Sep 11, 2026 | retail, Strategy
Coles and Woolworths annual reports are boring, self-serving documents, unless you are an engaged shareholder. However, behind the fluff there are hints of the rules suppliers must understand if they are to prosper.
Aldi being a private company is not required to release the level of detail of their public rivals, but by observation, while still well behind the two gorillas, the race is now a three horse race. Aldi uses a different business model tacked onto the same universal drivers of Supermarket retail that drives Woolies and Coles.
Australian supermarkets are not free markets. They are tightly controlled ecosystems, choreographed by Coles and Woolworths. Suppliers are not selling to consumers, they are they are selling to gatekeepers who own access to consumers and therefore set the rules of the game. A supplier must play by their rules, or choose not to play, and there is no middle ground.
Few supplier hopefuls who do not understand the hidden rules of engagement until too late escape with their capital intact. However, this does not stop them trying, as the allure of all that volume is powerful. Tactically the rules have evolved over time, exclusively in favour of the retailers, but the foundations remain the same as they have been for decades.
Shelf space isn’t earned. It’s rented.
Retailers are not merchants there to provide easy access to consumers. They are retail real estate agents monetising every square centimetre of space. If your product doesn’t deliver a stronger return per centimetre than the one next to it, it will be replaced by an alternative.
You get a limited window of time to prove your worth. There is no elasticity in supermarket aisles, so it is generally one SKU in, one out.
You’re not just competing with other suppliers, you are also competing for shelf space with the retailer’s own label. Increasingly these are pushing out proprietary brands as the retailers can dictate prices and terms to the supplier, capturing at least part of the proprietary margin.
Buyer thought-bubbles are not R&D.
Your account manager returns from a meeting with a buyer and says, “They’re keen on a new lime and chilli variant in a smaller pack.”
Sounds like an opportunity, but most often it is a mirage.
Buyers like to speculate. They float ideas. They riff off competitor activity. Suppliers, chasing hope, redeploy R&D and tie up production resources on a buyers thought bubble. By the time the product is ready, it has consumed resources, created opportunity costs, and the buyer has had another thought bubble. Generally speaking, ‘buyer innovation’ is a total oxymoron.
Suppliers under-write logistics costs.
Retailers want frequent deliveries in smaller volumes, as it saves them money. Suppliers want the opposite for the same reason.
Suppliers however, do not get to choose. Miss a time slot, get fined. Deliver too often, lose margin. Fail to meet targets, risk delisting.
Driver shortages, fuel price volatility, traffic congestion, and demanding delivery windows, all combine to drive the costs to suppliers up. Meanwhile, the retailers book margin increases labelled in the annual reports labelled as ‘logistics efficiency’ or some other metaphor for pushing costs off their P&L, onto those of suppliers.
Exactly the same comment can be made about many costs incurred in the retailers domain. Suppliers fund category management costs, hold ‘safety’ stock to cover demand planning shortcomings, shelf management, promotional ticketing and stock display, and more. Retailers have squeezed out costs, but have been more successful in moving them to their suppliers
Their tech stack is your problem.
Everyone wants digital transformation. Few want to pay for it.
Most supermarket systems are legacy beasts—clunky, siloed, and allergic to integration. You’ll be asked to plug into their portals, match their EDI specs, and sync to their promotional calendars.
When it fails, and it often does, suppliers cover the costs.
Cash is always king, and suppliers are last in line.
Retailers pay their bills slowly. Always have. Meanwhile, you’re expected to pay your suppliers fast. That gap in timing is stretching working capital requirements of all FMCG suppliers. As interest rates rise, that pressure just increases.
SKUs tend to breed, chewing up supplier margins.
To chase growth, suppliers add SKUs, channel or retailer specific variants, seasonal specials and promotional darlings pushed by buyers.
Each one adds operational complexity, forecasting risk, warehouse clutter, and production cost. The volume gains are often marginal, but the margin losses are not.
SKU creep is a slow-moving death, and while it is tough to delete your own products, doing so makes listing a new one easier, and beyond changeover costs like excess packaging, does not increase the costs of complexity.
When your brand leaves the shelf, private label steps in.
Retailers are brand agnostic. They want control, exclusivity, and margin.
If your brand underperforms, it’s replaced. The space doesn’t sit idle, it is quickly filled by something cheaper, more compliant, and often owned by the retailer themselves.
To survive, you need more than a barcode. You need a story consumers understand and are prepared to actively choose, and you need the funds to get the message out. Working with buyers is a two edged sword, you need them backing you, while you need to make them look smart for backing you.
