent product development spray dryer. Construction of the $11 million spray dryer facility will commence later this month. It will open in May 2012 and is the third building on the 17-hectare campus of the Waikato Innovation Park in Hamilton, New Zealand…
Tim Morris, Director of Coriolis Limited, has done extensive research into the opportunities for New Zealand dairy companies to move into infant formula production. He says the sector is missing out on a huge opportunity.
“The baby food/infant nutrition market worldwide is achieving strong growth driven by increasing demand, particularly in the Asia Pacific region. In this region alone, sales of infant formula have grown 15% per year for the last five years.
“What might be surprising to some is that most infant formulas sold in the Asia Pacific region contain New Zealand milk powder. But, sadly, it’s the formula manufacturers who are capturing most of the value of our milk. Infant formula delivered to the back door of a supermarket is worth ten times as much as our milk powder exports at the border.
“We blither on incessantly about the need to add value to our exports. Infant formula is a clear, no-brainer opportunity to add value. Waikato Innovation Park’s new facility is a great step on the path to realising this opportunity,” explains Mr Morris.”
AP-Foodtechnology quotes from Coriolis:
The incoming chief of Australian supermarket giant Woolworths Ltd has said that the chain will welcome food products out of New Zealand on its shelves, despite its policy of buying local first…
According to Coriolis Research, the export of processed foods from New Zealand to Australia grew on an annual rate of 14 per cent in the ten-year period between 1999 and 2009, as against 10 per cent between 1989 and 1999. The value of these exports at the end of 2009 also reached a high of approximately US$800 m, with products like fish nuggets, baby food, marmite, muffin cakes, spaghetti, peanut butter and beef jerky.
A story in today’s New Zealand Herald quotes from recent Coriolis research:
“Australian supermarket giant Woolworths is open to stocking more Kiwi-made products on its shelves across the Tasman – despite its policy of buying products locally whenever possible, says the company’s soon-to-be boss…
New Zealand exported $877 million worth of processed food products to Australia in 2009, excluding wine, according to the Ministry for Economic Development.
A report commissioned by the ministry last year said there were “major opportunities” for local food manufacturers across the Tasman, and that Australia could be used as a “stepping stone” to markets further afield. ”It is our closest market, culturally similar but with 22.5 million people, and of course low [trade] barriers,” said former Minister for Economic Development, Gerry Brownlee, at the time of the report’s release.”
Today’s Dominion Post discusses store brands and quotes Coriolis’s Tim Morris.
“Grab a shopping trolley, wheel it around your local supermarket, and have a look at how many private label goods now fill the shelves. Also known as “own”, “store”, and “retailers”‘ brands, private labels compete for attention among something like 30,000 brands at any one of our average-sized supermarkets…
Retail analyst Tim Morris, of Auckland’s Coriolis Research, said shoppers were creatures of habit, nowhere more so than on food. “They push their shopping trolley around the supermarket in a bit of a daze, they’ve got to buy hundreds of different items, they are low commitment,” he said.
Some favoured one brand, others just grabbed something that was on special. “They’re relatively like advanced robots. They’re not going through the stores as a scientist would examining each product, they’re trying to rapidly get through and go on with their life – things are occurring on auto pilot.
“The whole advertising industry is built on this idea of selling the sizzle, not the steak. We all understand the game. That’s what it is.”
Industry consolidation has changed the amount of shopper choice in label brands.
The major brand players are rallying around fewer, bigger brands, eliminating the smaller ones. “Companies like Procter & Gamble used to have 20 or 30 different detergent brands and they [whittled] those down to a handful. All the major players are doing that,” Mr Morris said. But he believed there were limits to how much market share private labels could attain.
“In the UK clearly the retailers went too far. It was over 50 per cent more than 10 years ago, that came backwards. People actually got a bit turned off by it. Within that there were categories that were 80 per cent and there were categories that were 5 per cent.”
CONSUMERS were slow to change their shopping behaviours, Mr Morris said. Coles in Australia thought it would attain 30 per cent saturation for private labels within three years from the existing 12 per cent or so, but failed to do so, he said. ”People are not going to change the contents of a third of their shopping trolley in three years, no matter what you do.”
From The Dominion Post:
… Coriolis Research retail analyst Tim Morris, who was called as an expert witness in the Victoria Night ‘n Day case, describes the current legal distinction between a dairy and a grocery store as archaic and bizarre. “If you said, ‘where’s the nearest grocer?’, people would look at you funny.”
He says New Zealand’s small-format stores dairies, grocers, tobacconists and confectioners began closing, merging and reinventing themselves after the first supermarkets opened in the late 1960s. By the 1980s, the transition to a supermarket culture was complete. “At some point in New Zealand, there clearly was such thing as a dairy that wasn’t a grocery store, but it doesn’t exist anymore.”
Morris believes the corner dairy will survive. His analysis shows the number has actually increased in the past decade.
Some closures can be attributed to changing demographics. While some suburban dairies have closed, convenience stores have opened in areas of population growth. “There’s a lot of people now living in apartments and not enough stores to serve them.”
From Business Day:
DIY is in danger as high incomes and lack of skills turn new generations off power tools. The alarming prediction comes from John Hartmann, who moved from the world’s biggest home improvement retailer Home Depot in the United States 14 months ago to become CEO of Mitre10 in New Zealand. “Over the last 10 to 15 years we’ve been seeing some [demographic] shifts … this is very relevant to both countries,” he told a national retailers conference in Auckland this week…
Tim Morris, director of strategic management and market research firm Coriolis agrees. “I think New Zealanders would be historically overweighted towards DIY in terms of a mentality, coming out of number 8 wire, being in the middle of nowhere, being on a farm,” he said. “But as you become more urban, certainly look towards the Singapores and the Hong Kongs, even the Los Angeles’ and New Yorks, people don’t do DIY. You’ve got to have a minimum critical level of skill.”
As a consequence, the likes of Mitre10 and Bunnings were modifying their behaviours, changing their mix. “There’s a noticable trend in the space to more consumer products, there are more toasters, there are more dishwashers,” said Morris. “They’re targetting both the tradesmen who are coming in there and also the punter who’s a little bit too scared to replace their own toilet but who might just buy a toaster or hammer or something.”
From everybody’s favourite newspsper, the Timaru Herald:
New Zealand’s two major supermarket chains are unlikely to be following their Australian counterparts in a “price war” over milk and other items…
Consultant Tim Morris, of Coriolis, said New Zealand supermarkets did not make excessive profits by global standards. ”But more importantly, whenever you see these so-called price wars over very specific items, you can bet they are moving the prices up for others,” he said. ”It is slightly more complex than most would like to depict it.”
Coles has claimed its slashing of poultry prices and milk would “save Australian customers up to as much as $55 a week, or $2860 a year”, but Mr Morris said those claims were often “fancy ways of lying with numbers”.
“It is assuming the savings you make on particular items. You may have nominally saved on say, your milk, or mince, but you might not notice other prices have shifted,” he said. ”But if a company makes a lot of noise about reducing the cost of one particular item it is a good way to get publicity.”
Tim comments: (1) As a simple thought model, if the average shopping cart contains 50 items, the retailer can reduce the price of any one item by 50 cents, while increasing the price of all other items by 1 cent. (2) I wouldn’t call a milk price war unlikely, particularly with the Commerce Commission making noise. We could easily see some theatre to no net gain to the consumer.
