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Survey sheds light on Australia’s online grocery shoppers

A third of consumers who buy their groceries online do so because it’s easier than shopping in a physical store.

Australians are curious about the benefits of buying their groceries online, but the majority don’t feel the need to make a permanent transition as they remain content with the current offerings provided by the bricks and mortar stores, reports customer satisfaction research and ratings business Canstar Blue.

Based on a survey of 6,014 Australians, it said consumers often prefer to physically inspect certain grocery items before purchasing them, particularly when it comes to fresh fruits and vegetables, dairy products and meats.

“However, 42% of the 1,474 adults who have bought groceries online in the last six months said they expect to do the majority of their shopping this way in future. And as online grocery retailers continue to develop their services, it seems a reasonable assumption that more and more consumers will choose to shop this way in the coming years, even if it is only occasionally.”

Of those who had ordered groceries online in the last six months, just one in five choose do all of their shopping this way, Canstar Blue said.

Its research also found:

Who buys their groceries online?

  • women (27%) are more likely than men (21%) to have bought groceries online in the last six months
  • but of those who have done so, men (22%) were more likely than women (18%) to do all of their grocery shopping this way
  • adults aged in their 30s were most likely to have bought groceries online in the last six months (37%), followed by 18-29 year-olds (30%) and consumers in their 40s (29%)

Why people buy groceries online

  • 35% of consumers buy their groceries online because it’s easier than shopping in a physical store
  • 24% struggle to find time to shop in-store
  • 17% believe it’s cheaper buying online
  • 7% don’t like visiting supermarkets
  • the majority of survey respondents (55%) always use the same website when they buy their groceries online, but 36% have tried more than one online grocery store
  • most consumers (64%) are inclined to click onto the website of the supermarket chain they usually buy from in person

What people don’t like about buying groceries online

  • 30% of online shoppers cited delivery costs as the biggest cause of complaint
  • 18% said their greatest issue was receiving replacement items for products that were unavailable
  • 15% found uncertain delivery times their main bugbear

How much people spend when buying groceries online

  • More than half of consumers (58%) said they tend to spend less online than they would if they bought their groceries from a bricks and mortar store.
  • While a previous Canstar Blue survey found consumers spend an average of $138 per week when they buy groceries in-store, the average for respondents in this survey was a $130 spend on their weekly online shop.

“It’s worth remembering, said Canstar Blue, “that buying online arguably makes you less likely to impulse buy other products that perhaps weren’t on your shopping list in the first place. Shopping online could also make you more price-conscious and willing to select a cheaper option if it’s available. You could argue that shopping online allows you to pay closer attention to your spending, when it’s easier to get carried away in store.”

Read the results here: http://www.canstarblue.com.au/retailers/online-grocery/
Online shop image: by Namakkalshowroom (Own work) [CC BY-SA 4.0 (http://creativecommons.org/licenses/by-sa/4.0)], via Wikimedia Commons

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Is bigger better for Australia’s vegetable farms?

Australia’s vegetable growing industry generated approximately AUS $3.5 billion in gross value of production in 2013-14, with 5,300 agricultural businesses that produced vegetables for human consumption. The industry is represented by a large proportion of smaller-sized growers and fewer larger-sized growers.

The challenges and opportunities facing Australia’s smaller vegetable farms are among the issues covered in a discussion paper by industry body AUSVEG.

According to AUSVEG, Australia’s vegetable growing industry generated approximately AUS $3.5 billion in gross value of production in 2013-14, with 5,300 agricultural businesses that produced vegetables for human consumption. The industry is represented by a big proportion of smaller-sized growers and fewer larger-sized growers.

The paper analyses the financial performance of growers by farm size, concluding that the bigger a farm, the more profitable it is likely to be. “This is due to cash receipts increasing by a higher proportion than cash costs as farm size increases, which is exemplified by the costs to receipts ratio,” it says.

“However, the relative expenditure on particular cash costs as a share of total cash costs stays relatively the same for all farm sizes. For example, labour costs tend to constitute approximately a 17-20% share of total cash costs for all farm sizes.”

But there are risks associated with expanding farming operations which need to be considered and it is important to assess the return on investments from any substantial increase in scale of operations, it warns.