Forecasting is now a guessing game.
Retailers want tight service levels, lower order quantities, and increased frequency. These expectations contradict each other.
You can’t run efficient production with small, unpredictable orders. You can’t plan logistics around moving targets.
Every delivery window missed is a cost. Every forecast error is a stockout or a write-off.
Digital is your hedge, not your saviour.
Everyone talks about Direct to customer, E-commerce, digital platforms, marketplaces, and other descriptions. Yes, they matter. But they don’t pay today’s wages. Building digital capability takes time, capital, and clarity, and most second tier suppliers are burning all three just to stay afloat.
Digital is a long game. If you don’t survive the short game, you’ll never get to play it.
Final thoughts: Know the rules, or get buried by them.
Australian FMCG suppliers are not competing in a market. They’re performing in a theatre, with a script written by someone else, who is also the referee.
The shelf is a battleground. The margin is thin. The risks are hidden, and the penalties for ignorance are brutal.
To win, you need more than a good product, retail leverage, and consumer visibility. You also need a map of the minefield and the nerve to cross it.
Sep 4, 2026 | Leadership
Most business leaders want employees to think and act like owners.
Inevitably the conversation reaches financial transparency, and their enthusiasm for implementation of what seems a good idea in principle, evaporates.
Share too little and employees assume management is hiding the real numbers and its motives. Share too much without context and explanation, and many will compare the EBIT line in the P&L with their pay packet and conclude that the owner has been ripping them off.
Business leaders often frame this as a binary choice: open books or closed books.
It is not a simple binary choice.
Every business sits somewhere on a continuum. You can choose how much information to share, with whom, when, and in what form. The benefits and risks remain; only their degree changes.
We also need to separate two decisions that often get carelessly bundled together. Financial transparency about how the business performs is not the same as disclosing every individual’s salary. You can explain how a business makes and loses money without pinning everyone’s pay packet to the lunchroom wall. Transparency on individual pay packets in my experience creates more problems than it solves.
Over a long career, I have operated at both ends of the transparency continuum. The outcomes surprised me more than once.
Many years ago, I worked as a senior executive in a major dairy company. We operated a cottage cheese plant in a large regional town.
The plant appeared to have no viable future. We were not the lowest-cost producer, and we could see no commercially sensible way to invest enough capital to compete from a sound cost base.
We made the difficult decision to close it and exit the category.
I had to manage the closure with the least possible cost and disruption to the business while recognising what it meant for employees who had often served the company for many years. The decision would affect families, milk suppliers and the wider regional community.
We told employees what we intended to do and planned a gradual wind-down that might take up to 12 months. That gave people time to look for other work. It also allowed us to run down packaging stocks and gave milk suppliers time to find alternative buyers.
As part of the plan, we also raised prices significantly, expecting that to slow sales.
Demand did not slow at all.
That response forced us to question the assumptions behind the closure. A small difference in the existing production processes gave the cottage cheese characteristics that a significant group of consumers preferred. They valued that difference enough to pay considerably more for it.
At the new price, investment made sense.
We built a new plant alongside an existing milk intake and processing facility in another location. We also offered relocation assistance to several long-serving employees.
Transparency did not save the old plant. It did preserve trust, create time and leave us room to change course when the market proved our assumptions wrong.
I faced the opposite approach after another dairy industry merger.
One of the manufacturing plants that came under our control became redundant. Product rationalisation meant we no longer needed its volume. Its quality was dreadful and its costs were significantly inflated by excessive overheads, low productivity, and the aforementioned poor quality.
Again, I had to guide a plant closure.
This time, the managing director instructed me to say nothing. If anyone asked whether the plant might close, I was instructed to deny it.
On my first visit, employees asked the obvious question about the plant’s future, and I avoided giving them a clear answer.
On my second visit, I defied the instruction.
I told them that we expected to close the plant. I explained the reasons: poor quality, excessive costs and surplus capacity. I also gave them the proposed closure date and outlined how we would help employees through the process.
The effect astonished me.
Costs fell. Quality improved.
The uncertainty had hung over the plant for years, well before the merger that had landed the problem in my lap. Removing it gave people something concrete to deal with. Some found other jobs, others stayed for the redundancy package. Those who remained also set out to prove that the case for closure rested on assumptions they could overturn.
The secrecy intended to preserve stability had helped destroy it. The truth focused attention.
My third encounter with this dilemma came much more recently.
A small manufacturing client followed my advice to share information about costs and profitability with employees. We opened the books further than the culture and financial understanding of the employees could support.
