Dec 4, 2013 | Branding, Change, Marketing, retail, Sales, Small business
The produce branding model used by the agricultural so called marketing programs run by industry bodies all fail the basic test of being consumer centric. Generally they are retailer centric, using grower levies to fund discounts, and sometimes display space, never brand building. ”
“Australian tomatoes” is not a brand, it is simply a description.
Besides, the major retailers are exercising their control of the supply chain by not allowing proprietary brand building marketing anywhere near their stores.
The major retailers hold varying shares of produce categories. I suggest that hard vegetables like potatoes and carrots are in line with their overall share of around 75%, but their share of sensitive, seasonal fruit is probably more like 40%, with everything else falling somewhere in between. Where they fall depends on the “commodity” status of the produce, and consumers view of the trade-off between convenience and freshness, taste, and the more subjective things like customer service and product provenance.
Sydney Harvest is determinedly consumer centric. It is an evolving business model that creates a collaboration between the best growers in the Sydney Basin ands specialist produce retailers in Sydney to deliver field fresh, best quality, provenance assured produce to discriminating consumers, turning the usual supply chain into a demand chain.
Currently in pilot, the initiative is setting out to determine if there is a market in the niche, as there is certainly a niche in the market for such a collaboration.
Dec 2, 2013 | Change, Governance
So, the Treasurer has blocked the acquisition of Graincorp by Archer Daniels Midland. However, the acquisition of Warrnambool Cheese and Butter by Canadian group Saputo is OK.
Go figure!
These two businesses are amongst the last significant, strategically important agribusiness assets left in Australian hands, they are subject to the same rules, same laws, yet the political outcome is different.
Why?
Irrespective of your position on the rights and wrongs of these two proposed transactions the fact that there is a different outcome from the political deliberations must be of concern. I have not heard any logical arguments that lead to a conclusion that the outcomes should be different, and can only assume it comes from political expediency, hypocrisy and hubris rather than a dispassionate application of he laws meant to govern us.
The other reason I am pissed off with this decision is that I lost a $50 bet. I was certain that after the approval of the Saputo takeover of WCB in October, that the precedent provided would be sufficient for the Treasurer to ignore the silly blathering of Warren Truss, and acerbic tongue and threats of Barnaby Joyce, and be consistent.
Not so it seems.
There are reasonable, logical and economically and socially defensible arguments on both sides of the question, and inevitably not everyone would have been happy with a consistent decision, but those observing the behaviour of the government will scratching their heads at the inconsistency.
I do however look forward to the smug, self-congratulatory remarks of Mr Truss who I expect will sound like George Pell on Rohypnol, I need to lose some weight, and this may help.
Nov 27, 2013 | Change, retail, Sales, Strategy
The verb that describes the process of retailers ignoring the shift to digital: payment, e-shopping, mobile selection of destination, on-line reviews, and so on.
The business model is rapidly evolving, whatever your current model may be, nothing is set in stone, or even rubber. To survive, business models need to be granular pieces of collaborative capability that capture the instantaneous, mobile, web-enabled future.
Currently, our esteemed political leaders are debating how to extract GST from net sales, bleating about the lost revenue that should go to hospitals, schools, and perhaps overseas study tours. It has happened for the last few Christmases; the retailers’ association generates some on-line sales numbers, then applies GST, hyping up the lost revenue to pollies who are too silly to recognise the flaws in the logic:
- Not all sales over the net are “lost” sales to bricks and mortar retail: the net is a demand generator, it does not simply suck sales away from retail.
- Not all net purchases are from international sellers: many are domestic, on which the GST is collected.
- On-line sales are growing strongly, but are still a modest 6.3%, according to the latest NAB survey. Optimising the other 93% would seem more productive than bleating about the little they lose.
- The compliance costs will be huge. Irrespective of how many economic models are generated, common sense would lead to the conclusion that a significant percentage of parcels would need to be opened, and heavy fines imposed, to put a brake on international purchases. If Customs cannot stop the flow of drugs, guns, and such by post, what makes them think they can be more effective slowing the flow of Barbie dolls and books at Christmas?
- Our retailers have the perfect right, if not the capability, to sell internationally, boosting their numbers. Obviously, boosting capability would seem sensible.
The world has moved on. Being “netf…ked” is optional – a choice in the hands of management. So, why not set out to be the netf..ker” rather than the” netf..kee”
Nov 26, 2013 | Change, Governance, Management
There are now so many one person businesses emerging, SME’s that employ no-one on a full time basis, but call on contractors and specialists when necessary, that I think we need a new term:
“Solepreneurs”.
They are often entrepreneurs, but not in the generally accepted sense of someone doing something radically new.
