News

11 Jun, 2019
Unilever to acquire Japanese skincare company
Inside FMCG

FMCG multinational Unilever announced on Monday that it will acquire Japanese skincare brand, Tatcha. 

The company, which was founded by Victoria Tsai, is based in the US and has an innovation centre in Japan known as the Tatcha Institute. 

“We are delighted to have Tatcha joining our portfolio of Prestige brands. Inspired by Japanese pure beauty rituals, Tatcha is one of the best performing beauty brands in North America, famous for its exceptional product experience and unique combination of natural ingredients and high product efficacy,” Vasiliki Petrou, Unilever EVP and CEO Prestige, said. 

“Thanks to Vicky’s passion and expertise, iconic products like The Water Cream and The Silk Canvas have become the cornerstone of long-term consumer loyalty. We are really looking forward to working with this amazing team and to continuing to grow the brand globally.”

According to Unilever, Tatcha is a modern skincare brand based in classical Kyoto rituals. It works with scientists in Japan and the US to produce formula made from green tea, rice and algae known as Hadasei-3. The company said Hadasei-3 is “a trinity of anti-aging superfoods born from the Japanese diet and the timeless wonder of Japan for transformative beauty, inside and out.”

“When creating Tatcha, our dream was to make a brand that would live for at least 100 years; that dream can come true in our new home with Unilever. We are overjoyed to have found a parent to grow globally with, and to have a purpose-driven partner to ensure we can have a positive impact in our communities as we grow,” Victoria Tsai, founder of Tatcha said.

Tatcha’s skincare line includes Luminous Dewy Skin Mist, The Silk Canvas primer, The Water Cream moisturizer and The Deep Cleanse Exfoliating Cleanser.

While terms of the deal were not disclosed, the transaction is expected to be finalised in the third quarter of 2019.

 

11 Jun, 2019
Woolworths invests $30 million in Marley Spoon
Inside FMCG

Woolworths is investing $30.05 million in global mealkit company Marley Spoon in a strategic partnership aimed at growing the Marley Spoon and Dinnerly brands. 

The five-year deal includes the purchase of $7 million worth of Marley Spoon shares by Woolworths, equating to a nine per cent stake in the meal kit company.  

Through the partnership Marley Spoon expects to benefit from Woolworths’ industry experience and large customer base and will work with its sourcing and supply chain teams. 

“The partnership gives us access to capital, access to growth and access to synergies,” Fabian Siegel CEO of Marley Spoon told Inside FMCG

“Woolworths has the understanding of a lot of households in Australia and has the trust of a lot of households in Australia and that can help us to grow both Dinnerly and Marley Spoon but we can also [be] more efficient by looking for synergies on the sourcing and logistics side. “

“Woolworths as a shareholder of course would benefit from it as well… also learning how to build an online direct to consumer subscription service… [Woolworths is] quite interested in learning about that.”

Woolworths will gain valuable insights from Marley Spoon’s manufacturing, distribution and market experience in home-delivered meal kits as grocery spending shifts to online. Meal Kits are now the fastest growing category of online grocery sales according to data from research company IBISWorld. 

Siegel describes the two companies as very different businesses and said he is not worried about competition from the supermarket giant.

“The partnership that we’ve agreed to will allow us to continue to operate as independent as in the past; that’s important when a small company works with a very big company. That was part of the ground rules we set in the beginning that there’s really no operational influence whatsoever, Woolworths does not have a Board seat.”

“It’s really about learning from each other, and as a shareholder Woolworths benefits with whatever we come up with in the future. I think that’s a more successful model because otherwise small companies can sometimes be slowed down if larger companies have an influence on the decision making processes.”

Brad Banducci, CEO of Woolworths Group said the partnership aligns with the supermarket’s goal of meeting customers’ needs for healthy and convenient meal solutions.

“Marley Spoon has demonstrated it has a customer focused, innovative and entrepreneurial culture and we are excited to partner with them,” he said in a statement on Friday. 

Retail expert Associate Professor Gary Mortimer called the strategic partnership “a smart move by Woolworths”.

“Meals Kits are expected to make up 10 per cent of Australia’s online grocery sales industry and turnover around $320 million this year,”  
Mortimer told Inside FMCG

“These types of products attract those consumers who are looking for convenience, but still want to engage in the activity of cooking. It’s more than just ‘groceries in a box’, with most pre-prepared, portioned with fresh sauces and marinades.” 

Mortimer said Woolworths has been proactive when it comes to responding to disruption and change.

“Woolworths stores have already been stocking a similar product in the metro and third generation stores for some time, so this is a natural evolution to grow this category,” he said.

Woolworths recently launch two hour grocery delivery with third party provider Yello, and a restructure of its store model to bring fresh categories to the forefront.