Bigger farms better able to dilute costs

Among the benefits for vegetable growers with larger farms is that they are better equipped to dilute their cash costs with the extra revenue received. Also, it tends to be the larger growers that export, providing another sources of revenue to mitigate risks through diversification.

“Australian vegetable growers have been facing a challenging business environment for many years now, with increasing production costs and low retail prices adversely impacting on grower margins. However, by embracing emerging technologies, exploring new avenues for revenue raising and having a forward outlook on business viability, vegetable growers should be able to improve upon their business outcomes,” the paper says.

Larger sized growers should invest in research and development to decrease labour costs, such as by increasing the efficacy of the technology available to them, and increasing their uptake of that technology, it advised.

AUSVEG spokesperson Shaun Lindhe said Australia’s vegetable industry is made up of businesses ranging widely in size, and “while the average profit across all vegetable-growing farms dropped to $39,000 in 2013-14, smaller operations – those under five hectares, and those between five and twenty hectaresactually lost money.”

Lindhe said the paper found that the costs to receipts ratio, which expresses average farm costs as a proportion of their receipts, is notably higher for farms of less than 5 ha compared to all other vegetable growing farms.

“While all vegetable-growing farms struggle with high cash costs, the data suggests that larger farms are in a better position to dilute these costs across their operations and can therefore achieve higher profits, both in relative and absolute terms. This kind of variability can skew analysis of the overall performance of the vegetable industry, making this discussion paper a valuable resource for any vegetable grower looking to gain an accurate idea of how they are performing compared to their immediate peers,” he said.

(The bottom 25%, middle 50% and top 25% categories are based on profiles of vegetable growing farms taking into account area grown, production and financial indicators. The bottom 25% category covers the smallest farm sizes with the lowest output and lowest financial performance.)

Figure 3 illustrates that variable costs for the middle 50% and top 25% of vegetable farms are roughly the same per ton, however the bottom 25% have a considerably higher variable cost per ton. It also shows that total costs decrease as farm financial performance (or farm size) increases and that there is a level of production where variable costs per ton (e.g growing, harvesting and packaging costs) actually decrease.

“This finding is important for smaller vegetable growers who are considering expanding their scale of operations. It provides evidence to suggest that both fixed costs (e.g. rates and interest payments) and variable costs (per unit costs) can both decrease as farm size increases, up to a particular level of production. Grower’s should factor in these decreasing costs when considering farm expansion as it can be an important cost saving in the planning phases of development and expansion,” the paper said.

“It can be seen in Figure 7 that hired labour is the largest cost of production for vegetable farms less than 5 ha in size, accounting for an almost 21% share of total cash costs in 2013-14 – an increase of approximately 71% in absolute terms since 2011-12.”

sources:
Analysing Australian vegetable growers’ financial performance by farm size

Cost challenges force smaller vegetable growers into the ‘red’

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Success in China for Aussie grape growers

Growers in the Australian Table Grape Association have nearly tripled their exports to China since 2014, with the volume rising from 7,000 tons to 20,000 tons.

Growers in the Australian Table Grape Association have nearly tripled their exports to China since 2014, with the volume rising from 7,000 tons to 20,000 tons.

The association, which represents grape producers across Australia, reports that of total production of 160,000 tons, 90,000 are exported. The main markets are Hong Kong, Malaysia, Indonesia, the Philippines, Singapore, Vietnam and other Asian countries.

“We also export our fruit to Japan and Korea; these markets have been expanding,” said Jeff Scott, the association’s CEO.

Talking about the growers’ success in selling grapes to China, Scott said the association has been participating in China FVF since its launch six years ago. “And three years ago our countries signed a relevant protocol, and we started to ship grapes to China. Now that country is the most rewarding market in terms of volume, because Chinese consumers like the taste and appearance of our grapes, and sales keeps growing, although the price is higher than for their domestic grapes.”

Australian Table Grape Association

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How Australia could sell more cucumber, cauliflower and other veg

Cucumber

Emphasise that vegetables like carrots and cucumbers make ideal raw, healthy snacks that can be eaten on the go.

