Page 44 - Retail World March 2021

DAIRY CASE SMALLGOODS’ GROWTH AND OPPORTUNITIES The $2.8 billion smallgoods category has attracted “strong” value growth (up 14.8 per cent) and volume growth (up 4.1 per cent) driven by changes in shopper behaviour during the Covid-19 pandemic (IRI Scan up to 10/1/21, supplied by Primo). “Shopping baskets were larger due to shoppers eating more at home and shopping less frequently,” Primo’s Mr Herriott said. He also notes an “acceleration” of the long-term trend of shoppers switching from deli to dairy. “During the Covid period, we’ve seen shoppers spending less time in store and trying to reduce interaction with others during their shopping trips,” Mr Herriott said. “We expect this behaviour to revert as shoppers are more comfortable. “Retailers and manufacturers have the opportunity to interact with the shopper by leveraging newfound familiarity with technology such as QR codes, to suggest different recipes and meal options.” The future of Primo Primo’s vision is to be the food company of choice, providing a “great range” of quality products in Australia. “With a heritage of being the market leaders in smallgoods and with emerging footprint in other food categories, Primo is determined to follow a consumer-centric approach and has paved a way for developing new, innovative products,” Mr Herriott said, adding that the company is committed to providing high-quality products, even during challenging times. Additionally, aligning with its core mission and vision, Primo is said to be developing more sustainable and environmentally friendly options across a range of products, catering to the recent trends in shopping behaviour. SPREADING THE LOVE FOR HOME COOKING AND PREMIUM The chilled spreads category in Australia is worth more than $1 billion annually, with value sales consistently growing ahead of volume sales over the past few years (IRI Market Edge AU Grocery Weighted MAT to 3/1/21, supplied by Fonterra). Over the past 20 years, Mr Kroussoratis says, volume sales in this category have been “inelastic”. Like cheese, however, he notes increased demand due to home-based cooking – up 9.3 per cent last year (IRI Market Edge AU Grocery Scan MAT to 3/1/21, supplied by Fonterra). “With around 97 per cent of Australian households already purchasing the category, like cheese, growth is being achieved through premiumisation \[IRI Shopper Panel National Panel MAT to 3/1/21\],” he said. “Category value growth was driven by butter and dairy blends, while margarine has been in declining year on year due to changing health perceptions of consumers. “Trends impacting category performance are currently small packs, organic, natural/ less processed products and value-added convenience like flavoured butter.” Star of the spreads category Like cheese, spreads are also a core part of Fonterra, says Mr Kroussoratis, with the business holding a 33.7 per cent branded market share with its Western Star and Mainland brands (IRI Market Edge AU Grocery Weighted MAT to 3/1/21, supplied by Fonterra). Western Star is promoted as the leading brand in the spreads category, holding more than 27 per cent value share and growing sales by 25 per cent compared with a year ago, which is said to be almost double the growth rate of the total category (IRI Market Edge AU Grocery Scan MAT to 3/1/21, supplied by Fonterra). “Established in 1926, Western Star has a long history of award-winning butter and is made in south west Victoria from high-quality milk from local farmers,” Mr Kroussoratis said. “It continues to be a trusted choice for shoppers, with more than a pack sold every second. Our recent campaign proudly shares the people, place, and passion behind the brand and why it’s ‘more than butter’.” Advice for retailers Mr Kroussoratis suggests that retailers can unlock further value growth in chilled spreads in several ways. “Support trade-up by allocating more space to growth-driving segments and value tiers, having the right price and pack size architecture, as well as driving inspiration and activation at the point of purchase during key events,” he said. “\[Retailers can also increase\] segment cross-shop on the path to purchase. “While household penetration is saturated in total category, there’s still room to grow on segment level. An occasion-based in-store layout can encourage shoppers to purchase the right product for different usage occasions, eg, butter for cooking/baking and dairy blends and margarine for spreading.” 42 RETAIL WORLD MAR, 2021