FreshIncite August 2016

What We’re Seeing

Online Food & Grocery sales to $3.6B Top

online_food_ordering_3.png Recent estimates place online food & grocery sales at $3.6B or 17.9% of the total Australian online sales. This now equates to 3.8% share of the $95B Australian market and supports forecasts that the online sales of Australian online food & grocery could continue to lift to the 7-8% market share levels, currently held in UK & US markets. 

This volume is now generating the equivalent retail sales of 110 full service Australian supermarkets. While the major supermarkets are the dominant participants in this channel, it represents increasing challenges for the performance of their retail stores.

FreshIncite: If online food & grocery sales in Australia lift to the 7% market share level of US & UK, they will capture the sales equivalent of over 200 full service supermarkets.

Pokémon Go is drawing consumers to locationsTop

pokemon_go_challenge1.jpg Pokémon Go is a relatively new and hugely popular smartphone application that uses the Pokémon game to encourage users to walk to different real world locations and catch Pokémon. Since the apps launch on July 6th this year, it has generated an estimated $160 Million in revenue and the commercial applications of the app are still yet to be utilized. 

There has been recent speculation that McDonalds is partnering with the application and given the astronomical rise of the app, it’s not hard to see why.

The app works by using digital location services via google maps encouraging the users to walk, drive, or transport their way to different areas and locations to play the game. If a foodservice enterprise or a retailer were to link their presence into these digital settings and this game, they open the potential to influence directing consumers.

FreshIncite: The Pokémon Go application is directing people to locations, which is essentially what all retailers are seeking to do.

The Food Consumer

Grapes & mangoes exports lift to reshape local marketTop

export_final_-_3.png Australian table grapes have recorded their best season yet by exporting over 100,000 tonnes for the 2015-16 year and the local market prices have responded to the stronger export demand. The domestic grape market now generates over $320m in retail sales but supply to this market now needs to compete with export demand.   

The Australian mango industry is also set to increase their export output this year, as more and more northern territory businesses commit to exporting the fruit to the US. Both these categories have historically had to manage supply pressure from heavy flushes at their seasonal peaks. As export volumes increase these peaks of local market supply pressure are easing and as a flow on are positively impacting the value of all fresh fruit that's sold at these times.  

FreshIncites: Fresh fruit exports are setting new records and growth targets and this success continues to reshape the domestic market.

Nutribix launch their new coconut and crispy rice breakfast biscuit Top

ecofriendly_pack.png Nutribrex has launched a new breakfast biscuit that can be consumed in two quite different ways. This product can be consumed with milk as a conventional cereal meal and also can be eaten on the run as a healthy snack.

Conventional marketing espouses the value of clear and targeted positioning, but this product challenges that approach to provide value and convenience in servicing two meal occasions.   

The product is gluten free and the launch of the new 24 pack wholegrain breakfast biscuit flavour coincides with a rebranding from Nutribrix to Nutri-brex, indicating a stronger focus on the breakfast meal occasion.

The product will be sold at a premium price of £3.79 per 24 pack at UK supermarkets Waitrose, Tesco, Asda and online through Ocado. 

FreshIncite: Is there potential for a breakfast biscuit cereal to cater for two meal occasions including the growing snack food market?

Retail

Eco-friendly packaging that signals product qualityTop

eco_friendly_-_final_3.jpeg.jpg Eco-friendly packaging is being linked with higher product quality according to a recent study in Food Quality by Elsevier Ltd. The findings have asserted that consumers are associating positive attributes to food products in eco-friendly packaging when compared to similar products in conventional packaging.

India’s largest global flexible packaging company Uflex is launching a new type of packaging for fresh produce. This new Flexfresh packaging is biodegradable and will keep fresh produce dry, whilst allowing it to breathe. This initiative will serve to test whether these research findings translate into buyer preference and greater value capture for all involved.

A premium price for smaller packaged quantities isn’t a new phenomenon within fresh produce, however, the combination of eco-friendly packaging and an enhanced consumer view of higher quality fresh produce could elevate the product value.

FreshIncite: It is a powerful packaging precedent if recycled packaging can have a positive impact on the consumer’s view of product quality.

The independent pizza retailer still preferred Top

pizza_3.png The independent pizza retailer holds the majority market share within the fast paced Australian pizza market. In this convenience based market the 5 multi-site operators combined hold less than the independent pizza retailer’s market share of 53.8%.

Currently Dominos has the largest market share outside of the independents at 25%, Pizza Hut 10.7%, Eagle boys 4.6%, and Retail Food Group and La Porchetta round out the remaining 6.9%.

Clearly Australian consumers are willing to support their local food retailers. Despite being up against corporate advertising, new ordering apps, plans for driverless car deliveries and sponsorships, the local independent pizza outlet is maintaining consumer support.  

FreshIncite: The market share these independents hold against the intense competition from 5 branded pizza operations reflect how the DNA of Australian shoppers is orientated toward supporting local food retailers.  

Technology Frontier

Tesla on collision course with Uber Top

tesla_3.png Tesla has enhanced their solar powered and self-driving vehicle to now include a ride sharing system that is set to directly compete with Uber.

Tesla's approach has identified that many vehicles are unused for long periods and they are seeking to use this latent capacity. The marketing alludes to a stylish energy efficient vehicle that generates income while not being used. The ride sharing platform will be built into the vehicle, linking into a Tesla system and therefore competing with Uber.  

FreshIncite: Tesla is seeking to draw on the down time of personally owned vehicles with a system to generate income to help pay for a better energy efficient car. 

Alibaba opens their first office in AustraliaTop

alibaba_1.jpg The opening of the first Alibaba office in Melbourne Australia extends to all industries as the Chinese e-commerce giant sets up in the Australian market with their range of online selling and web portal services.

Alibaba’s plans reflect a similar model to that of US giant Amazon, with income generated by their web hosting and data provision services to support further investment in online retailing.

The company intends to service exporting and importing activities from the Australia base, whilst implementing their own payments system named Alipay for Australian consumers.

FreshIncite: Alibaba is emulating the Amazon business model which introduces a new type of competitor for other retailers in Australia. 

Android Pay takes Google closer to Australian Banking Top

android_final_4.png Australian consumers will soon be able to pay for their products using the new smartphone app created by Google called Android Pay. The new system which was launched on the 14th of July allows consumers to purchase items by scanning their phone like a pay wave credit or debit card, eliminating the need to use their wallet.

The application will work on any android phone and it doesn’t need to be open for the consumer to use the payment method. There are plans to make this available for other smart phone purchasing apps and provide an alternative to PayPal.

The Android Pay application is at the forefront of Google’s push into the banking market. The Apple payment app is yet to enjoy the same uptake with reports of resistance from Australian banks, due to the transaction and business model Apple proposed. Both of these smart phone applications will benefit from the high level of paywave transactions and terminals in place in Australia.

FreshIncite: This will build momentum toward Google’s push into the banking market and take consumers closer to an electronic wallet. 

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Freshincite is a publication prepared by Freshlogic

Freshlogic is a specialised provider of food market insights and analysis, with deep expertise in the dynamics of fresh foods. We deliver a range of services to industry and corporate clients, which aim to interpret market and supply chain conditions, or address challenges faced in food supply chains associated with changes in the preferences of consumers, supply dynamics, and economic settings.

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