And for other vegetables, highlight the benefits they bring to a meal – like the taste and nutrition of celery, or the variety that pumpkin adds.

These are among tips recently shared by the Australian horticultural body Ausveg, drawing on Nielsen Homescan data.

In a press release this month, Ausveg said Nielsen’s market research identified multi-million dollar opportunities for the Australian vegetable industry via areas with potential for growing vegetable consumption or that could benefit from better product positioning.

For instance, encouraging cucumber-buying households to buy cucumber as frequently as they did a year ago could achieve another (AUD) $4.8 million in sales value, Ausveg spokesperson Kurt Hermann said.

“In some instances, the industry could capitalise on already-increasing sales value – for example, we’ve seen an increase in the value of cauliflower sales on last year, and Nielsen have found an opportunity to gain a further $1.3 million in the senior couples demographic,” he said.

Read the release here.
Cucumber image: by Mgmoscatello (Own work) [CC BY-SA 3.0 (http://creativecommons.org/licenses/by-sa/3.0)], via Wikimedia Commons

 

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How Australia is tapping fresh produce opportunities in China

"Australia is in quite a nice position to be able to segment the market by focussing on being a niche market player rather than getting caught up against the big volume suppliers."

The importance of suppliers building long term trade relationships with China and adapting to its customers’ tastes was recently stressed by Loren Zhao, co-founder of the country’s rapidly-expanding online fruit retailer, Fruitday.

Speaking as part of the London Produce Show breakfast panel, Zhao singled out Australia and New Zealand as countries doing a good job in this regard. He said that in the future, China “will be consuming most of the global produce” and he said it is looking to these suppliers, which he said are already focusing on India and China. “It’s very important to grow products with the Chinese customer in mind.”

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Zhao said the US and Australia are spending a lot of money in order to change their fruit varieties and grow newer ones in response to demand from Chinese customers. “We see that they also want to invest for the market for us.”

“A lot of exporters just want to trade and they want to sell everything to China but other exporters want to cooperate…like Zespri and Sunkist,” he added.

Promising export future: Australian table grapes and citrus

Speaking to ED at the London show, PMA Australia-New Zealand CEO Michael Worthington said table grapes are a good example of where Australian growers are adapting to Chinese tastes.

“Australia is producing a lot of very good quality red and black grapes which the Chinese love. Crimson seedless has been a very successful variety, because it’s obviously seedless but it also has good Brix. There are some black grapes coming on to the market that have got a very high brix, so very much going for sweetness, which suits the Chinese palate,” he said

The Chinese very much buy on colour and a sweet taste, so I think Australia is in quite a nice position to be able to segment the market by focussing on being a niche market player rather than getting caught up against the big volume suppliers such as Chile” he said.

“On the citrus side, the Australian navel quality is very good – probably the best in the market – and well-recognised in China, and some of the mandarins that Australia is now producing also fit in very well with Chinese consumers because of their good colour and flavour.”

Screenshot 2015-07-07 at 12.28.29.png

“Another real positive is that grapes and citrus fit very well with online sales – you can make nice convenience packs of table grapes. And with online sales booming in China, this is a great area for a niche marketer such as Australia to supply.”

Aussie Cherries also popular in China

Tasmanian cherries provide another example of Australian fresh produce fitting very well with Chinese tastes, Worthington said. “Tasmanian cherries tend to be larger size, very high quality and coming from grower-marketers of a small enough scale that they can go very niche as opposed to being a mass supplier that’s always trying to shift big volumes.”

Hopes FTA will see new protocols expedited

Worthington said it’s hoped the recently signed free trade agreement between China and Australia will speed up quarantine protocols allowing more fruit varieties to be traded between the countries.

“There’s a number in the pipeline both ways, such as stonefruit from mainland Australia and I am confident that as direct trade builds up (as opposed to the traditional “grey channel” supply into China via Hong Kong), we will see more vegetable lines, such as broccoli and carrots, and products such as mangoes and avocadoes exported out of Australia.”

Efficient distribution: key to success in e-retail

On online sales, he said China is doing very well in its ability to get the produce to consumers. “I think in a lot of other countries, particularly western ones, that last mile of logistics is the biggest challenge to growing online sales, whereas in China they’ve got these multiple small distributors on motorbikes and bikes and everything else that can get the product to the consumer.

