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20 October 2018

Let's Play by Aussie Rules

Andreea Grosanu, who co-heads our Sydney studio breaks down the FMCG sector in Australia... 

If there’s one thing that Australians are proud to be known for around the world, it’s our friendliness.  Ours is a social nation, which often means getting together with friends and family to share food and good times; whether it’s a home-cooked meal round the table or familiar products straight from the packet of a trusted brand.

We love our food and the role it plays in shared experience but the choices we make and the choices we’re offered have changed dramatically over the past ten years. The change has posed interesting challenges for the FMCG sector and presents some extraordinary opportunities for packaging specialists like Equator Design.

Let’s be clear straight off the bat; we’re not talking about small market adjustments and transitory trends here – we’re looking at a global shift in the way the FMCG sector operates and the way retailers’ own brand ranges have changed the game for good. But, while own label vs brand rivalries are mature in Europe and gathering pace in the USA due to the sheer number of retailers and their tried and tested business models, the Australian market is different and unique.

For some, that’s a scary fact, swathed in onerous market intelligence gathering and challenging leaps into the unknown.  For the dynamic and talented team at Equator Design’s Sydney office, it means there’s everything to play for.

So what’s actually so different about the Australian market? We all shop in supermarkets and buy the brands that are universally familiar, right? Yes we do, but the short answer to the question of what makes our market different is ‘geography’, which is pretty hard to contend with.

Our melting pot of cultures and established traditions in Australia means that consumer tastes and buying preferences have much in common with other locations around the world. What’s more, we live in a global economy where trends are shared and commercial change happens fast.  All this should help keep us more or less in the homogenised flow of the global retail sector…but it doesn’t.  Why? Because ours is a huge island with low population density and relatively high labour costs. This means we’re often part of an Asia-Pacific or South East Asia cluster for the big brands; grouped together with high population density countries that have lower labour costs and massive growth potential in terms of sales volumes. 

In that environment, Australia’s uniqueness can get lost. And, unfortunately, many brands have also lost sight of the opportunity to invest, innovate and drive market-specific product development here over the past few years too.

But change is coming. Historically, our retail landscape in Australia has been limited when it comes to supermarkets and, in any market or any sector, lack of competition means lack of change. However, with the entry to the market of discounters and member type retail environments the market has had a shake-up.  Suddenly, instead of a consumer market characterised by brands that offered limited investment and innovation, the retailers were driving change in the Australian market and challenging brands to keep up or lose out.

The new retail landscape in Australia – which, excitingly for us is still evolving – has shifted the balance from product strategies that used to ask ‘will Australians buy this?’ to product development programmes that ask ‘what do Australians want to buy?’ It’s a change that makes for exciting times for Australian shoppers, as retailers bring innovation to their aisles and brands compete for share of sales by waking up to the opportunities offered by the Australian consumer.

As a packaging specialist Equator Design is well-placed to be on the game-changing team of the Australian retail renaissance. Our work with both retailers and brands in the USA and Europe, also means that we’re able to bring insights from other markets into our work, strategically, visually and technically.

Fundamentally, our job is all about making products stand out on shelf.  Looking forward, there’s likely to be a greater diversity of both shelves and products coming to these shores over the next few years and we can’t wait!