Employees looked at the EBIT line at the bottom of the Profit and Loss, compared it with their pay packets, and decided the owner had been exploiting them.
They did not understand the cash tied up in working capital, the cost of equipment, the need for reinvestment, the risks carried by the owner or the return on capital required to justify those risks.
That failure belonged to management, and partly to me. We had shown people the scoreboard before explaining the rules of the game.
Financial transparency can improve performance, trust and the quality of decisions. Information alone, however, creates neither understanding nor ownership.
Employees need to understand what the numbers mean, which ones they can influence, what actions will improve them and how the gains will flow back to those who helped create them. Without that line of sight, transparency becomes an invitation to misinterpretation.
Start with the economics closest to the work: scrap, rework, overtime, yield, customer returns, throughput and the cash cost of delay. Explain the difference between profit and cash. Explain why capital carries a cost and why the owner expects a return for carrying risk.
Then repeat the explanation, again, and again. One presentation of the profit and loss statement does not create financial literacy any more than one driving lesson creates a Formula One driver.
Increase transparency as understanding and trust grow. Keep individual salary disclosure as a separate decision, and be very wary of disclosure of individual pay.
Opening the books does not create owners. Giving people context, agency and a fair stake in better performance will.
Aug 31, 2026 | Branding, Customers, Strategy
Marketers, particularly those that emerged after the sudden take-over of marketing by digital platforms, love fireworks.
They talk about big creative ideas, reach, frequency, ideal customers and their profiles, attention and campaigns that become part of popular culture. Meadow Lea had all of that.
It also had a folding table, a loaf of sliced white bread and a woman who knew the product intimately.
That ordinary little table may have mattered just as much as all the hoopla.
In a market full of near-identical products, recognition earns familiarity, then the product feels like an old friend. This reduces mental effort and perceived risk.
Trust comes later.
Advertising can make a promise. Only performance can prove it.
Digital technology has made it easier than ever to start a business. A template, a payment gateway a social media advertising account, and a contract manufacturer can put you into the market by lunchtime.
It has also made it easier than ever to look exactly like everyone else.
Low barriers to entry enabled by digital tools and extended and readily available supply chains creates the opportunity for low-cost product imitation. The ‘noise’ generated by the presence of imitators drowns out anything but highly creative and distinctive brand building effort. This requires consistency, discipline, and a sequence of promise, proof, repetition, and memory to be delivered to consumers.
Advertising makes the promise. The product and the people provide the proof. Repetition turns that proof into an expectation, and the expectation when met consistently becomes trust.
Meadow Lea offers one of Australia’s great examples.
In 1975 I was a newly minted product manager at what later became Meadow Lea Foods. Mojo created the great “You oughta be congratulated” ads that turbo charged Meadow Lea’s market share from single figures in a highly contested and commodified market to around 23% of volume, and a greater share of value and profit.
That long running campaign did more than advertise a brand of margarine. It spoke directly to mothers at a time when more women were entering paid work while still carrying most of the domestic load. Rather than reminding them of another obligation, Meadow Lea congratulated them for what they already did.
The advertising gave the brand real meaning to those in charge of the purchase decision. National distribution made it easy to buy, and product quality kept the promise.
Then the program of supermarket demonstrations made the promise personal.
We selected and trained a small team of demonstrators in each state and kept them working in stores for 40 weeks of the year. They did not simply hand out pieces of bread, or dry biscuit with a smear of margarine on them. They answered questions, explained the product, listened to shoppers, and offered an immediate, risk-free trial.
Nobody entered a supermarket craving a square of white bread covered in margarine. That was only the conversation starter, a small piece of empathy delivered by somebody who understood the challenges being faced in a busy and fractured life that seemed to be changing daily.
The advertising said the brand understood its buyers. The demonstrator behaved as though it did. The first bite turned an abstract promise into evidence, by delivering the pat on the back the advertising promised.
Each demonstration closed a small part of the gap between what Meadow Lea said and what shoppers believed.
Most contemporary marketing teams would call the program difficult to scale. Many finance teams would call it labour intensive, tough to manage, open to shenanigans, and to the sales teams that carried the responsibility of organising the logistics, it was another task to be completed.
All were right, but they also missed the point.
The program worked because we repeated it. Week after week. Store after store. Conversation after conversation.
Someone had to recruit the demonstrators, train them, roster them, supply them and maintain the standard. Nobody won an advertising award for any of that. It was however a key to the work of building the foundations of the Meadow Lea brand.
