20 Nov, 2020
DoorDash to deliver goods from The Reject Shop within a day
Inside Retail

Australian discount variety store The Reject Shop has teamed with DoorDash to offer a same-day goods-delivery service. 

The Reject Shop has diversified over the years to expand its offer from general merchandise into low-priced essential products, including grocery, snacks, pet care, garden, party wares, cleaning supplies, toiletries and other household items. Customers now can order from its stores via the DoorDah app, with orders delivered in as little as 45 minutes.

“The DoorDash partnership allows The Reject Shop to trial an online offering quicker than we planned and with minimal capital investment,” said Andre Reich, CEO of the retailer.

“It is a customer-centric offering that provides new and existing customers with a choice around how they wish to shop with us, which has become increasingly important this year.”

According to the company, the collaboration marks DoorDash’s largest retail partnership in Australia on its marketplace. Both brands plan to expand the number of stores that offer online same-day delivery with South Australia coming online from this month.

To celebrate the partnership, customers within range of the 120 The Reject Shop stores will enjoy free delivery for orders from $20. The promotion will last until November 8.

20 Nov, 2020
Coca-Cola Amatil shares rise as investors anticipate higher bid
Financial Review

Coca-Cola Amatil is canvassing the views of investors and crunching shareholder numbers amid growing opposition to Coca-Cola European Partners' $9 billion offer.

The Australian beverage giant's shares have risen to their highest level since February amid rising speculation CCEP may have to lift its $12.75 a share offer to win over investors who believe the bid undervalues the company.

CCA shares rose 11¢ or 0.9 per cent to $12.69 on Monday. About 16 million shares changed hands during the session, after a fourth shareholder, Dublin-based Setanta Asset Management, said CCEP's offer was opportunistic and the $12.75 a share cash offer (which will be reduced if Coca-Cola Amatil declares a final dividend) materially undervalued the business.

The stock is now trading 6¢ below CCEP's offer price, suggesting that investors believe CCA will not pay a final dividend, that CCEP will lift the offer to overcome shareholder resistance or that the offer is guaranteed to succeed at the current price.


Coca-Cola Amatil's independent directors, led by CEO Alison Watkins, left, and chairman Ilana Atlas, may have been premature in recommending CCEP's offer.  James Brickwood

Even after taking into account record low interest rates and the time value of money it is rare for a target's shares to trade so close to the bid price almost four months before shareholders are due to vote on the offer, which is through a scheme of arrangement.

CCA's independent directors, including chairman Ilana Atlas, and group managing director Alison Watkins, have said they will unanimously recommend that shareholders vote in favour of the scheme of arrangement, in the absence of a superior offer and subject to an independent expert concluding the scheme is fair and reasonable and in the best interests of independent shareholders.

Whether the independent directors stick to that recommendation in the face of growing shareholder opposition will depend on several factors over the next few months, including the company's full-year results in February, whether equity markets continue to rise and whether an independent expert deems the offer fair and reasonable.

As reported on Sunday, Setanta has urged CCA to go back to the negotiating table with CCEP to secure a better price for independent shareholders.

“The offer from CCEP fails to take into account the successful transformation program that is already under way in [Coca-Cola Amatil's] Australian beverages division, in addition to the strength of the business in New Zealand and growth potential in Indonesia," said Fergal Sarsfield, Setanta senior portfolio manager.

Scheme of arrangement

"Amatil’s management team have worked tirelessly to develop the company and the offer of $12.75 per share does not reflect the strength and value of the business."

Setanta owns 19.25 million CCA shares representing 2.65 per cent of the stock on issue, and 3.84 per cent of the shares not owned by The Coca-Cola Company.

Martin Currie Australia, Antares Capital and Pendal Group have also said the offer, through a scheme of arrangement, undervalues CCA.

Together, the four fund managers are estimated to account for 9 or 10 per cent of Amatil's shares, or 13 to 14 per cent of the shares not owned by The Coca-Cola Co.

The scheme of arrangement requires 75 per cent approval from independent shareholders, so the deal could fall over if only 17.3 per cent of the shares on issue were voted against the offer.

Some analysts and investors believe CCA's independent directors acted prematurely in recommending the offer.

Volumes rebounded

"The board approval seems somewhat premature but we estimate that CCEP may not have made the indicative proposal public without such a step from [Amatil]," JP Morgan analyst Shaun Cousins said in a report.

Unveiling the offer last month, CCEP said the price represented a 38 per cent premium to the three-month volume weighted average price and was 27 per cent higher than the average broker 12-month price target.

But Mr Cousins said analysts would have lifted their price targets after CCA's October trading update, which revealed that beverage volumes had rebounded in the September quarter and in October – rising 11.8 per cent in NSW – as consumers started venturing from their homes.

The bottler also announced another $15 million in cost savings, taking total annual cost savings by 2022 to $145 million.

Mr Cousins said on Monday he retained his view that the CCEP offer was too low.

"The next catalyst will be the full-year result in February, which is expected to provide further evidence of a recovery due to increased mobility, and coupled with the recently upgraded cost saving target, could indicate to a broader range of shareholders that $12.75 is not the right price," Mr Cousins said.

20 Nov, 2020
Bunnings, Officeworks start FY21 off with a bang for Wesfarmers
Inside Retail

Wesfarmers continued its strong performance in FY20 into the beginning of the new financial year, delivering growth across almost all of its stable of retail brands in the year-to-October.

Home and hardware business Bunnings saw sales grow 25.2 per cent during the period, while Officeworks grew 23.4 per cent.

Catch Group, which was purchased in July of 2019, delivered gross transactional value growth of 114.4 per cent in the year so far due to the increasing consumer movement online.

Kmart Group, however, didn’t fare as well as Wesfarmers’ other businesses, with Kmart itself delivering sales growth of 3.7 per cent and Target seeing sales fall by 2.2 per cent.

Work is underway to address the continued underperformance of Target, Wesfarmers noted, with nine large format stores converted to Kmart stores and six Target Country stores converted to K Hub stores during the year to date.

“Despite the challenging operating environment, the results across the Group’s retail businesses reflect their continued focus on meeting the changing needs of customers and delivering greater value, quality and convenience while providing safe and trusted environments for customers to shop,” said Wesfarmers managing director Rob Scott.

“The trading restrictions in Melbourne were difficult for team members and customers, and it is encouraging to see progress with the reopening of stores over recent weeks. As a result of significant pent-up demand, the trading performance across stores in Melbourne has been very strong since they re-opened to retail customers.”

18 Nov, 2020
'Craig Kelly can shove it up his clacker': The solar industry is cheering on Woolies' 100% renewable energy commitment, as business takes the lead on clean power
Business Insider Australia

Australia’s largest supermarket, and one of its largest energy users, has pledged to go green within just five years.

How animators light scenes in 3D-animated movies

Lighting is essential in 3D-animated films for a few reasons: It tells the time of day, makes objects appear more lifelike, and can even convey...

Woolworths has revealed it has signed on to the RE100, a global initiative committing big business to use 100% renewable energy by 2025.

“We use around one per cent of Australia’s national electricity, so we have a unique opportunity to use our scale for good and make a real impact,” Woolworths Group CEO Brad Banducci said.

