May 27, 2014 | Branding, Communication, Marketing, Strategy
‘Rich red Fountain Tomato sauce”
Fountain Tomato Sauce used to be the market leader in NSW, daylight was second and third. This was a long time ago, and responsibility for the Fountain brand was my first real job as a product manager who had real accountability, and the power to make lasting brand and resource allocation decisions.
I walked into the job just as Franklins (remember them) launched a “No Frills” tomato sauce, at 0.69c on shelf against the 0.73 for Fountain. Our volumes immediately took a huge hit.
I still remember the details, and the near panic that ensued.
“No Frills” was the first real housebrand of the type that 25 years later would play a role in the demise of the Australian food processing industry.
The immediate instinct was to drop the price of Fountain, and compete aggressively, certainly that is what the sales people insisted on, but we took a different tack.
We increased the price, to 0.81c, improved the product a fraction by adding a few percentage points more of tomato paste, and advertised, giving consumers a reason to pay the extra. When it was just 3 cents, chances were the products were pretty similar, but when the difference was 0.12 cents, consumers recognised they were not the same, both might be tomato sauce, but they were not the same, and they had to make a conscious choice.
We set about telling people why Fountain cost more, and why it was a great choice over the “cheapie” delivering real value to them and their families, and they paid the extra, willingly. Our sales went up, margins were up, the MD was very happy, and I was over the moon.
Point was, we gave consumers a reason to buy Fountain, we told a story, entertained, informed, it was a significant premium, but not one that would break any budget, and the product was better, much better, and consumers felt better buying it and having it on their table.
“Rich Red Fountain Tomato Sauce, Australia’s finest red”.
Wish Youtube was around then, and I had copies of the radio ads, they are still the ads I am most proud of over a long marketing career, with many successful ad campaigns.
May 21, 2014 | Change, Governance, Leadership, Strategy
Courtesy www.theage.com.au
Years ago I worked as a junior marketing bloke for Allied Mills, which became Meadow Lea Foods, then Goodman Fielder. I returned 25 years later as a contractor running a specialist unit of the ingredients division in a pre-sale “polish-up” as they struggled to manage their assets and generate a sustainable profit.
Finally, it seems GF, the last really significant Australian FMCG business has dropped the last hospital pass, and is being sold overseas.
What a shambles, a litany of strategic bumbles and crap management over a long period. It is also a report card on the whole Australian food processing industry. The sale reflects the result of the challenges that have finally led to the demise of large, Australian owned enterprises in the food industry. One day a Phd student will document all this, and perhaps the mistakes many of us saw evolving over a long period will be articulated in the hope we learn something.
I have written about this progressive failure to retain domestic ownership a fair bit over the last few years, the fiddling, the missteps, stupid stuff by both management and regulators, and now just feel sad rather than angry as I have been before.
The undoubted opportunities for Australia to become the food basket of Asia will not go away, we will still get some of the benefits, but just those bits that multinational conglomerates give us, almost none will be because we can make the decisions that have a long term impact on the shape and nature of the enterprises. Those decisions will all be made overseas in someone else’s best interests.
Vale Australian value added food processing.
PS. May 28.
It has been announced that, as expected, Peters ice cream has been sold. to UK based R&R icecream, funded by a French private equity group. Despite a checkered ownership history in the last 25 years, Peters is a brand of my (long ago) childhood.
Sigh.
May 1, 2014 | Change, Innovation, Strategy
There is plenty in the press about the role agriculture will play in the post mining boom era. “Asia’s foodbowl” and other such optimistic clichés get front page coverage.
I have been sitting in Armidale (NSW) for a few days, I have a bit of long term business up here, and I like the people, so come up fairly regularly, but the sense of optimism I normally find despite the difficulties is being squeezed by the realities:
- Communication. Armidale benefited from the presence of independent member Tony Windsor holding the balance of power in the last Parliament, it became one of the poster children of the NBN. It will eventually be a huge boon, but the implementation has a “pink batts” aura about it. A client lives 13 kilometres out of town, running a small property as an adjunct to other activities. She is unable to download a video from youtube, the NBN does not come out to her, she is on the end of the copper “pipe” and this will not change for many years. 13k, this is not the middle of the Simpson desert, it is almost an urban outskirt of a major regional centre. By contrast, a building in the CBD with a number of SME tenants of various types has been wired for the NBN, and the copper is about to he turned off. Problem is there is something wrong in the wiring, and the new stuff does not work for parts of the building, and fixing it seems to be a bit hard. Somebody wake me!
- Transport. We have vast distances in this country. To compete internationally and service those hungry mouths in Asia, we need to be able to cover the distances efficiently, and get our stuff onto boats and planes reliably, quickly and cost effectively. Road transport is dying, literally. The average age of truckies increasing, as young blokes find more financially rewarding and less physically challenging ways of earning a living. Those retiring are not being replaced even as the demand for freight providers increases. Rail is a joke. What is left of the regional rail network is unreliable, and deteriorating.