“This demonstrates the supermarket is actively thinking outside the four walls of their stores on customer oriented solutions.”

11 Jun, 2019
Greencross names new CEO, fills out management team
Inside Retail Australia

Three months after de-listing from the ASX and transitioning to a private company, Greencross Limited has hired Bras N Things boss George Wahby to replace Simon Hickey as its new chief executive. 

Wahby has led Bras N Things since 2014, and prior to that, he ran McWilliam’s Wine Group for six years. He will join the pet car retailer in August. 

The company’s current chief executive Simon Hickey will leave the business, with executive chairman Paul Mirabelle serving as acting chief executive until Wahby starts. 

“As Greencross transitions into life as a private company, the board has determined that now is the right time to identify the future generation of leadership and have sought the appointment of a leader to take the business through the next phase of growth,” Mirabelle said in a statement. 

“George has considerable experience building consumer-focused brands, developing new products and growing ominchannel retail experiences – all areas that current owners TPG Capital is looking to invest in.”

Wahby oversaw Bras N Things’ international expansion efforts, and built on like-for-like sales and earnings growth in the Australian market.

“The board would like to thank Simon Hickey for his significant contribution to the company since he joined,” TPG Capital head of Australia and New Zealand Joel Thickins said. 

“Simon has led the business through a challenging trading environment, successfully navigated Greencross into private ownership and positioned Australasia’s largest integrated consumer facing pet care company for ongoing success.”

Wahby isn’t the only management change, with several more appointments made in the shift to private ownership. 

Andrew McInerny will serve as the group’s chief operating officer of veterinary services, having formerly held the role of chief operating officer of chief operation officer of national home doctor services. 

Scott Charters will re-join Greencross on June 3, taking up the role of chief operating officer of retail. Charters previously held management positions at Pet Barn and Greencross between 2011 and 2016. 

The business also appointed a new chief people and culture officer in Chris Lamb, replacing the outgoing Vince Pollaers, as of July 1.

6 Jun, 2019
Woolworths plans store restructure and addition of two new departments
Inside FMCG

Woolworths will revamp its store operating model for the first time since 2011, to put a greater focus on fresh food, convenience and customer service to suit changing customer needs. 

The supermarket briefed team members on Wednesday about the implementation of the store model which will see the creation of two new fresh food departments at stores in the coming months.

Fresh Service will manage customer service at the deli, butchery and seafood counters while Fresh Convenience will cover dairy, eggs, pre-pack meat, branded bread and meal solutions.

“Over the last few years our customers’ needs have changed, but the way we have been operating our stores has stayed the same,” Claire Peters, managing director, Woolworths Supermarkets said.

“With customers’ ongoing expectations in fresh, and more shoppers looking for increased convenience, our stores need to deliver the best possible customer experience, every time.”

Peters said the new model will allow team members to be “more customer focused than ever before”.

Last week at the AFGC’s Food & Grocery conference, Woolworths highlighted the need for better convenience offerings for time-poor customers, as well as new and different choices that are good for health, wellbeing and the planet.

While the number of team members required in the new structure will not change, some current roles will be made redundant. Woolworths said in a statement to Inside FMCG that it aims to provide “as many redeployment opportunities as possible”. 

Woolworths will invest more than $10 million in team training and development as part of the restructure and will add Assistant Team Manager roles to facilitate better management progression.

The operating model has already been rolled out across a group of stores in New South Wales, with changes to other stores to be phased in over the coming months.

The supermarket recently revealed plans to further reduce promotions and focus on everyday value in stores in an effort to gain better “price trust” among consumers. 

Shopper feedback revealed that price is the most important element of customer’s trust and is a key area of focus for the retailer.

4 Jun, 2019
Vinomofo looks to the US with Gary Vee partnership
The Sydney Morning Herald

Australian wine startup Vinomofo is looking to the United States after partnering with YouTube entrepreneur Gary Vaynerchuk to launch his new wine brand Empathy Wines.

Vaynerchuk first got his start in 2006 with his YouTube channel WineLibrary TV and while the topic was wine, Vaynerchuk was using his channel to build the brand of 'Gary Lee'.

The 43-year-old has 2 million subscribers on YouTube and 6 million followers on Instagram, runs media consultancy VaynerMedia and is the author of several best-selling books.

Vaynerchuk says while he is best known for his YouTube presence, he is focused on entrepreneurship and, as an angel investor, backed tech companies including  Facebook, SnapChat and Uber in their early stages.

"Every day now I have been running a business," he says. "It is what I like to do. It would not make me happy being the personality Gary Vee, it's not what I do, I am an entrepreneur."

Vaynerchuk says his latest venture, Empathy Wines, is focused on having empathy for wine producers and consumers by "skipping two layers in the US". The model  is relatively unique in the United States but mirrors Vinomofo's approach of bypassing retailers and sourcing directly from wine makers and producers.