“We believe this will not only be a positive for our business but also contribute to a better tomorrow by making green energy accessible to more Australians.”

It makes the supermarket giant just the 14th Australian company to take the pledge, joining a string of banks including Suncorp, Bank Australia, Westpac, Macquarie, NAB, ANZ, and the Commonwealth Bank.

Australian tech giant Atlassian is also a member of the club, as well as insurer QBE, and property groups Dexus and Mirvac. With the addition of Woolworths, the 14 represent a collective market cap of $470 billion.

“With Woolworths joining RE100, we expect that this will trigger a domino effect across Australia, with many more businesses stepping up to transition to 100% renewable electricity,” RE100 Australian coordinator Jon Dee said.

While Aldi has committed to do so by 2021, it makes Woolworths the first Australian supermarket to do so. By comparison, Coles’ largest pledge to date is a 90% renewable target for its Queensland stores over the next five years.

Lindsay Soutar, energy campaign director at Greenpeace Australia, said put simply, “what Woolies does matters”.

“There are over 1000 Woolworths supermarkets and metro stores, and 3000 stores across the group including Big W and Dan Murphy’s, which employ more than 215,000 people. Woolworths Group going 100% renewable puts solar and wind power at the heart of Australian communities across the country,” she said.

Woolworths commitment to create jobs and pressure politicians

The company’s addition will be seen as adding more pressure on the business community to review their own energy plans. Perhaps more significant however will be the shot in the arm it will give the renewable sector.

“Over the coming years, we’ll invest tens of millions of dollars into renewable energy partnerships and prioritise new green energy projects to spur growth in the industry and new jobs in the sector,” Banducci said.

Nigel Morris, head of business at Software company Solar Analytics, applauded the move as ‘hugely exciting’ and said it would help to create a great deal of momentum for the renewable industry.

“Businesses don’t do anything flippantly. When they commit to something like this, consumers see it and it inspires a huge amount of confidence in the whole sector,” Morris told Business Insider Australia.

“With Australian companies like Woolworths and Bunnings joining the likes of Walmart and Ikea globally, it tells you that solar has absolutely come of age and it sends a really powerful message that the renewable transition makes enormous business sense.”

As employers worked from home during the pandemic, Morris said residential solar work had boomed while other parts of the sector hadn’t fared nearly as well.

“Over the last six to twelve months, commercial and large scale installers have really suffered so this will give them a real boost of confidence to invest and hire,” Morris said.

“This will mean more jobs, especially in regional and rural areas where solar businesses are really overrepresented. It’ll help get them up and running again.”

It’s perhaps lucky that business is doing the legwork, given both sides of the political aisle have dragged their feet on climate and energy policy for the last decade.

Just this week Labor minister Joel Fitzgibbon stood down from the frontbench over a disagreement on climate change, while Liberal MP Craig Kelly this year went through old data from the Australian Bureau of Meteorology in an effort to try and disprove climate change – coincidentally, here’s the rebuttal to that tenuous argument.

“Our politicians should take notice of this and get behind renewable energy because it’s not a rort. The simple fact is the coal industry is in decline but we can create jobs during the transition period through clean energy,” Morris said, noting that Australian politics was “playing catch up to the real world.”

“Craig Kelly can shove it up his clacker.”

18 Nov, 2020
Gen Z is set to take over the economy in a decade, despite potentially losing $10 trillion in earnings because of the pandemic
Business Insider Australia

In a little over a decade, Gen Z will be taking over the economy.

Gen Z currently earns $US7 trillion across its 2.5 billion-person cohort, according to a Bank of America Research primer on the generation, called “OK Zoomer.” By 2025, that income will grow to $US17 trillion, and by 2030, it will reach $US33 trillion, representing 27% of the world’s income and surpassing that of millennials the following year.

The report defines Gen Z as those born between 1996 and 2016. The oldest of Gen Z turn 23 in 2020, and the oldest millennials turn 39 this year. The youngest generation has the fastest-growing income, per the report, led by the US, closely followed by China.

This earnings growth is short of what it would be without the pandemic, of course. Gen Z students could lose $US10 trillion of lifecycle earnings due to Covid lockdowns, the World Bank has estimated.

Repeating millennials’ rocky career paths

American Gen Zers and millennials have been financially hardest hit in the coronavirus recession, suffering from unemployment rates greater than those during the peak of the Great Recession. But Gen Z is repeating the same rocky start to their careers as the oldest millennials: graduating into a recession.

Stanford research shows that recession graduates typically see stagnant wages, lasting for up to 15 years. The author behind this research, Hannes Schwandt, assistant professor at Northwestern University’s School of Education and Social Policy, previously told Business Insider that this the delay in wealth accumulation isn’t necessarily due to lack of jobs, but that recession graduates typically start at “lower quality” jobs.

A potential upside to this, Schwandt said, is that graduates job-hop to play financial catch-up, which can make them more flexible and help advance their career.

“Over time, what you see in these cohorts is a higher degree of mobility from one employer to the next,” Schwandt said. “It helps them climb up the quality ladder.”

Gen Z may want to look to millennials for an idea of what’s to come, as the so-called “job-hopping generation” graduated into the 2008 financial crisis, then entered the 2020 recession before their oldest members turned 40 years old. Now, before the economy has even recovered from the effects of the pandemic, millennials have just another decade left as the major driving force of the economy.

12 Nov, 2020
Shareholders knock the stuffing out of Inghams board
Financial Review

The board and management of poultry producer Inghams Group have had their wings clipped by shareholders even as the stock soared on the back of a business update and talk of a turkey-led sales boost this Christmas.

Inghams suffered a first strike on its remuneration report on Thursday and shareholders also rejected board plans to pay chief executive Jim Leighton a bonus after a tough year for the company.

More than 50 per cent of votes went against both the remuneration report and the bonus payment.

The shareholder rebuke came as Australia’s leading chicken and turkey producer said it expected to benefit from an extra million bums on seats for Christmas dinner this year with travel curtailed by the COVID-19 pandemic.

A business update that included details of a sales rebound and prospects for lower costs saw the Inghams share price jump about 16 per cent to $3.30.

Chairman Peter Bush revealed Inghams would bow to a request from AustralianSuper, its biggest shareholder, to provide more detail on the expertise of board members.

Mr Bush told the company’s virtual annual meeting that AustralianSuper wanted “better knowledge and understanding of the detail of our directors’ backgrounds, particularly their experience as it applies to the Inghams’ board”.

AustralianSuper made its views known during an independent review of board composition and performance.

Inghams board members and management faced a grilling from the Australian Shareholders’ Association leading up to the annual meeting and were prepared for the remuneration report protest vote.

Mr Bush said the board took the investor feedback “extremely seriously” and would continue talks with shareholders on the remuneration issue.

Global buyout giant TPG, which floated Inghams on the ASX in late 2016, divested its remaining 9.9 per cent stake in August soon after the company reported annual earnings before interest, tax, depreciation and amortisation of $209 million – 2 per cent below market consensus – and a 4.4 per cent fall in net profit to $103.2 million.

The results came in a year when Inghams faced the triple whammy of drought, a close shave with bushfires and COVID-19.