Rather, they are seeking to innovate, fill a niche, provide a service, or just do a better job on a local level, or in a marginally different way, often personalised in a way corporations, loaded down with overheads, processes, and corporate egos cannot. The digitisation of the way we work has removed the transaction costs in so many ways that these solepreneurs now have marketing and administrative clout unimaginable just 20 years ago, sufficient for them to often be potent competitors to established businesses that perpetuate the myth of the corporation.
The local chambers of commerce and networking groups are filled with them, and whilst individually they are insignificant, except perhaps to their customers, together they are a potent force emerging in the economy.
I wonder when politicians and rule makers will wake up?
Better be soon, as the face of the workforce is changing rapidly, and the old ways of public administration simply do not work well enough.
Nov 18, 2013 | Change, Governance, Leadership, Management, Operations
Perhaps unfortunately I was on the receiving end of a rant about design thinking last week. It was a passionate, articulate, and informed rant, but a rant nevertheless.
There is no doubt in my mind that design thinking is a competitively crucial capability. In this homogeneous and connected world, recognising the value that design can deliver, that it is an integral part of not just the physical products, but of enterprise culture and processes, is essential to commercial longevity.
However, design thinking has a fundamental flaw, a flaw clearly demonstrated by the “rantor” last week. As my old Dad used to say, “Son, you get 1/10 for thinking about it, the other 9 are for doing it”
My rantor was a thinker, but do not ask him to do anything creative. It is hard, dangerous (to a career) work to be contentious, advocate stuff outside the status quo, to be the questioner who backs up the questions with action, and most shy away.
We do need more design thinking, but we also need way, way more design doing, so stop hyping, and start doing.
Nov 12, 2013 | Category, Change, Governance, Leadership, Strategy
Years ago there was a line in the film “Breaker Morant” where the breaker, played by Bryan Brown said of a young ladies virtue “another slice off a cut loaf will not be missed” .
I never forgot the line, and have used it often, usually to make the point that a collection of small, and in themselves insignificant changes all added up eventually make a big difference. Just like a loaf, one slice may not be missed, but lose some more, and soon enough you have no loaf left.
The treasurer approved the takeover of Warnambool Cheese and Butter (WCB) earlier today by the Canadian group Saputo, should the current take-over squabble turn out in their favour
The original Saputo offer of $7.00/share has now been upped to a current $8.00 with current share price well north, there is anticipation of further action by Bega Murray Golbourn, or Fonterra.
It is now inevitable that WCB will cease to be an independent dairy processor, it just remains to be determined if it will be owned domestically or by an international entity.
The WCB directors have done a pretty good job by their shareholders, their shares are now trading at 8.50, after being stuck around $4 for a considerable period up till July, after some pretty crap results. This is despite being a strategic supplier in an industry with demand growing strongly, particularly in Asia.
There is a bit to go, but WCB is as good as no more. Now to the offer of ADM for Graincorp, a decision slated for December 17, and feted as the more important of the two decisions due to the competitive stranglehold Graincorp has on grain handling infrastructure in the eastern states. If nothing else, the pathetic blustering of Warren Truss , and acerbic one-liners from Barnaby Joyce will be worth waiting for.
The real concern however, is the long term impact of having major food producing industries controlled overseas. Without being in the least bit xenophobic, and recognising that Australia simply does not generate enough capital to fund all the demand for capital in the economy, it cannot be healthy for the prospects of our grandchildren to be so beholden to the overseas boardrooms who control the food supply chains.
Stop the presses:
Murray Goulburn has made a further offer for WCB on Thursday 14th of $9/share, a substantial premium over the current Saputo $8/share offer, and over the closing price of $8.50 on the exchange. This is pretty heady stuff for a business that has consistently failed to deliver adequate returns to shareholders for some years, and it is hard to see how Saputo can go much further without the rationalisation benefits that MG would have.
Stop the presses, again!
It is Sunday 17th, not a day of rest in the dairy industry. Murray Goulburn has indicated that they will beat the latest Saputo offer, price to be announced, but they have the hurdle of competition policy to jump, stupid as that is in these circumstances. So, the deliriously happy WCB shareholders have the choice of taking the unconditional Saputo offer now, or waiting a bit to see what MG has in store. Meanwhile, Bega have upped their bid, but it is below the Saputo bid, so is essentially irrelevant. However, what is not irrelevant is the Bega shareholding in WCB, which along with that of MG and Fonterra add up to around 40% of WCB.
Whatever happens to WCB this coming week, Bega will come into play as soon as the dust has settled, perhaps sooner, as it is one of the very few Australian dairy assets left bigger than a paddock with a few cows and a bathtub.
