FreshIncite August 2016

What We’re Seeing

Online Food & Grocery sales to $3.6B Top

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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.

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.

Retail

Eco-friendly packaging that signals product qualityTop

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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.

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

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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.  

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.  

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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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