Inghams said on Thursday that poultry demand had strengthened, with trading volumes in the first quarter of 2020-21 up 6.3 per cent on last year's September quarter and 7.5 per cent up on the June quarter.

Mr Leighton said the company had reduced poultry inventory levels by $16 million in the first 17 weeks of 2020-21 and would look to continue to reduce the COVID-19 build-up supported by Christmas demand.

"Its predicted there will be a 4 per cent boost of another one million people around the Christmas table this year due to travel restrictions," he said.

"The retail food sector is, therefore, likely to benefit."

Inghams is also counting on feed prices – which soared during the drought – softening with Australia in the middle of harvesting a bumper grain crop.

12 Nov, 2020
Youfoodz IPO heats up as Nestle enters ready-made meals market
Financial Review

Ready-made meals maker Youfoodz says Nestle's $US1.5 billion ($2.1 billion) acquisition of US-based chilled meals start-up Freshly highlights the growth potential of the sector as time-poor consumers demand more convenience.

Nestle revealed on Friday it had acquired Freshly for $US1.5 billion – $US950 million upfront plus performance-based earnouts of up to $US550 million – so it could test the burgeoning ready-made meals market.

“Consumers are embracing e-commerce and eating at home like never before,” Nestlé chief executive Steve Presley said. “It’s an evolution brought on by the pandemic but taking hold for the long term."

"When you have players such as Nestlé investing in this sector it demonstrates again how hot the sector is," said Youfoodz founder and chief executive Lance Giles, who is taking the former family-controlled company public through an initial public offering.

The $70 million bookbuild for the initial public offering was covered last week at $1.50 a share, valuing the Brisbane-based business at about $202 million, or 1.1 times gross revenues of $200 million. A retail offer opens next Monday.

Nestlé's Freshly deal implies a multiple of 2.2 to 3.4 times revenues, reflecting a control premium and the strong growth in the business. Freshly ships more than one million meals a week to customers in 48 US states and is forecasting sales of $US430 million this year.

Youfoodz, which makes 400,000 ready-made meals and snacks a week from its three facilities in Brisbane, is forecasting net revenues (after discounts and rebates) to grow 17.7 per cent this year to $149.9 million.

It expects to make its first profit in years, earning $500,000 before interest tax depreciation and amortisation after racking up accumulated losses of about $60 million over the last eight years.

Youfoodz chairman Neil Kearney, a former Goodman Fielder, National Foods and Warrnambool Cheese & Butter executive, said the multiple paid for Freshly was indicative of the value Youfoodz could achieve once it was trading more profitably and had moved into a new automated production facility.

"The multiples we receive in the marketplace have potential to move towards that level," Mr Kearney said. "There's no doubt the potential growth of the business like this over the longer term will ensure it is likely to trade at quite a reasonable multiple."

Mr Kearney said there was scope for Nestlé to establish Freshly in Australia, but there was also potential for the Swiss-based consumer foods giant to make a local acquisition. In that case, Youfoodz could become a target.

About $15 million of the IPO proceeds will be used to fund the construction of the custom-built facility, which is expected to be operating by 2022-23 and will enable the company to lift production to about 1.1 million meals a week.

About $25 million will be used to repay a loan from 77 per cent shareholder RGT Capital, which was taken out last year to pay tax debts and restructure the business. Most of the balance, about $24 million, will be used to fund further growth and increase marketing.

Mr Kearney, who took the chair last month, said legacy issues such as the company's problems with the ATO and disputes with unions over allegations of unpaid wages and bullying had been dealt with by new management and new systems and governance processes had been put in place.

According to Youfoodz' prospectus, the Australian and New Zealand ready-made meals market is worth $3.2 billion and is growing by about 11 per cent a year.

While more people were cooking at home during the pandemic, boosting sales at Coles and Woolworths and meal kit companies Marley Spoon and HelloFresh, more consumers were also becoming accustomed to having food delivered, Mr Giles said.

"I feel the market is shifting this way towards food delivered to people's doorsteps, whether it's meal kits or ready-made meals – it's a really hot sector and it's growing at a rapid rate."

Youfoodz, which currently sells directly to consumers through its website and through retailers such as Coles, IGA, 7-Eleven and BP, plans to launch a subscription offer early next year to improve customer retention. Ready-made meals and meal-kit businesses have high churn rates and customer acquisition costs are expensive.

"COVID has changed consumer behaviour forever, particularly in the food delivery space," Mr Giles said. "We’re in a really good spot."

12 Nov, 2020
Aussie cheesemaker Coolamon Cheese Co's brie won an international award – and the judges had no idea it was lactose-free
Business Insider Australia

In August, Hyundai Australia announced it would be giving its 2020 advertising budget to three small businesses who needed it more. Artisan cheesemaker Coolamon Cheese Co is the first company to receive the generous offer.

Hailing from the NSW town of Coolamon, this year has thrown a number of difficult obstacles at the small business, forcing them to close their main public-facing venue. “After clearing many hurdles since opening the business, 2020 will be remembered as the year revenues dropped through the floor,” general manager Keiran Spencer told Business Insider Australia.

“Our cheesemaking, cheese tasting and cheese tour revenues were lost. Many of our wholesale customers also running cafes/restaurants were gone – and of course, even revenues from farmer’s markets and food festivals were gone.”

While the business wasn’t directly subjected to 2020’s Black Summer bushfires, it did see a huge reduction in the number of travellers passing through the region, affecting sales. On top of that, successive seasons of drought reduced cafe and restaurant trade from a local perspective.

“Then came the pandemic and we have struggled on thinking it might be the death-knell for us,” Spencer said. “COVID-19 has had an undeniable impact on our business as it has with other businesses, including the businesses that buy from us. It is by far the biggest impact on trade in all departments. Retail and wholesale sales were down by up to 92% during COVID restrictions. Many of our wholesale customers had to close their doors during those restrictions. This had a flow-on effect to our wholesale revenue.”

“Making the decision to outsource our café/restaurant and having to let go of our 15 staff members, many of whom were locals, was not an easy decision. A number of them had been with us for a number of years since opening — it was gut-wrenching.”

Coolamon Cheese Co was established in 2015 with qualified microbiologist Barry Lillywhite, the business’s founding cheesemaker and Coolamon resident. With decades of cheesemaking experience under his belt, Barry was keen to start an artisan cheese business of his own. Thanks to the help of Junee Licorice and Chocolate Factory founder Neil Druce, the pair devised an agritourism venture that included the making of artisan cheese, cheese factory tours, cheesemaking classes, a retail outlet and a café/restaurant all within the same facility.

With a grant from the Murray Darling Basin Regional Economical Diversification Program and help from the Coolamon Shire Council, they were able to bring their dream to life in a heritage building on the main street of the NSW town.

“The local community got strongly behind Barry & Neil, not only in offering practical help during the construction of the cheesemaking facility and the re-fit of the interior of the building for the café/restaurant, but also by the fact that a core of the local community agreed to become investors in the business,” Spencer said.

“Barry is now happily retired but not before handing over the reins to Jennifer Nestor — an experienced artisan cheesemaker from Victoria who was delighted to move to the Riverina and step into Barry’s large, ‘food complying’ gumboots. Jennifer has since gone above and beyond expectations in challenging cheese frontiers.”

