Mr Martin Kneebone


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Bulding sustainable value chains: The importance of being... relevant!

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Mr Martin Kneebone

  1. 1. Fruit & Vegetable – Current market settings & likely future impactsInfocado SI f d SummititMelbourne October 2010Martin KneeboneDirector Freshlogic
  2. 2. Content • The food market macro trends • Fruit & vegetable market settings, drivers, shapers • Next 10 years
  3. 3. Our capabilities FOODmap+ capability to validate wholesale values Survey to map shares and values • Net-based technology • Incentives for collaboration grocery • C Corroborates with other supply chain b t ith th l h i specialised inputs foodservice export grocery Mealpulse™ p Inputs Farm  Processing  Marketing retail convenience Adwatch Imports  domestic specialised foodservice dining out Analysis: • Value chain structures takeaway • Value & volume drivers institutional • Pressure points & implications p p • Trends/directions/outlook event/leisure • Key players & influencers
  4. 4. Macro food market trends how they drivers impact manifest ..are driving change andMacro trends… conditions… conditions …leading to: g•Changed demographics • Share of stomach back to •Increasing the demand for retail...after 5 yrs•More complex wants & convenience • Trading downdesires •Shopping frequency up • More product convenience•Global economics •Eating out of home • Tech savvy media users y •Lower % of spend on food•Advancing technologies • Ethical foods awareness •Care for food integrity•Value sensitivity •New media landscape
  5. 5. Fruit & Vegetable market settings 190k tonnes $11.5B Processing Household H h ld Import $28 week Broking & Retail F&V 4m Production Wholesaling h l l tonnes Foodservice 6 shops per 4 weeks Export 610k tonnes
  6. 6. Fruit & Vegetable – drivers & shapers Part processing role has evolved Increasing •Supermarket influence volumes •Low value growth L l th •Strength of the specialist Processing Import •Ethical food demand Broking & Retail •Convenience demand Production Wholesaling h l l •Value discerning Foodservice •New media Export •Diverse array of channels Fragmentation with different buying $AUD making g criteria cost is higher it tough
  7. 7. Avocado market framework 10,000 10 000 tonnes $320m Processing Import Retail 48,000 , Ripening & p g Production Wholesaling $1.70 $1.80 $1 70 - $1 80 tonnes Foodservice Export 4,000 tonnes
  8. 8. All fruit consump ption prof file BOX AFTER SALAD LUNCH SNACK MOBILE SPREAD BEVERAGE BREAKFASTDINNER -DESSERT COOKED COMPONENT GRAZING & PLATTERS Appl le Avoc cado Bana ana Berry y Fruit consumption occasions Citru us Grap pes Kiwif fruit Mang go Melo on Pear rs Pineapple Summerfruit pical Fruit Trop
  9. 9. Supermarket sales growth Retailer "same store" sales v food inflation 10% 2.0 9% Woolworths Coles Food inflation Food inflation 6.2 8% 7% 6% 5% 4% 3% 2% 1% 0% Q108 Q208 Q308 Q408 Q109 Q209 Q309 Q409 Q110 Q210 Q310 Q410 Q111 Q Q Q Q Q Q Q Q Q Q Q Q Q
  10. 10. Food Market Channel Framework Outlet O tl t Retail Fruit & Veg Master channel Sub-channel numbers Market $ 11.5B Full-service supermarkets grocery Independent supermarkets Independent stores 6,143 6 143 convenience Convenience stores retail Bakery 15,647 $84.0B Delicatessen specialised Butcher, Poultry, Seafood 9,504 Greengrocer Markets Sandwich bars takeaway Independent takeaway 16,193 Quick-serve Restnts (QSR) Restaurants & cafes dining out 25,979 Pubs, Clubs & function centres 69,936 $ $42.0B Event and travel catering foodservice event/leisure 14,796 Hotels and motels Hospitals Aged care institutional Defence Correctional 12,971 Corporate (workplace) Education
