Growth slows as retail prices are pressured
Packaged food showed slightly slower growth in 2012 compared to 2011 and the CAGR seen over the review period. The economy remained tight, price discounting continued and lower-priced brands, along with private label, all placed pressure on value growth in 2012. Retailers continued to encourage suppliers to review their supply chain logistics, to pass cost savings on to the customer, whilst manufacturers continued to battle for growth and maintain share.
Polarisation in most food categories
The expansion in culinary food tastes, influenced by television cooking shows, chef-endorsed cook books and food recipe websites, is giving manufacturers the confidence to innovate and introduce more premium, value-added food products that are restaurant inspired. However, in contrast to the premium end of the spectrum, budget and economy brands, including private label and cheaper imported food products, are also being offered at lower prices for the more budget-sensitive shopper. This has led to the middle tier of food products being squeezed and producers having to discount in price to become competitive. This polarisation, boosting economy and premium positioning in most food categories, presents a wider range of choice for discerning consumers, and continues to create niche categories within packaged food.
Company rankings remain largely unchanged
Company value share changes were not substantial over the 2011-2012 period. Goodman Fielder New Zealand Ltd led packaged food, while Fonterra Brands (NZ) Ltd followed closely behind. Heinz Wattie’s Ltd remained ranked third. These top three companies account for strong coverage in a number of categories within packaged food and contribute significantly to the manufacture of food in New Zealand.
Supermarkets continue to dominate
Supermarkets gained a slight increase in channel distribution in 2012, to significantly dominate the retail packaged food environment in New Zealand. There remained only two major companies involved in supermarket sales, namely Foodstuffs (NZ) Ltd and WOW (NZ) Supermarkets Ltd, both having a number of retail brands that compete directly against each other. In comparison all other channels remained small and had little impact overall. As a result supermarket retailers continued to place pressure on suppliers, while manufacturers found it harder to maintain share, given the power of retailers and the presence of private label.
Steady growth forecast
The outlook is for steady constant value growth over the forecast period, at similar rates to the growth seen in 2012. Although consumer confidence is likely to bounce back over the forecast period, the economic recovery has taken longer than first expected. In addition, the mindset of consumers to reduce debt and save not spend will have a bearing on food purchases and retail prices will remain competitive in most packaged food categories. Price discounting and the expansion of cheaper imported brands and private label will continue to put pressure on value growth.
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The Packaged Food in New Zealand market research report includes:
- Analysis of key supply-side and demand trends
- Detailed segmentation of international and local products
- Historic volumes and values, company and brand market shares
- Five year forecasts of market trends and market growth
- Robust and transparent market research methodology, conducted in-country
Our market research reports answer questions such as:
- What is the market size of Packaged Food in New Zealand?
- What are the major brands in New Zealand?
- As economic prospects slowly improve, are consumers starting to eat out more and spending less time cooking at home?
- How is private label performing in the wake of retail consolidation and the global economic hangover?
- Do consumers want value for money or added value?
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This industry report originates from Passport, our Packaged Food market research database.