Winning Hyundai’s Take A Load Off competition — a $52,000 bespoke advertising package taken from Hyundai’s own advertising budget — has given Coolamon Cheese access to services they “could only dream of before”. Not only that, it’s given the business a chance to bring its lactose-free range to the market, a secret weapon that truly separates Coolamon apart from the competition.

“We identified a niche market that wasn’t being serviced in Australia,” Spencer said. “The lactose-free milk market has seen significant growth over the past five to six years, though this has not translated into dairy cheese products that are lactose-free, and definitely not hand-crafted cheese.”

“Research showed us that investment was needed because of the significant rise in lactose sensitivity and intolerance in the community. We knew if we could make this cheese then the product would be the only artisan/lactose-free/dairy-based cheese in Australia — with few examples in the rest of the world either.”

After complex experimentation and taste trials, they pulled off a result so similar to the real thing, Coolamon was awarded a bronze medal at the World Cheese Awards in Bergamo Italy in 2019 for its lactose-free brie. What makes that feat even more impressive is that the judges had no idea they were tasting lactose-free cheese.

“We decided to submit our lactose-free Brie in the traditional Brie category,” Spencer said. “In other words, without letting on that the cheese was actually a lactose-free variant of our Brie. So you can imagine how elated we were to be awarded a bronze medal in an international Cheese Award — a competition category open to French, Italian and other cheesemakers from other countries who are famous for their artisan cheeses.”

Launching this product into the marketplace by the end of the year is Coolamon Cheese’s biggest goal but admits the business will be forced to do more with fewer resources for a little while. “We have in our sights a goal to significantly increase our brand-awareness too, as well as our reputation as a premium artisan cheesemaker,” Spencer said.

“We feel that the Take A Load Off competition will be the launchpad to a greater goal — that of making ourselves the number one hand-crafted, dairy-based, lactose-free cheese brand in Australia. Of course, part of that will be to expand our ranges in all products, including the Coolamon Cheese Co lactose-free range.”

“Instead of seeing our business on the slippery slide, we can now look forward to staying in business and achieving all of that. So we say a tremendous thank you Hyundai.”

Coolamon Cheese Co make a range of artisan cheeses by hand, from the lactose-free double brie to soft and hard blue cheese and a unique collection of native ingredient cheeses. You can support the company and see its full range of products right here.

5 Nov, 2020
Woolworths sales up 12 per cent ahead of holiday season
Inside FMCG

Woolworths Group rode its strong FY20 trading into the beginning of FY21, delivering first quarter sales results 12.3 per cent up at $17.9 billion, and online sales growth of 86.7 per cent at $1.5 billion.

And with Christmas only 50 days away the group is anticipating a “very different” holiday season, but aims to deliver the opportunity for customers to enjoy the spirit of the holiday in a Covidsafe way.

“It has been a pleasing start to FY21, with all retail businesses delivering strong sales growth and customer metrics remaining solid,” said Woolworths Group CEO Brad Banducci.

“Covid costs remain material as we continue to prioritise the safety of our customers and team but have moderated as we become more efficient at operating Covidsafe.”

The cost of running Covidsafe businesses has decreased over time for Woolies, now only making up 1 per cent on sales, compared to 2 per cent in Q420.

And, while back payments to underpaid staff members are still ongoing, Woolies expects to have finished the majority of payments by the end of the first half. The remainder, which will be made to Dan Murphy’s and BWS team members, will be finalised in the new calendar year.

Australian supermarkets

In Australia, the business’ supermarkets saw sales in-store grow 9.2 per cent on the same time last year to $10.6 billion, while online sales doubled to $961 million.

However, the group’s Metro stores saw a decline of 5.1 per cent to $235 million as CBD foot traffic continues to be lighter than average.

“Freestanding and neighborhood stores continue to outperform with sales growth in major shopping malls and city locations still impacted by customer preferences to shop locally,” the business said.

“Sales continued to benefit from Covid-driven higher in-home consumption as well as the success of Disney+ Ooshies. Sales growth in Victoria was approximately 20 per cent in the quarter due to the more stringent restrictions in place.”

New Zealand supermarkets

Woolies’ New Zealand counterpart Countdown saw sales grow 6.9 per cent during the quarter to NZ$1.8 billion, while online sales rose 50.5 per cent to NZ$224 million.

Sales growth was primarily driven by items-per-basket growth, and the quarter saw a third dedicated e-commerce fulfilment center in Wellington and introduced in-app online shopping – helping push online grocery sales.

A “short-lived sales increase” occurred in August when a number of new Covid-19 cases were reported in New Zealand, likely as panicked Kiwis stocked up for a potential second wave, but growth quickly returned to normal.

As New Zealand was in lockdown for a portion of the quarter, no new stores were opened.

Big W

Discount department store Big W saw substantial growth during the quarter, driven by bigger basket sizes of leisure and toy purchases, with sales up 20.4 per cent to $1.1 billion.

Online sales were up 175 per cent to $104 million, due to the fact stores in Melbourne were transitioned to fulfil home deliveries and pick up services, as well as the launch of Big WX – a team within Big W that will focus on online, and collaborate with Woolies X, Countdown X and Endeavor X.

Endeavour Drinks

Woolies’ liquor arm Endeavour Drinks also saw strong growth of 21.4 per cent to $2.6 billion, and online growth of 57.6 per cent to $227 million.

Spirits was the fastest growing category in Dan Murphy’s and BWS, particularly gin, while wine and beer sales remained strong.


However, the group’s Hotels division didn’t fair as well as the rest of the group, suffering a fall in sales of 33.2 per cent to $313 million, largely due to Covid-19 restrictions putting a stop to the majority of travel plans.

5 Nov, 2020
Lion recruits consumer & brand director from Mars
Inside FMCG

Lion has appointed Anubha Sahasrabuddhe as its new consumer & brand director, recruiting her from US FMCG giant Mars. 

In her new role, Sahasrabuddhe will oversee marketing for Australia and lead the company’s Consumer Global Centre of Excellence across Australia, New Zealand, the US and UK. The appointment will take effect from early next year.

“Born and raised just outside of Sydney, Sahasrabuddhe will return to Australia after a truly global career that saw her live in eight cities over the past 17 years,” said James Brindley, MD at Lion Australia. “This world-wide perspective will be invaluable to Lion as the company focuses on the rebound of the adult beverages sector next year following the heavy impact of Covid-19 restrictions during this year.”

Sahasrabuddhe is currently global VP of Chocolate at Mars and has had a number of senior positions including global VP, Wrigley in the US and China.

Prior to Mars and Wrigley, Sahasrabuddhe worked with Coca-Cola in New Zealand, Hong Kong, China and the Philippines.

“I feel privileged to have been chosen to lead the consumer thinking for Lion and oversee its portfolio of household name brands,” said Sahasrabuddhe.

“I look forward to taking these brands into the future, whilst also bringing Lion’s innovation and NPD strategy to life to meet consumer demand for new adult beverages in new growth markets.”