Many businesses now reverse the sequence. They spend heavily making a promise, then leave the proof to an overloaded receptionist, an unanswered email, a poorly informed salesperson, or a late delivery.
Nothing destroys expensive advertising faster than cheap execution.
A brand operates like a trust account. Marketing opens it, but every customer experience either makes a deposit or a withdrawal.
One supermarket sample did not build Meadow Lea. Thousands of consistent conversations helped do it.
The jingle earned attention, the product tasting, evidence that the brand did what it said, earned belief.
Attention can make you famous.
Repeated proof or performance, and empathy with the key buyers builds trust, which creates a resilient brand.
Aug 26, 2026 | AI, Governance
In 1984, Dr. Robert Cialdini published Influence: The Psychology of Persuasion, outlining the six core drivers of human compliance:
Reciprocity,
Commitment & Consistency,
Social Proof,
Authority,
Liking,
Scarcity.
Decades later, psychologist Daniel Kahneman expanded our understanding of human decision-making in Thinking, Fast and Slow. He demonstrated how our fast, intuitive “System 1” brains routinely rely on these shortcuts, or as psychologists call them: heuristics, as survival mechanisms.
Both psychologists turned authors issued clear warnings: these principles could be leveraged just as easily by bad actors as by those setting out to persuade for positive outcomes.
Cialdini wrote for an analogue world of salesman, direct mail, and print advertising. He could not have foreseen the impact of the internet, social media, and generative AI.
In the analogue era, persuasion took time and human effort. Today, machine learning algorithms execute Cialdini’s drivers at micro-targeted scale. The tiny safety mechanism that were present pre digital, of time to reflect on a choice has been removed by the instantaneous speed of digital. The opportunity for rational analysis to impose itself on an immediate emotional reaction has been dramatically reduced.
Social proof is manufactured via engagement metrics; authority is mimicked by credible sounding bullshit, scarcity is simulated through algorithmic urgencies, and consistency has built its own echo chamber that hardens peoples beliefs, even in the face of clear data to the contrary.
The result is systemic fragmentation.
Households, public discourse, political systems, and social licenses are splitting into opposing, highly polarised positions.
The forces Cialdini identified have not changed, they are the result of millions of years of evolution. What has changed is that AI now automates persuasion compounding the moral gap between the ‘Persuaders’ and those targeted for persuasion.
Aug 19, 2026 | AI, Marketing
Cost reduction remains the default KPI for most manufacturing organisations. In a world where nearly every product category faces relentless commoditisation, aggressive new competitors popping up unexpectedly, and razor-thin margins, squeezing out cost feels like the only sensible survival strategy.
The alternative strategy is challenging, as it requires looking at a fundamental paradox in modern industry.
As automation has accelerated, machines have taken over repetitive tasks with unmatched reliability. Yet human labour hasn’t vanished, it is progressively relocating.
Value behaves much like the conservation of energy in Einsteins equations. It is not destroyed, it merely changes form under pressure and moves elsewhere.
If we apply this idea to manufacturing, the primary mandate of leadership is no longer just cutting costs. It is becoming the larger challenge of expanding the capabilities of employees and other stakeholders.
Value creation is migrating.
Over the last 50 years, machines mastered physical repetition, which reduces costs by replacing people, and maintaining consistency of throughput and standards. It also moves the point of value creation towards work machines cannot reliably perform: judgement, creativity, problem solving, and leadership.
As AI accelerates, we are confronted by the question of where those displaced by technology will go, what will they be doing, and what are the social and economic consequences of the changes.
In past technological shifts, manual labour to steam, then steam to electricity, horses to cars and trucks, fingers, and vacuum tubes to digital, the changes evolved over sufficient time for adjustments to evolve. There was pain associated with the changes, but it was limited albeit unevenly spread. However, each change occurred over a progressively shortening time frame. The AI driven tectonic change is happening in real time, before our eyes, so adjustment time will be very limited. Cost cutting may preserve short term margin, but it does not give customers a reason to choose you.
The scale and short-term horizon points directly toward the need to enable and enhance uniquely human skills: high-level problem solving, empathy, strategic collaboration, adaptability, and social intelligence. These are cognitive areas automation cannot easily replicate.
Despite dystopian sci-fi tropes, AI and advanced automation are simply tools waiting to be directed. Leaders who recognise where human value is moving, and actively reskill their workforce to meet it have the opportunity to redefine the ways they create customer value in their markets.
Those who remain fixated solely on cost-cutting will quickly find themselves commoditised into oblivion.