He has raised $2.3 million to launch the new venture, but Vaynerchuk says YouTube will be the main driver of Empathy Wine's success.

"It was remarkably important to put me on the map in the wine world and it continues to be a remarkably important platform for my career in storytelling," he says. "Everything I thought it was back then it has done, it has turned into one of the most important platforms in the world."

Vaynerchuk's YouTube channel was also the platform through which he originally met Vinomofo founders Justin Dry and Andre Eikmeier, who started their business as a wine blog.

"We have had a friendship and then it was a very natural transition to have a conversation once we decided to start a direct to consumer web brand," Vaynerchuk says.

He has ambitious plans for Empathy Wines and says demand for the product is strong."I think it is going to be a substantially major wine brand in America and then it will be significant work to build it in to a global brand," Vaynerchuk says. "It will be one of the biggest direct to consumer brands in the price point in America in the next three to four years."

Vinomofo is selling Empathy Wines in Australia, New Zealand and Singapore and Dry says he expects to sell out its allocation of 600 to 1000 cases. But the broader benefit from the partnership for Vinomofo is the potential to build its brand globally, particularly in the United States.

"The number of people that have become aware of Vinomofo through this project alone is insane," he says. "Anytime [Vaynerchuk] posts anything, it is seen by half a million people."

Dry says Vinomofo is "growing solidly" having just hit over $60 million in turnover and is back in profitability.

While major investor Blue Sky is experiencing troubles (its parent company collapsed into administration last month), Dry says this does not affect Vinomofo.

"I really feel for the guys going through it as it is obviously challenging and hard and all of those things," he says. "It doesn't have an impact on the operation of Vinomofo or any of their portfolio companies just that holding company. We were invested in through Blue Sky's investment fund which was made up of a whole heap of individual investors. It is business as usual for us but there is going to be noise in the market.

In the meantime Dry hopes Vinomofo's partnership with Vaynerchuk will help open doors for the Australian startup in the United States which he says is "absolutely a focus".

"He is an incredibly influential and connected person in that market," he says. "I will definitely talk to him about our opportunity to launch in that market. I am deep in negotiation at the moment, it depends how that plays out."

4 Jun, 2019
Priceline expands partnership with IRI to deliver improved range
Inside Retail Australia

Market research company IRI announced a significant expansion to its partnership with Priceline on Monday morning which will help the pharmacy deliver an improved range for customers.

Market research company IRI announced a significant expansion to its partnership with Priceline on Monday morning which will help the pharmacy deliver an improved range for customers.

Priceline will use IRI technology to support category management and improve planning and collaboration with supplier partners, which will ultimately lead to improved range, convenience and price for Priceline customers.

“I am very pleased that we are able to announce our expanded partnership with IRI,” David Ginsberg, head of buying for Priceline said in a statement.

“We already have a good understanding of our Priceline customer, however joining forces with a global leader in big data and analytics will allow us to further strengthen our knowledge and, more importantly, improve their experience when shopping in our stores.”

Paul Hinds, managing director Asia Pacific for IRI, said the partnership will find new ways to “delight and engage” Priceline customers.

“This partnership will augment our knowledge and result in better and faster decision making,” Hinds said.

“Together with our supplier partners, we will have a more holistic view of our customers and be able to better anticipate and cover their current and future needs.”

“Fifth straight year of growth”

The partnership comes alongside Roy Morgan research which notes 23.3 per cent of Australian women purchase cosmetics from Priceline – almost double the figure from four years ago. 

In fact, Priceline is beaten only by Supermarkets for market share in the beauty category, which holds 24.9 per cent of the market. 

“The cosmetics industry is a very competitive one with pharmacies and chemists, supermarkets, department stores and discount department stores all vying to increase their share of the market and looking for an edge to retain existing customers and draw in new ones,” Roy Morgan chief executive Michele Levine said. 

“Meanwhile, Priceline is enjoying their fifth straight year of growth in the market, fueled by a hardcore base of 18-24 year olds and a successful use of the growing online channel.”

This age category is Pricelines bread and butter, according to Levine, who notes that almost half (41.5 per cent) of 18-24 year old women who purchased cosmetics in an average six month period did so at Priceline. 

“No other retailers are seeing even close to this level of market power over a particular age group,” Levine said.

4 Jun, 2019
RT-UPS Vinomofo looks to the US with Gary Vee partnership
SMH

Australian wine startup Vinomofo is looking to the United States after partnering with YouTube entrepreneur Gary Vaynerchuk to launch his new wine brand Empathy Wines.