5 Nov, 2020
Woolies sales soar on back of pandemic, Ooshies promotion
The Age
The Age

Woolworths chief executive Brad Banducci is confident the supermarket group can hold on to the significant sales bump it has received from the pandemic, having seen online food sales double for the first quarter.

"What we've seen with e-commerce is the acceleration of a trend that already existed," Mr Banducci said in an interview following the grocery giant's September quarter results.

"What is clear is that e-commerce is here to stay, I don't think that's going to go away. It's only going to grow."

He did concede there would be some "rebalancing" as people start eating out again with the lifting of COVID restrictions, but pointed to some permanent changes in habits as people eating together at home was "becoming quite a ritual".

Woolworths said people eating at home during the pandemic and its Disney Ooshies promotion helped grow like-for-like food sales by 11.5 per cent for the first quarter to $12 billion. Overall, the company grew sales by 12.3 per cent to $17.85 billion.

Online food sales in Australia doubled to $961 million compared to the prior September quarter, accounting for 8 per cent of all food sales in the quarter, according to Woolworths.

"It has been a pleasing start to the 2021 financial year with all retail businesses delivering strong sales growth and customer metrics remaining solid," said Mr Banducci.

Groceries were not the only big sellers for the retailer, which reported 22.3 per cent growth from Big W driven by booming sales of toys and leisure goods. Online sales at Big W surged 175 per cent to $104 million. The alcoholic beverages business Endeavour Drinks also reported 20 per cent comparable sales growth to $2.65 billion, with online sales there rising 57 per cent to $227 million.

Mr Banducci said sales and costs will remain elevated this year as the company spends up to provide a COVID-safe shopping environment in the lead-up to Christmas.

"COVID costs remain material as we continue to prioritise the safety of our customers and team but have moderated as we become more efficient at operating COVIDSafe," he said.

As an example of the lockdown's impact on sales, Woolworths reported that sales growth in Victoria was 20 per cent for the quarter due to the stringent restrictions in place. Another noticeable trend was customers upgrading their food and alcohol choices during the pandemic.

“There are clear instances of affordable luxuries, or trading up, at home," said Mr Banducci, citing people's choices of goods like seafood and ice cream. “We are clearly seeing it in the alcohol categories with wine,” he added.

Citi was forecasting Woolworths food sales would grow 11.6 per cent like-for-like for the first quarter before moderating to 9.2 per cent growth for the second quarter.

"Channel checks indicated that Woolworths out-traded Coles through this period, partially reflecting a successful Disney collectables program," said Morgan Stanley.

Coles also unwrapped one of its highest-ever quarterly sales figures, buoyed by COVID-19 lockdowns.

"The outlook to the grocery industry remains robust, with a strong medium term demand backdrop; rational market conditions supporting gross margins; and declining COVID-19 fixed costs buffering EBIT (earnings before interest and tax) margins," said Citi.

Woolworths' strong first-quarter food sales result built on a prior September quarter which saw sales up 6.6 per cent, thanks to its Lion King promotion.

The company also updated the market on the underpayment of 6000 of its employees by as much as $300 million. The company said it paid out $164 million in the quarter for payment shortfalls. These remediation payments to staff now total $281 million.

The company hopes to clear up underpayments in its supermarkets business by the first quarter of next year.

Woolworths shares were down slightly to $38.48 on Wednesday afternoon.

5 Nov, 2020
'Truly exciting things coming through the pipeline': Guzman Y Gomez is opening more stores in Australia and the US, as a potential listing looms
Business Insider Australia

More Guzman Y Gomez stores are on the way.

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In January 2020, the Aussie-based, Mexican cuisine restaurant chain opened its first store in the US, right in Chicago, Illinois. Having already established international stores in Singapore and Japan, the company has now extended its reach to the US, where founder and CEO Steven Marks is originally from.

GYG moved a team of around 40 people over to the US for its new store, which is complete with a double lane drive-through.

“We opened up and it was a huge success,” Marks told Business Insider Australia. “Obviously COVID hit hard, especially in the suburbs of Illinois, and without our double lane drive-through I think we’d be in a lot of trouble.”

GYG is also planning to open more stores in the US. Marks said they will be around 10 – 15 minutes away from initial store in Illinois to attract customers, adding “we like to build and cluster”.

“The opportunity in the US is massive,” he said. “And we’re hoping to sign two more leases by the end of December this year. So we’re growing.”

The year 2020 marks the one year anniversary of GYG’s ‘clean menu’. It also holds whispers of the company’s potential listing.

According the Australian Financial Review, documents filed with regulator ASIC indicated GYG switched from a proprietary company to an unlisted public company, which could be a sign of a looming IPO.

When asked about a possible listing, Marks was coy.

“It was a dream of mine since I was very young to bring a company public,” he said, despite business facing more scrutiny when they do so.

“I love GYG and I love our guests and I love the people that work at all our sectors throughout GYG. To give them the opportunity to own a share of GYG – that’s pretty amazing. And that’s a very special feeling as a founder and as someone who’s very entrepreneurial.”

He added that “if it happens or when it happens” that would be “awesome” but his team’s job is to continually open and run restaurants.

But, should the company go public, Marks confirmed that will happen in Australia. That’s compared to Australian tech giant Atlassian which listed on the US NASDAQ.

“No, we’d keep it at home,” Marks said. “We’re an Australian company – it would be an Australian listing.”

More stores in Australia

Around four months ago, GYG opened what it calls La Cucina (which means The Kitchen) around the corner from its office in Sydney. This houses kitchens where GYG tests and creates its products.

“We spend so much time there playing with food and tasting food,” Marks explained. “Because one thing you know when you when you want to open up restaurants, you have to have a discipline of what you keep on the menu or what you take off. So we’re very careful because the worst thing to do is just continually to add stuff and then increase complexity of operations. That means execuxtion starts to fall.

“So I have a very good discipline of what we put on the menu and what we take off.”

He added that GYG has “got some truly exciting things coming through the pipeline.”

One of the company’s goals is to ramp up the breakfast, lunch and dinner served through its drive-throughs. And while Marks isn’t a fan of plant-based meat, GYG is set to release a product that is made of vegetables.

GYG has six more stores planned for Australia by the end of the year and one more in January. There are even more on the way in the next year and a half.

“GYG throughout the last five to six years has evolved and evolved,” Marks said. “Right now we’ve close to 40 drive-throughs in Australia and we have a pipeline of probably another 40 that’ll open up in 18 months.”

4 Nov, 2020
Marley Spoon in snap $56m raising
Financial Review

ASX-listed meal kit service Marley Spoon was getting in front of funds after market on Thursday evening with a capital raising to finance its growth.

The company was on the hunt for $56 million via a placement of new shares.

Canaccord Genuity – which was at hand for Marley Spoon's raising in May and helped float it in 2018 – was lead manager and underwriter on the deal, while Wilsons was chipping in as co-manager.

The placement was priced at $3.22 a share, which represented a 5 per cent discount to Marley Spoon's one-day volume weighted average price.

The capital raising coincided with the release of Marley Spoon's results for the September quarter.

The company was expected to unveil big growth in its US business, including a 163 per cent rise in revenue compared to the September 2019 quarter.