“It’s a mixture of finding the right product, that is of a high enough value, matched with a distribution system that’s very much more efficient, as opposed to trying to look at it just purely as a price point and keeping the cost of an online sale at or below what you’d pay if buying in a supermarket,” he said.

 

Relief map of Australia by Hans Braxmeier (http://www.maps-for-free.com/) [CC BY-SA 2.5 (http://creativecommons.org/licenses/by-sa/2.5)], via Wikimedia Commons

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Australia readies for its 2015 National Horticulture Convention

Screenshot 2015-06-11 at 16

The biggest event on the Australian horticulture calendar – the 2015 National Horticulture Convention – is expected to attract more than 1,400 delegates to Queensland’s Gold Coast from June 25-27.

The keynote address at the 2015 National Horticulture Convention, Trade Show and Awards for Excellence will be delivered by a legend of the US horticulture industry, Blair Richardson, who is president and CEO of the US Potato Board.

Now incorporating both AUSVEG and Apple & Pear Australia Ltd, other features of this year’s convention include the launch of a revolutionary new pest surveillance system that will help growers monitor insect populations. The Trapview Smart Trap System utilises innovative technology to provide a simplified solution for growers, agronomists and researchers to monitor the levels of various pest species in their crops.  

Of particular interest to apple and pear growers will be the Speed Updating full-day seminar on Thursday June 25, which gives local and international scientists 10 minutes to showcase their research for the pome fruit industry and how they can help apple and pear orchardists, and on the Friday, the Apple and Pear Variety Showcase will provide an opportunity to look at, try and discuss new varieties and brands of apples and pears.

Other convention highlights include the NextGen surfing session for growers aged under 35 and the Women in Horticulture: A Taste of Success session, both being held on Saturday June 27. APAL Chair Dr Michele Allan and innovative Tasmanian potato grower Susie Daly will address attendees at the highly anticipated Women in Horticulture event which celebrates the vital role women play in the Australian vegetable, potato, apple and pear industries.

To register, download the delegate brochure or register online, visit www.ausveg.com.au/convention.

For live updates during the event, look for #HortCon2015 on Twitter.

AUSVEG is the leading horticultural body representing more than 9,000 Australian vegetable and potato growers.

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Insights into Australia’s vegetable consumers

New research has found that Australian vegetable consumers can be divided into four groups, with their categorisation pivoting on whether they value taste over nutrition and whether they prefer exploring new options over sticking to their old favourites.

Are you a conscious improver, eager explorer, wholesome habits or flavour follower consumer?

Australia’s vegetable consumers can be divided into these four groups according to whether they value taste over nutrition and prefer exploring new options over sticking to their old favourites, new research suggests.

Health is the core driver behind the average Australian’s vegetable purchases, but the variety of vegetables they buy is determined by how much they prioritise each of those four key drivers. According to a news release by horticultural body Ausveg, the report, produced by market research agency Colmar Brunton, shows Australian vegetable buyers can be divided into the four roughly equal groups based on their personalities and the benefits they’re looking to get out of their vegetable consumption:

  • Conscious Improvers: consumers who love new things and nutritional benefits.
  • Flavour Followers: those who aim to buy what they already know they like.
  • Wholesome Habits: those who look for nutrition but prefer their staple vegetable choices. (These consumers value recommendations from family and friends, and place less importance on recommendations from media sources.)
  • Eager Explorers: buyers who value taste and explore new vegetables. (Nearly 60% of them get inspiration from cookbooks, and around a third of the same group say they take recommendations from media like MasterChef and Better Homes and Gardens.)

Kurt Hermann. Ausveg assistant manager for industry development, said taking the categories into account can provide better insight into what value Australian consumers looking for from their vegetables and where they get their inspiration.

“This data creates the opportunity for growers and other industry members to develop strategies that will connect with each segment and highlight the aspects of vegetables that they really care about.”

The report is part of a consumer and market research project funded by Horticulture Innovation Australia using the National Vegetable Levy and funds from the Australian Government. Ausveg represents more than 9,000 Australian vegetable and potato growers.

source: Ausveg