The last six months have been very interesting, with the broad economy recovering strongly. It has been tough in the FMCG industry however, with many companies experiencing weak results, particularly over the Christmas period, with some having difficulty up to the end of February.
Coles seem to be acting very aggressively towards suppliers, and given the continuing influx of UK experienced executives, this strategy is set to continue. Woolworths appear to be extremely concerned about Aldi’s growth in the Australian market, and negotiations with the retailer have been challenging for many of our customers. Costco is making a small dent in the marketplace, however we won’t know the extent until their national store rollout gets under way.
Poll Results
1. What is your overall outlook for 2010 for your business?
| Extremely positive | 7% |
| Positive | 64% |
| Neutral | 22% |
| Concerned | 7% |
| Extremely concerned | 0% |
2. What do you think is your greatest opportunity for 2010?
| Market consolidation | 14% |
| NPD | 31% |
| Reducing Costs | 4% |
| Relationship with retailers | 38% |
| Help from Government | 0% |
| Costco’s entry to the Market | 0% |
| Brand Momentum | 13% |
| Gaining Share | 0% |
3. What concerns you most in 2010?
| Global economic outlook | 0% |
| Domestic market | 32% |
| Debt/Financing | 4% |
| Government regulation | 14% |
| Keeping talent in tough times | 14% |
| Exchange rate issues | 7% |
| Other | 29% |
4. Will you be increasing / decreasing / keeping constant your staff numbers in 2010?
| Increasing | 21% |
| Decreasing | 29% |
| Static | 50% |
5. Will you be concentrating on investing in your business or reducing costs in 2010 or a hybrid of both?
| Investing in business | 29% |
| Reducing costs | 10% |
| Hybrid of both | 71% |
6.If you are a multinational, have you been asked to reduce costs in line with the local market or above what is necessary / helpful locally?
| Global market | 14% |
| Local market | 43% |
| N/A | 43% |
7. How would you rate that Government’s relationship with FMCG manufacturing?
| Strong | 0% |
| Encouraging | 14% |
| Neutral | 29% |
| Concerning | 7% |
| Weak | 50% |
8. What are some of the things you wish Government would do to help the FMCG industry?
| Reduce regulation complexity | 50% |
| Provide support for graduate programs | 7% |
| Provide support for innovation | 14% |
| Other | 29% |
9. Do you think the industry is in line with what is needed re the obesity debate?
| Yes | 36% |
| No | 64% |
10. How would you rate your relationship with:
Woolworths?
| Strong | 43% |
| Encouraging | 43% |
| Neutral | 0% |
| Discouraging | 7% |
| Weak | 0% |
| N/A | 7% |
Coles?
| Strong | 14% |
| Encouraging | 43% |
| Neutral | 7% |
| Discouraging | 22% |
| Weak | 14% |
| N/A | 0% |
Independents?
| Strong | 36% |
| Encouraging | 36% |
| Neutral | 14% |
| Discouraging | 7% |
| Weak | 0% |
| N/A | 7% |
Aldi?
| Strong | 14% |
| Encouraging | 29% |
| Neutral | 14% |
| Discouraging | 0% |
| Weak | 0% |
| N/A | 43% |
Costco?
| Strong | 29% |
| Encouraging | 14% |
| Neutral | 7% |
| Discouraging | 0% |
| Weak | 7% |
| N/A | 43% |
- Comparing this poll to our 2009 mid-year poll generally, positivity is down slightly, with many CEOs expecting a flat to low-growth period.
- In terms of opportunities, NPD and relationships with the retailers continues to lead, but ‘brand momentum’ has slipped by almost 10%.
- Over 20% of employers expect to increase their workforce this year, as opposed to 10% in July. However, almost 30% expect to decrease their workforce, with 15% in July saying that there would have to be job cuts.
- 50% of CEOs said that the government’s relationship with the FMCG industry is weak, down from 60% in July.
- Woolworths and the independents continue to vote well in terms of relationships with suppliers, and Coles continue to rate the most discouragingly.
- An interesting piece of data is that those CEOs who responded that their relationship with Coles is ‘encouraging’ has grown over 10%, perhaps contrary to some other suppliers’ experience.
- The exchange rate continues to hamper exporters, but has been helpful for multinational businesses which need to report in US or UK currencies.
Touchstone specialises in senior executive search for the FMCG industry, in the top three tiers of leadership, for example:
- Chief Executive Officer, Managing Director, Head of Sales; National Business Managers, Head Of Marketing; Group Marketing Managers, Head of Finance/CFO; Financial Controller, Head of Risk, Head of Audit, Head of Human Resources; Head of IR, Head of Remuneration, Head of Operations Chief Operating Officer, Manufacturing Director, Quality Director, Engineering Director.