At the end of the September quarter Marley Spoon had 362,000 active customers and quarterly revenue hit €69.3 million ($115.8 million), a 109 per cent increase on the September quarter last year.

The bulk of Marley Spoon's revenue come from the United States and the company upgraded and expanded its capacity at its east coast facility during the quarter.

30 Oct, 2020
Coles boss crosses fingers for speedy recession recovery
The Age
The Age

Coles boss Steven Cain remains hopeful of a quick return to economic growth as the supermarket giant unwrapped one of its highest-ever quarterly sales figures, buoyed by COVID-19 lockdowns.

Sales across the company shot up 10.4 per cent for the three months to the end of September, helped along by locked-down Victoria where spending has remained elevated. The figure marks Coles' second-highest quarterly result since 2007.

Mr Cain said he was gunning for a "short, sharp" recession, responding to comments from Reserve Bank deputy governor Guy Debelle on Tuesday that it appeared that Australia's economy grew through the September quarter.

"If Australia comes out of the recession fastest and first, that's incredibly good news for us," he said.

"But I think underneath the surface you have to look at what's happening across the spectrum because in amongst it all, there will still be a number of unemployed people that we need to make sure we're delivering for."

Coles and its rival Woolworths have both seen skyrocketing sales figures over the past eight months thanks to the COVID-19 pandemic, which fuelled waves of frenzied buying early in the year as customers panicked over food supply.

Coles' supermarket sales rose 9.7 per cent for the quarter to $8.46 billion, a result the company said was primarily driven by the state of Victoria and to a lesser extent New South Wales. Excluding Victoria, comparable sales growth was 7.7 per cent.

With restrictions in the southern state easing on Wednesday, sales may begin to moderate as the retailer moves towards Christmas, Mr Cain noted.

"It is fair to say that the tighter the restrictions, the higher supermarket sales are, and also conversely, the lighter the restrictions the lower sales will be," he said. "But they will still be elevated compared to other years."

The virus also prompted a rush in online orders at supermarkets, which has continued into the new financial year. Online sales across Coles' supermarkets rose 57 per cent for the quarter. Within Victoria alone, online sales doubled as the state again was the primary growth driver.

A total of $65 million in COVID-related costs were flagged by Coles for the quarter, though the supermarket noted this was lower than the $170 million incurred by the retailer earlier in the year.

Liquor sales grew 17.8 per cent for the quarter, and the company's petrol station-situated express stores saw sales jump 10.2 per cent.

For the first four weeks of the second quarter, sales in supermarkets continued to be elevated, up 6.4 per cent across the board or 5.4 per cent excluding Victoria. Online also grew 45 per cent through October.

Mr Cain said he expected the supermarket would continue to post solid sales figures for the next few months before hitting the "panic-buying wall" in March, where sales will start to be compared against the spikes seen earlier this year.

"I think supermarket sales in March were up more than 30 per cent, so that's going to be quite difficult to cycle this year," he said. "I'm very focused on trying to think about what next year might bring for us and how we might need to do things differently."

Coles shares rose 2.7 per cent to $17.67 on the back of the sales update, which Goldman Sachs analyst Andrew McLennan labelled a "solid set of numbers". However, Mr McLennan noted that the strong sales could start to moderate through the second quarter.

"Trends into [the second quarter] to date look a touch weaker, but the industry is poised for a strong summer of home entertainment, suggesting positive earnings conditions," he said.

30 Oct, 2020
Asahi sells five liquor brands to Heineken
Inside FMCG

Asahi has sold the Australian rights to five liquor brands, including Strongbow and Stella Artois, to rival Heineken in a deal which satisfies regulatory conditions related to Asahi’s purchase of Carlton & United Breweries. 

Heineken will take over three cider brands – Strongbow, Little Green and Bonamy’s – along with beer labels Stella Artois and Beck’s and their perpetual licenses for the market. 

When Asahi was given approval by the Australian Competition and Consumer Commission (ACCC) to acquire CUB, a deal confirmed in June, it agreed to a court-enforceable undertaking to divest the five brands. Asah is also obligated to ensure the brands receive the same access to bars, pubs and clubs as well as retail stores.

The deal sees Strongbow in Australia reunited with the global Strongbow portfolio after 17 years. The cider brand was first produced by HP Bulmer, founded in 1887, which was bought by Scottish & Newcastle in 2003. Fosters, the predecessor of CUB, bought Scottish & Newcastle’s Australian and New Zealand assets in 1983, while Heineken led a consortium to buy the rest of the business. 

“We are thrilled to bring the Strongbow brand in Australia home to Heineken and scale up our beer and cider portfolio in one of the world’s leading beer and cider markets,” said Jacco van der Linden, president of Heineken Apac in a statement announcing the deal. 

“This acquisition shows that Heineken remains active in pursuing growth where we see opportunities that align with our long-term strategy.”

The brands will be distributed throughout Australia by Drinkworks, a wholly owned Heineken subsidiary, joining its premium beer and cider portfolio which already includes Tiger, Sol, Monteith’s beer and cider and Orchard Thieves cider. 

Neither Asahi or Heineken revealed financial terms of the deal. 

Asahi, said the sale marked a significant step in the path towards acquiring CUB, which is expected to close in the fourth quarter of this year.

“There will be no manufacturing job losses nor brewery closures associated with this (Heineken) deal,” the company said in a statement.

29 Oct, 2020
Coca-Cola Amatil receives $9.28bn offer to merge with European distributor
Inside FMCG

Coca-Cola’s Australian and European distributors are set to merge into a single entity after Coca-Cola European Partners lodged an offer for Coca-Cola Amatil (CCA) valuing the business at A$9.28 billion. 

The bid – which is non-binding – would see the European company buy the 69.2-per-cent stake of CCA which is not owned by The Coca-Cola Company (TCCC), the original US business. This would be done via a scheme of arrangement which has already been endorsed by the independent directors of CCA.

CCA is one of the region’s largest bottlers and distributors of ready-to-drink non-alcoholic beverages, liquor and coffee in the Asia-Pacific. Besides the Australian market, it has a heavy presence in Indonesia and the Pacific Islands.  

The European company has already entered an agreement over terms to purchase TCCC’s 30.8-per-cent stake, subject to Australian regulatory approvals and the acceptance of the scheme of arrangement by independent shareholders.  

Subject to due diligence and various conditions being met, CCA’s board of directors “intends to unanimously recommend the scheme to independent shareholders, in the absence of a superior proposal and subject to an independent expert concluding” that the scheme is fair and reasonable. 

The two companies say the proposed merger would create a broader and more balanced footprint for the European business while almost doubling its consumer market. The company said it would ultimately “drive sustainable and faster growth through geographic diversification and scale”. 

The scheme comprises a cash payment of A$12.75 per share, which represents a 38-per-cent premium on the three-month volume weighted average price of CCA’s shares. TCCC would be paid A$9.57 per share for 10.8 per cent of its holding with the balance subject to a separate agreement on  cross shareholding.

The deal would represent a 10.9-times multiple on CCA’s post-tax profit during the pre-Covid-19 2019 trading year.  

