New Zealanders and Australians are often confused by those without much experience in our part of the world, but as Retail X founder Juanita Neville-Te Rito explains, there's plenty of regional differences between how we like to do business.
I recently attended an event hosted by the Australian Trade and Investment Commission as part of the Fine Foods Fair. A select group of Australian and New Zealand food manufacturers were there to hear me talk about the commonalities and differences between Australia and New Zealand - from the point of view of how to crack each other’s market.
It was a perfect opportunity for a joke – Google my headline and you will find one. Suffice to say the Kiwis always win. Funny that I take that position as I am both Aussie and Kiwi. So, I am a perfect candidate to talk about the customer and retail sector having continued to work on both sides of the Tasman.
I first came to New Zealand when I was 22 years old, fresh out of uni and working for Eagle Boys Dial-A-Pizza. My job. To explore if New Zealand was right for us to bring our offer. I hopped off a plane with a little knowledge. What I found surprised and delighted me. The grocery sector and the quick service restaurant scene was quite under-developed. There was a diverse community from the one I came from in Oz; Italian, Greek, Vietnamese and Croatian. New Zealand had this large Polynesian and Maori community. Fast forward to 2018 and hasn’t both sides of the Tasman changed.
I returned to New Zealand in 1997 and it still held the mantle for the most KFC being eaten in the world but the ethnic profile had diversified again. Many more Indians and Chinese than Australia influencing the tastes (authentic takeaway food); the way we shopped (markets, independent food stores); and how we liked to pay (cash vs. credit).
Kiwis are incredibly price conscious. Neilsen completed a study in June 2017 “Connection and contrast: Marketing to Australian and New Zealand consumers” recognising Kiwi bargain hunting: 73 percent of New Zealanders shop for specials while 55 percent of Australians say they tend to hold out for a sale.
Now I was at this event to talk about the differences as it related to the food sector. There is a cycle, about every seven to 10 years, when the Aussies realise that New Zealand is not a state of Australia. This loosens the reins so we have local marketers of food manufacturers connecting with our local markets’ heart, tastes and wallets. You see it demonstrated in everything from localised advertising campaigns, to adaptations in the recipes of products. Out of these cycles, cost cutting occurs and the reins go back to Australia. It is then that the local Kiwi manufacturers punch above their weight in terms of product on shelves and share of voice. We are within one of those cycles currently.
New Zealanders are incredible early adopters. We have incredibly innovative food manufacturers that explore taste profiles, packaging, ingredients and sourcing. Thinking you can simply cross the ditch and get listed might be possible. But the dynamics in the market are considerably different.
The grocery scene in Australia is competitive with Coles and Woolworths being challenged by everyone from Aldi, Costco, IGA and Lidl to open soon.
New Zealand is very different. A duopoly effectively between two groups that sit within the top 250 retailers in the world. Woolworths NZ and Foodstuffs. If you are an Aussie trying to break into New Zealand, Foodstuffs are important to understand. Progressive is like Woolworths Lite.
Pak n Save
- 30,000 people nationwide
- Proudly 100 percent Kiwi owned and operated
- Independently owned and operated
- Foodstuffs North Island and South Island
- Each regional co-operative is owned by its retail members, and operates independently with its own board and management
- The two regional co-operatives jointly own Foodstuffs (NZ) Ltd which representing the two co-operatives' interests on issues of national or grocery-specific importance.
WOOLWORTHS NZ ENTERPRISES
- Over 184 Countdown supermarkets
- 18,500 people nationwide
- Part of Woolworths Limited (Australia)
- Franchisor of the Super Value and Fresh Choice (62) supermarkets
- Pioneer in grocery online shopping
- Onecard – one of the strongest loyalty programmes in NZ
Even if you get listed with Foodstuffs’ head office you need to work both North Island and South Island cooperatives to get on-shelf. This means you need to be prepared with the costs of having a salesforce and merchandising team to make the most of the opportunity. Pak’n Save is a behemoth and you need to embrace that. They tend to be nimbler than Countdown at getting product to market. They often adopt an attitude of ‘let’s try it and give it a go.’ Countdown has a plethora of processes that you need to navigate to get product on the shelf. It’s the same with any large corporate so not distinct to the business.
The New Zealand Food and Grocery Council in New Zealand is a wealth of resources for those wanting to participate in the sector. They have a professional and coordinated approach that give a hand-up to new entrants with resources such as the sales and merchandising group.
The one specific notable difference when trading in New Zealand is the desire by the retailers to achieve a win/win outcome. We negotiate hard for sure, but in the grocery sector each party wants to see you grow. Genuinely. In Oz, it’s a little more mercenary. It could be because more Brits operate at the category management level and they are used to a completely different game. But it is what it is.
The best advice I could give at the event is that you need to have your own people on the ground in each market. You need to understand the dynamics of the customer. You must have a face and be seen. It’s equally important for our shoppers who love to have a say and want to know you are a part of either community – not a faceless business simply out to make a quick buck.
Shoppers on both sides of the Tasman are highly promiscuous when it comes to product and shopping. We follow similar trends and have a passion for the latest and the greatest. We both love genuine, authentic stories about product and why it will make a difference to our lives or solve a problem. The story needs to make sense to us. Whichever side of the Tasman we sit on.
PS. In case you were curious, the Aussie’s don’t own Lorde, Taika Waititi, pavlova or the All Blacks. Apparently they do own Crowded House because one of the Finn brothers said so in an interview somewhere.
This story originally appeared in NZ Retail magazine issue 757 August / September 2018