Will Gordon, Commercial Director at Incite, shares his expertise on the critical success factors for entering and growing the Australian market and why brands should consider Australia as their next export market to open.
With a large grocery sector and population of consumers that have an affinity for new and innovative products, Australia is a fantastic export market for food and drink brands to consider opening.
What do you believe are the critical success factors for brands looking at entering and growing the Australian market?
The Pitch: Grocery Category Managers are bombarded daily with new product proposals. Talking to the right person and finding the decision-maker is one thing, but to even initiate a discussion, a well-thought-out Commercial Proposal is vital. A clear picture of the competitive landscape and white space a brand is looking to target is vital to demonstrate intent and market knowledge.
Pricing: Margin expectations vary significantly by category, and allowances must be made for trade-spend and store-level promotions. Brands have one chance to get this right, as price increases and adjustments are frowned upon by Australian grocery channels.
Logistics: Geographically, Australia is a large country. Finding a distributor and warehouse partner is key to long-term success. Retailers have extremely strict expectations on DIFOT (Delivery in full, on time) for weekly orders. Products that are underperforming and not providing a return on valuable shelf real estate for the retailer are quick to get delisted, no matter how attractive the proposition may be.
Test and Learn: Ranging windows generally operate on a 12-month rolling calendar. New entrants have this period to prove the return on investment of any product listings they have gained. It’s vital that brands spend this time tweaking and testing the levers available to ensure that the desired rate of sale meets the targets put forward in the original business plan.
Why should brands consider Australia?
Scale: A product listing with just one of the leading grocery channels can open almost 900 doors for distribution. A carefully managed launch across multiple banners can see 2,500+ new distribution points.
Affinity for imported products: Although Australia is a significant producer and exporter of food products in some categories, the diverse and multicultural population means that demand for innovative imported FMCG goods remains strong.
Ease of doing business: Provided that the fundamentals are done properly, the distributor and retailer relationship is relatively straightforward. Expectations are very clear, and unlike other markets, there are no listing fees or hidden watchouts.
This story was originally published by Incite, here.