29 Oct, 2020
Blackmores banks on pets to overcome COVID crunch, drops Chinese medicine play
The Sydney Morning Herald

Vitamins maker Blackmores is vowing to look beyond the COVID-19 pandemic and seek growth in mental health and pet supplements as it offloads an acquisition made by former chief Christine Holgate in 2016.

The $1.3 billion wellness business acknowledged at its annual general meeting on Tuesday the coronavirus pandemic had been a "huge challenge" for the company, but pointed to its continued strength in Australian and Asian markets and how its new Braeside facility had cemented its role as a local manufacturer.

Chief executive Alastair Symington also revealed on Tuesday that the company would divest Chinese herbal medicine play Global Therapeutics, which it acquired under the stewardship of former chief executive Christine Holgate in 2016.

Blackmores bought the Byron Bay business for $23 million, with Ms Holgate saying at the time that Global Therapeutics' Fusion and Oriental Botanicals brands would "bring us closer to our Chinese consumers in Australia".

Mr Symington said Global Therapeutics had been sold to ASX-listed McPherson's Limited for $27 million because it was "no longer part of our strategic priorities".

Ms Holgate, who has stood down from her current role as chief executive of Australia Post pending a review of the company's decision to gift $19,500 in luxury watches to senior managers, made a brief appearance at Blackmores' AGM. She was seated behind major shareholder Marcus Blackmore as he bade farewell to investors on the webcast.

The company announced last Friday that Mr Blackmore would be stepping down from its board.

Mr Symington thanked Mr Blackmore for his more than five decades' service to the business that his father, Maurice Blackmore, created.

Mr Symington also flagged new areas of focus for the business on Tuesday, including pet supplements, which Blackmores said would be worth $350 million in China alone in the next four years.

The company was also planning to use its Blackmores Institute, the research arm of the business, in a play for growing its presence in the "mental wellbeing" market.

"This is an area which we believe Blackmores has the potential to lead the category in both education and innovation," Mr Symington said.

Blackmores shares jumped to an intra-day high of $68.38, 8 per cent above Monday's close, before closing 0.68 per cent higher at $63.77 as the broader ASX 200 slid 1.7 per cent.

The company revealed a 66 per cent drop in statutory net profit to $18.1 million in August as revenue in Australia, New Zealand and China slid in the face of the pandemic.

Mr Symington said on Tuesday the business was projecting first-half net sales growth for 2021 in the "mid single digits", driven by the Asian markets.

26 Oct, 2020
Australians are spending more on groceries in 2020. Here's the breakdown state by state.
Business Insider Australia

Australians have been spending more money on their groceries.

New research commissioned by Aldi found that 75.4% of Australians are spending more on groceries in 2020.

Tasmanians took the crown – with 81% spending more on their grocery shop – followed by Western Australians (80%) and residents in the Northern Territory (80%).

Here’s a breakdown of where Aussies are putting more money down for their groceries:

  • Tasmania – 81%
  • Western Australia – 80%
  • Northern Territory – 80%
  • New South Wales – 78%
  • Victoria – 77%
  • Queensland – 70%
  • South Australia – 66%
  • Australian Capital Territory – 65%

The research also found that 72.5% of Aussies are looking to cut down on how much they spend on groceries so that they can stick to their budget.

According to Suncorp, the average Australian spends nearly $300 on food a week. In a 2019 report, it found that groceries were the most common food-related expense, followed by alcohol and takeaway food.

Queensland University of Technology Business School Professor Gary Mortimer, a researcher in retail marketing and consumer behaviour, explained why there has been an increase in spending on groceries.

“Certainly from March onwards, some of that lift was underpinned by panic buying during times of uncertainty,” he told Business Insider Australia. “We saw shoppers flock to supermarkets and stock up and stockpile,” he said.

Australians have also been spending time cooking at home, with companies like Coles launching recipes and demonstrations online for some inspiration.

“We’ve seen consumers what we refer to as ‘cocooning’ or staying home [and] avoiding the crowds,” Mortimer added. “So more and more people are actually cooking at home.”

The shutdown of hospitality venues during the pandemic has also seen Aussies stock up on their groceries, as they weren’t able to go and dine out as they used to.

“Even as states and territories have reopened due to social distancing measures, we still see restaurants and bistros and pubs restricted to their numbers,” Mortimer said. “So even if you want to go out to your favourite restaurant or bistro, you may find it difficult to get in and hence, we’re still cooking at home.”

Aldi shopping expert Nicole Higgins highlighted ways Aussies can save money on their groceries, such as buying fruit and vegetables that are in season, planning at least one meatless meal a week and meal prepping.

“Don’t get intimidated by fancy meals and intricate recipes,” she said in a statement. “When meal prepping think soups, slow cooker stews, breakfast muffins and pasta sauces.”

Another tip? Using glass containers to store your food. “Rather than falling victim to the old out of sight out of mind principle, glass containers will remind you what you have in the fridge and pantry so you know when produce is reaching the end of its life,” she added.

21 Oct, 2020
Starbucks ties executive pay to diversity goals

Seattle | Starbucks plans to significantly boost racial diversity among its workforce - and it's making that goal a factor in the pay of its senior executives.

By 2025, the Seattle coffee giant wants people of colour represented in at least 30 per cent of roles in corporate operations and 40 per cent of retail and manufacturing roles, CEO Kevin Johnson told employees last week. The goals, part of an ongoing effort to encourage diversity, reflect the company's obligation "to build bridges and create environments where all are welcome," Johnson said.


Starbucks CEO Kevin Johnson's pay will be tied to the company's success at meeting diversity goals. as offered to meet two black men who were arrested at a Philadelphia Starbucks store. The Seattle Times via AP

Starting in 2021, the compensation of Johnson and 42 other senior executives will be tied to the company's success at meeting those goals, although the company declined to offer details.

However, the company did share how far it must go to reach those goals.

Currently, 18.5 per cent of its 43 top executives - senior vice-presidents and higher - are people of colour, the company said. In its retail operations, people of colour make up 23.5 per cent of regional vice presidents, 27.1 per cent of regional directors, and 34.9 per cent of store managers.

Starbucks' willingness to publicly state its goals is laudable, said Ines Jurcevic, an assistant professor at the University of Washington Evans School of Public Policy & Governance and an expert in diversity management. Research has shown "making those goals public is necessary for being able to achieve them," Jurcevic said.

She also commended the company for publishing its current diversity numbers "because we don't know where (a company's) challenges are if we don't know what representation looks like to begin with."

Starbucks' announcement of its goals comes during a year of high-profile stories about diversity and corporate culture as businesses have confronted the Black Lives Matter movement and calls for racial justice in the wake of the police killing of George Floyd, a Black man, in Minneapolis.

In June, Starbucks came under fire for temporarily banning employees from wearing Black Lives Matter symbols at work. Starbucks stores in the Seattle area have been routinely vandalised during some recent protests.

But Starbucks has also stepped up its diversity initiatives. The company has made Juneteenth an official company holiday. On Wednesday, it announced plans to give $1.5 million via the Starbucks Foundation to community groups, with an emphasis on organisations with Black leadership and that serve Black communities.

Starbucks said it is also working to hire more people of colour and retain them by making the company's culture more inclusive. That includes anti-bias training, better tools for tracking employees' career trajectories, and programs such as the mentoring of employees who are people of colour by senior executives.