  11. 11. Food dollar spend by household – market growth impact 1b Food Spend per Week ‐ Eat out & Take home 2nd Qtr 2010 Average in Q2 ‐10  Specialist  Specialist Breakfast  Breakfast Food Stores,  1.9% 12.0% Lunch, 8.7% Dinner, 12.6% Snacks, 4.6% Supermarkets 62.2% Mealpulse™ •Eat out was 29.5% in Dec 08 now to 27.8% in Jun 10 
  12. 12. Fresh food share – The specialist retailer 25 Supermarket Shoppers using Specialists - YTD Q4 2009 average 40% 35% Woolworths WW YTD Q4 09 •Advantages are robust Coles YTD Q4 09 roportion of Shoppers 30% Coles Q4 09 IGA YTD Q 25% 20% IGA •Ability to train and retain skilled staff  15% 10% g y •Highly credible with consumersPr 5% 0% Bakery Fruit shop Fish shop Butcher shop Delicatessen Convenience store Mealpulse™ Fresh Food Specialist es ood Spec a st Mealpulse™ B-13.A Reasons for Shopping at Specialists Reasons for Shopping at Specialists 100% BAKERY GREENGROCER FISH SHOP BUTCHER DELICATESSEN CONVENIENCE STORE 90% ents 80% Strong Proportion of Responde 70% advantages 60% 50% 40% 30% 20% 10% 0% service, staff location Better range regular less waiting als lity ent ter wer es dy service - Specia price Hand independe Quicker r Bett qual Support t Low stores Better Mealpulse™
  13. 13. Ethical food – awareness & demand Brands & programs Egg product price premiums 113% 120% Vegetarian 100% 80% 51% Grain Fed 60% 28% 40% 10%18% Barn Laid 20% 0% Free Range Premium over caged Organic 20%•Many messages & claims•Consolidation & clearer messages likely M hi i•Message ownership an issue
  14. 14. Convenience demand & value capture - vegetables Average price for  Average price for vegetables   Basis  for extra  $3.50 per kg value ion cts No. of produc Pre‐preparati Portion size Varieties Selling price per kg 11 * * 7 * * 16 * * * 12 * * 1 * 1 1 1
  15. 15. Communicating – value messages
  16. 16. Communications - Masterchef - what is going on At 3.9M viewers the June  25th final was the most‐ watched non‐sporting  event since Australian TV  t i A t li TV ratings began.  The MasterChef style of TV show has changed  attitudes towards home‐meal preparation among all  age groups. It has resulted in positive attitudes  towards scratch cooking at home by increasing its  entertainment value and has enhanced meal quality. Is impacting the value of some food
  17. 17. Communications - New media•The Internet is now the 3rd media channel•Levelling the playing field ideal for SME’s•New levels of consumer activism•If absent you are positioned by default•Majors players are coming back Kraft Foods Big Fork Small Fork, which g , uses the larger iPad touch screen Recipes p Food Games How to Videos $1.99 Tips & Articles Dinnertime See
  18. 18. What could the next 10 years bring • Population increases driving growth – Gl b l food security will b more sensitive...yield f Global f d it ill be iti i ld focus • More processed foods – Led by technology & innovation will take share off fresh • M More i imports of higher quality i t A t t f hi h lit into Aust – Global market...local scale will be impacted • Control of producer inputs – GM owners will arri e & e tend into cons mer marketing o ners ill arrive extend consumer
  19. 19. What could the next 10 years bring • Ethical considerations are here – B h i Behaviour & responsibility will matter & d i patronage ibilit ill tt drive t • Varying levels of value captured – Convenience remains a major driver • N New powerful social media f l i l di – New reach at new speed and tipping points • More channels will impact existing players
  20. 20. New distribution channels – most technology enabled
  21. 21. More questions than answers? For more detail Contact C t t Martin Kneebone Freshlogic Pty Ltd PH 03 9818 1588 or E-mail