Supermarket giants Coles and Woolworths say that major food manufacturers are overlooking the lucrative premium grocery category, resulting in the retailers stocking the shelves with their own premium private label brands.
Tjeerd Jegen, managing director of Woolworths said that there was a significant gap in the market for high quality artisan-style products to cater for the increasing demand from higher-income consumers that grocery manufacturers failed to fill.
“The market is big enough for more premium brands but we’re not seeing too many of them jumping on it,” Jegen told The Australian Financial Review. “The bigger companies are not innovating at a rate we’d like to see them innovate.”
Jegen says that it is the smaller food manufacturers more often than not that are leading the way
“My experience so far in Australia is that smaller manufacturers are more innovative and taking more risks,” said
John Durkan, chief operating officer for Coles echoed Jegen’s sentiment stating that a lack of innovation amongst leading manufacturers led to the gap in the market.
“The pipeline for new products offered by global food manufacturing has been very slow in bringing new products to Australia,” Durkan said.