9 major factors killing FMCG brands in Australia

by | Jun 7, 2018 | Branding with impact

Here is a list of 9 major factors that are killing FMCG brands in Australia.

Performance pressure on FMCG Brands in Australia has led to a culture of shifting focus to the variety of shiny new marketing toys to play with. This has detracted from what it takes to make and keep a brand successful on shelf.

1) Private label and copycat brands killing FMCG brands in Australia

 Private label brands and copycats are taking all the cues that brands have invested in over the years. These Home Brands constantly refresh and rapidly change themselves to gain shelf attention, based on what’s working and what’s not.

 The Home Brands have resources, you don’t!

Today’s major Home Brands have the resources and flexibility to easily and quickly experiment and thereby change their packs based on their shelf sales results. They can opt in and out of market and design trends in a heartbeat. They can drop products from their portfolios and pick up others with a ruthlessness that brands don’t have the luxury of.

This means it’s become an imperative for established brands to push their brands and their packs forward a whole lot quicker, if they want to compete. Brands need to ride ahead of the pack with all of their competitors in tow…including the Home Brands.  

And then of course there are all the other brands …..

 2) Increased competition and margin pressure killing FMCG brands in Australia.

 Along with traditional and established competing brands, new entrants into the space continuously eat into both market share and margin.

 3) Brand loyalty erosion killing FMCG brands in Australia.

 Added to the mix is the erosion of brand loyalty and rapidly changing consumer tastes, with both Millenials and other consumers opting out of “what has always been” into “what’s now, what’s current?”.

 4) Amazon.com killing FMCG brands in Australia

Today there is an increase in additional pressure from online shopping and the impact of the Amazon gorilla. Who really know what we are in for?

 5) New retail entrants killing FMCG brands in Australia

It’s no secret that Aldi and other retail entrants into the Australian grocery market continue to force the majors into dropping their prices. The big chains now have no option but to grow their own private label portfolio and put margin and promotion pressure back on brands to compete.

 6) Convenience vs planned.

There is the issue of customers just popping into the supermarket on the way home. Very few of us know exactly what we are having for dinner tonight, or for lunch tomorrow, never mind what we’ll be having for breakfast on Saturday morning.

Today’s grocery shoppers are busy and shopping more frequently with smaller basket sizes, just topping up. Today’s consumers have moved away from meal planning and are looking for groceries that have the look and feel of freshness.

 7) Lack of innovation killing FMCG brands in Australia.

The informed consumers of today are constantly looking for “new and fresh”, and they consider packaging as part of the overall experience when engaging with your brand. The rapidly changing media and consumer landscape means that to remain truly competitive and current, need to expand their thinking out beyond their immediate ninety day to twelve month window.

This means taking the Senior Leadership Team beyond basic budgeting and 12 month sales projection plans. They need to come along and buy into the strategic brand journey plan and both engage with it and endorse it.

8) Meal kit delivery market killing FMCG brands in Australia.

There’s a growing group of consumers who want to cook but neither have the time, nor enjoy the planning or the shopping. As consumers become more accustomed to shopping online, the fast-growing meal kit delivery market ($600 million) has boomed, now accounting for half of Australia’s $1.8 billion online grocery sales.

You have no option but to….

All of this means that just to stay in the game and be competitive, as a brand, you have no option but to continuously rejuvenate and show yourself to be active, versatile and relevant in the face of unceasing and rapid market changes.

 9) We are killing ourselves

Not only do  face huge external market pressures, they also stare down the barrel of enormous pressure from within their own organisations. Brand marketers are having to juggle multiple internal pressure balls as well as their ailing brands.

These include:

  • Management of internal politics, ever changing expectations, pressure from global investors and moving goal posts.
  • Staff churn.
  • Increased power and influence of Procurement across their domains.
  • Corporate culture instability.
  • New brooms wanting to sweep clean syndrome” looking to put their own stamp on the brand.
  • Let’s not forget the endless meeting’s which eat up so much time.

 All of these create brand pressure and instability. The end result is often a costly reactive response to both the market and internal forces.