Reflecting on 25 years of change in the FMCG sector

Reflecting on 25 years of change in the FMCG sector

With leading New Zealand European food importer, William Aitken & Co, turning 70 this year we spoke to its Sales and Marketing Manager Troy Culpitt reflecting on his 25 years in and around the FMCG sector.

Forty-six year old Troy Culpitt first cut his teeth in the supermarket sector in the early 1990s with 3 Guys Ltd, where he rapidly graduated to become a store manager. It was experience which Troy says still helps him with his role today.

He then went on to different senior sales roles in the FMCG sector. Since 2012 he’s been with Auckland-based William Aitken & Co working closely with Managing Director Graham Aitken and Graham’s son, Sam.

Troy is committed to this four generation family-owned business and speaks about the likes of olive oil with great passion and product knowledge. One of the biggest changes in the New Zealand culture he says is Kiwis’ growing and insatiable taste for Mediterranean food and lifestyle.

“When I started out in supermarkets over 20 years ago it seemed about 95% of oil was vegetable, salad, and cooking oil. Now when you look at shelf space, up to 50% of it is taken up by olive oil. Its growth has been huge and we’re now also seeing products like rice bran oil & coconut oil taking off.”

William Aitken has long been the exclusive importer of Lupi olive oil which along with many other international brands has benefitted hugely from a global health renaissance. Troy says in the last 20 years people have woken up to the concept of good fats and bad fats. Doctors have helped by steering people away from animal fats, and celebrity chefs like Jamie Oliver are seen pouring olive oil on everything while espousing its merits.

“As well as its health advantages, people are also appreciating olive oil’s taste more and more, which is great. In a lot of ways the extra virgin varieties are a lot like fine wine as people chase the richness and depth of flavour. And let’s not forget, olive oil’s taste is also dependent on the growing conditions. Lupi Olive Oil is blended to give you consistent flavour profile year by year.”

Overseas trends are towards high end oils that show PGI (Protected Geographical Indication). This guarantees the oils come from a specific region & provide a flavour profile typical of that area.

Troy says while William Aitken & Co are food importers, they support the concept of a burgeoning local olive oil industry as there’s plenty of room for both local and overseas product.

“People love being able to support local suppliers, local markets and buying at the cellar door when they’re away for the weekend. However the local industry is limited from a grocery perspective just because it’s hard for them to deliver the volume and compete on price and product consistency. The biggest New Zealand player is Village Press and they do really well but the reality is that all the local olive oil product only adds up to single figures when it comes to supermarket trade.”

Troy says the global price of olive oil changes monthly and importers are currently experiencing the highest buying price in three years due to volumes being affected by factors such as drought in Spain and olive groves in Italy being destroyed after being struck by a bacteria strain. Subsequently shoppers in New Zealand can expect price increases.

“Since the Global Financial Crisis, people have primarily been buying on price but what we’re also noticing in the FMCG sector is that people are increasingly prepared to pay a premium if they can be guaranteed the source of origin, or it’s Fairtrade, or organic, or gluten free, proceeds go to a charity or back into a community, or whatever. I call it the guilt-free movement and believe me it’s alive and well and most producers and suppliers are in there boots and all because such a differential can easily command a bigger margin.”

Troy says the likes of gluten-free products that used to only ever reside in their own category corner of a supermarket are now promoted right through a store with many people now buying them not suffering from any intolerance whatsoever. The guilt-free movement is very much now owned by the majority in the mainstream.

“I don’t pretend for a second that New Zealand’s now just full of foodies that want to live a guilt-free life. In reality most oils sold are just plain old cooking oils to grease the pan or deep fry in. However in saying that many Kiwis’ pantries are now home to several types of oils including olive, canola, and rice bran and they mix and match depending on the need and taste required.”

Another trend Troy has noticed during his 25 years in the FMCG sector is the move away from pouring so much money into consumer advertising. These days more money and time is directed into slashing the margins and supressing the price. Troy notes that with so much choice these days and with sluggish economic growth for nearly a decade, 59% of all groceries bought in New Zealand are bought on sale.

“It’s getting tougher and tougher for new products to get onto the supermarket shelves and again the little local suppliers struggle to compete at this level. Technological advances and how we best connect with our customers is an ongoing debate. Unlike fashion we’re not being so knocked around by online shopping, but who knows where this is all heading.”

Also getting tougher for suppliers and distributors is managing product reputation. With the likes of social media and 24/7 consumer feedback via very public forums, things can get blown out of proportion very quickly and product image can be destroyed off the back off one person’s bad experience, he says.

Troy says a big part of any food manufacturer’s budget now is fulfilling health and safety regulation, quality control, and ensuring traceability. While that comes at a huge ongoing operational cost, such measures have been great for consumers who demand more knowledge and more certainty.

Troy says that former Food Safety Minister Nikki Kaye’s announcement this year that New Zealand would adopt a new Health Star Rating food labelling system struck a good balance as it is voluntary and potentially gives consumers the ability to better identify nutritional value of the product as a whole, at a glance.

“William Aitken & Co has been around since 1944 largely because the company has always been receptive and nimble to change. Our founder, the late Bill, spotted a growing appetite for Mediterranean food after the war and since then we’ve had to run to keep up with the daily changes and challenges that the FMCG sector provides. It’s an exciting business and what I love about it is you never know what a new day will bring.”

www.williamaitken.co.nz

ENDS

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