Ultimately, those initiatives will be as crucial to the success of the diversity goals as any numerical goals, Jurcevic said.

She said corporate diversity programs that focus too heavily on meeting numerical goals can often underemphasise the changes necessary so that people of colour actually want to work there.


"It's one thing to have representation goals, but it's another thing to think about corporate culture and how your culture, both from the retail level all the way up to corporate, embodies this value of equity and inclusion," she said.

Despite growing attention to corporate diversity, progress has been slow. According to a recent report by Mercer, a consulting company, people of colour still account for just 23 per cent of company managers, 17 per cent of senior managers, and 15 per cent of executives.

But diversity initiatives can come with risks. Starbucks' efforts come after a recent inquiry by the US Department of Labor into whether Microsoft and Wells Fargo broke workplace civil rights laws by seeking to double their ranks of Black leaders.

21 Oct, 2020
The power picnic is spreading
Financial Review

New York | Emily Hecht takes her new role of "picnic designer" seriously. Hecht arranges a picnic by layering neutral and blue-hued blankets incongruously and setting a low wooden table on top of them with a flowing white table runner.

She lays down a place mat and then creates a setting of alternating dishes – white porcelain, white and blue-patterned melamine – and gold cutlery. She scours local vintage markets for glassware and candle holders. No detail is spared, right down to the royal blue vases, inherited from her great-grandfather, filled with eucalyptus stems.

Although picnics are certainly not new, the pandemic has brought a surge of over-the-top outdoor dining experiences. "I think the look we're going for is a little – I don't love this word – but luxury," said Hecht, 29, who started her company, Gather Picnic Co, in Atlanta this July with her husband, Drew Hecht, 29. "And I think when you're putting together a birthday party in your backyard, you want it to feel a little different. I don't want anyone to ever be like, why didn't I just do this myself? It's like, no, every piece on our table, the vases, the candle holders, the little dried flowers that we put in the napkins feel special."

Restaurants across the US have begun to reopen, but people don't necessarily feel ready to go back yet, even if sitting outdoors. Why not make a picnic in a backyard or nearby park instead?

Although a chequered blanket on the grass with a wicker basket is standard-issue equipment, the picnics flooding Instagram today hark back to paintings such as Monet's Luncheon on the Grass (1865), which depicts a group of well-heeled men in bowler hats and suits, and women, dresses splayed on a white tablecloth, schmoozing over a spread of wine, fruit, cake and roasted fowl.

Mayte Soriano, 30, of Temecula, California, created Wonderland Picnics in July after feeling "over the moon" about a picnic she and her husband shared in the San Bernardino mountains. "I wanted to make people feel the same way," she said. "I want them to experience the outdoor experience and how romantic it can be to have a celebration outdoors and not just in a restaurant." Other companies are also designing highly stylised experiences for the bored and cooped up. Gather, for example, has two themes to choose from: the pink-toned "Venice, California" or the blue-and-white "Milos, Greece". The Hechts don't provide food, though some companies do, and return after three hours to break down the picnic.

Most companies put a chalkboard sign on display near the picnic with the organiser’s name or words of felicitation. Sometimes there’s even a mirror for selfies, because why go through the effort of putting on real clothes if it’s not going to be documented?

In Manhattan, Wendy Weston, 50, the owner of Perfect Picnic, chuckles when someone asks if she created her company as a response to the pandemic. She actually started it in 2011 after a trip to the Amalfi coast of Italy.

"I was always that person who had a bottle of wine, cheese and meat and olives in my bag," Weston said. "And it was hilarious actually looking back, but I was always ready for a moment."

Now, she creates scenes year-round in places such as Central Park and the Hamptons. The experiences she offers run the gamut from "The Gold Picnic" at $US375 ($530) to the "Hamptons Helicopter Ride Beach Picnic" ($US8300).

The most popular option this summer has been the "Social Distance Picnic Party" ($US1000), which includes food for 10 to 12 people, blankets, parasols and the game corn hole. "Remember to stay two baguettes apart," the website cheekily warns. She also has a picnic supply store on the Upper West Side, across the street from Central Park.

In a year of dashed plans, people look to these occasions to fill in for delayed celebrations and milestones. Kaleigh Richards, 25, in Denver, was one of the many brides who had to postpone her wedding. This was the right decision, she said, but she hired Denver Picnic Co to create a surprise evening for her fiancé (their pup tagged along, too) to mark the day.

The table sported gold chargers and pink roses in a white vase along with pink and cream cushions to sit on. The bride-to-be wore a white dress, had her hair and make-up done and hired a photographer. The evening set her back about $US450, but she pointed out, "people aren't going out to dinner as much, or doing entertainment and concerts. So it's all of that money that you would put maybe elsewhere, you can put toward something like this."

Sam Chin, an events professional, celebrated her 30th birthday with a picnic in Manhattan’s Battery Park, after coming across the company Une Table By Tania and becoming smitten with the idea of an elevated outdoor meal in the park. Finger sandwiches were served, but her half a dozen guests weren’t focused on eating.

“A lot of them hadn’t seen each other in five months,” Ms Chin said. “So it was more so just about the experience and socialising.”

Sometimes the picnic alone is enough of a reason to celebrate. Eni Popoola, a lifestyle blogger and student at Columbia Law School, had plans to travel to Jamaica in August but had to cancel, so she set up at a socially distant garden party in Gantry State Park in Queens.

She was inspired by Chinyere Adogu, an Instagram influencer who posted a photo of her own elaborate picnic. “That was really the thing that clued me into the idea of, like, oh, a picnic doesn’t just have to be a blanket and a book, this can be something that is an event, a display, a set-up,” Ms Popoola said.

So, she swapped the beach towel for a picnic blanket and organised her own spread. Picnic platters were bought from Perfect Picnic, a basket from Bed Bath & Beyond. She already had trays on hand, from Ikea. "All of it was, I guess, a production," she said.

Wearing a floral organza dress designed by Asiyami Gold and clutching a parasol, Ms Popoola, 25, posed on a blanket surrounded by charcuterie boards and a basket filled with wine bottles. “I mean, honestly, I’m someone who cares about aesthetics to an extent, so I really enjoyed how it looked like it was something that I could’ve catered, but it really was something that I put together myself,” she said.

Most of the new picnics are decidedly not about food. Instead, the picnic goers find allure in creating a style moment in an otherwise mundane time. People aren’t going to these soirees dressed in gym shorts; they’re digging into the closet and wearing clothes meant to be seen by people.

“It was the opportunity to showcase the best summer outfits, which is another impact of coronavirus,” Ms Popoola said. “I haven’t really been going places, and I had this beautiful dress I wanted to wear that really gave me summer picnic vibes.”

Cooler weather, though, isn’t going to bring picnic season to a halt this year. At Gather, the Hechts have plans to introduce a Santa Fe theme, which “has more of that fall vibe”, Ms Hecht said, with extra blankets.

“I think people still love to be outdoors,” she said. “And maybe they are doing it by their fire pit at their house, if they have one, and just figuring out ways to make it cozy and still continue the outdoor experience.”


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