- Climate change. Nobody in Canberra, or any other cosy clime can do anything about the weather, but for heavens sake why can’t we recognise that there is change happening that will impact on our lifestyles and livelihoods over the next 200 years and recognise that politics and ideology have nothing to do with dealing with the problems in a logical and economically sustainable manner. The people in rural communities like Armidale are like the canaries in the mine, they see and feel the subtle changes as they occur way before the boffins in laboratories and caucus rooms are even aware of them. Listen.
- Immigration and human capital. This is a university town, as well as a centre of rural innovation. The diversity emerging is evident as you walk around the town, and particularly around the university. However, lets be fair dunkum about the capabilities we need for the long term and be sensible about scoring these items as components of the immigration intake. This bit is personal. My brother in law lives in Armidale, obviously with my sister. He is a globally experienced IT guru, and Pommie. His skills are in great demand, but we do not let him work, while we go through an extensive, detailed bureaucratic process projected to take another 6 months on top of the year to date, assuming all the crap necessitated by the form fillers turns up without delay from all the places in the world he has worked at advanced, leading edge IT applications. He is sitting on his hands as my sister tries to make ends meet, because they decided to settle here after 25 years of globetrotting. How many degree qualified hairdressers and chefs do we need on 457 visas? Armidale is a town that desperately needs his skills if the NBN (assuming it is rolled out successfully) is to deliver he economic benefits projected.
If we are to have the post mining agricultural boom, we need to work for it, not just hope if arrives by some osmotic process.
Apr 23, 2014 | Branding, Marketing, Strategy
My early days of marketing were as a minor part of the team that created Meadow Lea, the brand that completely changed then dominated the margarine markets for the following 25 years. I was really just a young gopher, but the lessons that came with those successes, and the trials in between, were scorched onto my brain.
10 years later I joined a major dairy company as marketing manager, and the first thing on my list was to do to ourselves in the milk business what Meadow Lea had done to the butter market.
Shock, horror, Sacrilege!!.
It was even illegal.
Pulling the dairy fat out of milk and replacing it with vegetable fat had been enshrined as illegal in legislation, which was not about to change because some marketing bloke thought it was stupid, and could see a commercial opportunity.
Even the technical staff of the business thought I had gone stark mad, or at least drunk too much at lunch with the agency (it was the eighties after all) and refused point blank to do any development.
It took eight years, but eventually Farmers Best was launched, and whilst not becoming anything like the Meadow Lea blockbuster I had envisaged, certainly prevented anyone else having a go.
My point, not all the good ideas come from the domain you inhabit, from your people, or even your branch of technology.
Looking outside for ideas, technology, and innovation in all its forms, is not just sensible, but in these days of homogeneity and rapid dispersion of ideas and techniques, it is essential.
And the law? well, it was quietly changed as it had became obvious that consumers did not give a fig what sort of fat it was, they wanted the benefit of lower cholesterol and resulting longer life.
Apr 8, 2014 | Leadership, Marketing, Strategy
Often I find myself engaged in conversations with those running small businesses who believe they have discovered the next big thing, the idea that will change the world, or at least their business.
It can be as simple as a tweak to an existing product that enables it to be used in an adjacent market, to a patented idea that they believe will change the world, the 3 questions I always ask remain the same:
- To whom will it add value?
- How will it add value?
- By what means can you unlock that value and make a return as a result?
Whilst answering those questions can be time consuming, and sometimes confronting, and is often an evolutionary process, they constitute the core of strategy development,
So often I see a solution in search of a problem posing as strategy that it makes me shake my head in frustration, when a bit of discipline in the way tasks are identified and managed can go such a long way. These are 11 tasks you can set yourself to help the process of answering the “big three” along.
Mar 24, 2014 | Change, Leadership, Personal Rant, Strategy
Until I was about 10 years old, I lived in a little cottage at North Avalon, and used to walk to primary school through the sandhills, along the beach, then to school, and back. It sometimes took longer than it should have, as there was simply so much to see and do.
Those with children who have been to a farm nursery will understand the joy, the wonder of it to those kids, yet, this is not a normal part of our landscape, as it was just a very few years ago. This connection to the world around us has been replaced by apartment blocks, video games, and concern about the safety, both physical and emotional, of our kids.
Somewhere along the line we have lost something, real engagement with the natural world has been lost, replaced by coverage by David Attenborough.
Imagine the urban landscape that included again, those opportunities for the production of a bit of food for the family, and neighbours, how much reconnection might occur?.
Man is a social animal, and at some level we all understand that the most powerful motivator is recognition, not money, so social collaboration when enabled and recognised can change the world.
Look at what had happened with the town of Todmorden in Yorkshire, England, the productive gardens in our own backyard, have the potential to again be social glue, a force for the benefit of us all.
Problem is, the short term, financially driven mind set that dictates the usage if land around out cities, as well as in them mitigates against this opportunity to once again create the enablers of the production of social glue, and our children and grandchildren will be the worse for it.