Vaynerchuk first got his start in 2006 with his YouTube channel WineLibrary TV and while the topic was wine, Vaynerchuk was using his channel to build the brand of 'Gary Vee'.

The 43-year-old has 2 million subscribers on YouTube and 6 million followers on Instagram, runs media consultancy VaynerMedia and is the author of several best-selling books.

Vaynerchuk says while he is best known for his YouTube presence, he is focused on entrepreneurship and, as an angel investor, backed tech companies including  Facebook, SnapChat and Uber in their early stages.

"Every day now I have been running a business," he says. "It is what I like to do. It would not make me happy being the personality Gary Vee, it's not what I do, I am an entrepreneur."

Vaynerchuk says his latest venture, Empathy Wines, is focused on having empathy for wine producers and consumers by "skipping two layers in the US". The model  is relatively unique in the United States but mirrors Vinomofo's approach of bypassing retailers and sourcing directly from wine makers and producers.

He has raised $2.3 million to launch the new venture, but Vaynerchuk says YouTube will be the main driver of Empathy Wine's success.

"It was remarkably important to put me on the map in the wine world and it continues to be a remarkably important platform for my career in storytelling," he says. "Everything I thought it was back then it has done, it has turned into one of the most important platforms in the world."

Vaynerchuk's YouTube channel was also the platform through which he originally met Vinomofo founders Justin Dry and Andre Eikmeier, who started their business as a wine blog.

"We have had a friendship and then it was a very natural transition to have a conversation once we decided to start a direct to consumer web brand," Vaynerchuk says.

The number of people that have become aware of Vinomofo through this project alone is insane.

He has ambitious plans for Empathy Wines and says demand for the product is strong."I think it is going to be a substantially major wine brand in America and then it will be significant work to build it in to a global brand," Vaynerchuk says. "It will be one of the biggest direct to consumer brands in the price point in America in the next three to four years."

Vinomofo is selling Empathy Wines in Australia, New Zealand and Singapore and Dry says he expects to sell out its allocation of 600 to 1000 cases. But the broader benefit from the partnership for Vinomofo is the potential to build its brand globally, particularly in the United States.

"The number of people that have become aware of Vinomofo through this project alone is insane," he says. "Anytime [Vaynerchuk] posts anything, it is seen by half a million people."

Dry says Vinomofo is "growing solidly" having just hit over $60 million in turnover and is back in profitability.

While major investor Blue Sky is experiencing troubles (its parent company collapsed into administration last month), Dry says this does not affect Vinomofo.

"I really feel for the guys going through it as it is obviously challenging and hard and all of those things," he says. "It doesn't have an impact on the operation of Vinomofo or any of their portfolio companies just that holding company. We were invested in through Blue Sky's investment fund which was made up of a whole heap of individual investors. It is business as usual for us but there is going to be noise in the market.

In the meantime Dry hopes Vinomofo's partnership with Vaynerchuk will help open doors for the Australian startup in the United States which he says is "absolutely a focus".

"He is an incredibly influential and connected person in that market," he says. "I will definitely talk to him about our opportunity to launch in that market. I am deep in negotiation at the moment, it depends how that plays out."

4 Jun, 2019
Priceline expands partnership with IRI to deliver improved range
Inside Retail

Market research company IRI announced a significant expansion to its partnership with Priceline on Monday morning which will help the pharmacy deliver an improved range for customers.

Market research company IRI announced a significant expansion to its partnership with Priceline on Monday morning which will help the pharmacy deliver an improved range for customers.

Priceline will use IRI technology to support category management and improve planning and collaboration with supplier partners, which will ultimately lead to improved range, convenience and price for Priceline customers.

“I am very pleased that we are able to announce our expanded partnership with IRI,” David Ginsberg, head of buying for Priceline said in a statement.

“We already have a good understanding of our Priceline customer, however joining forces with a global leader in big data and analytics will allow us to further strengthen our knowledge and, more importantly, improve their experience when shopping in our stores.”

Paul Hinds, managing director Asia Pacific for IRI, said the partnership will find new ways to “delight and engage” Priceline customers.

“This partnership will augment our knowledge and result in better and faster decision making,” Hinds said.

“Together with our supplier partners, we will have a more holistic view of our customers and be able to better anticipate and cover their current and future needs.”

“Fifth straight year of growth”

The partnership comes alongside Roy Morgan research which notes 23.3 per cent of Australian women purchase cosmetics from Priceline – almost double the figure from four years ago. 

In fact, Priceline is beaten only by Supermarkets for market share in the beauty category, which holds 24.9 per cent of the market. 

“The cosmetics industry is a very competitive one with pharmacies and chemists, supermarkets, department stores and discount department stores all vying to increase their share of the market and looking for an edge to retain existing customers and draw in new ones,” Roy Morgan chief executive Michele Levine said. 

Adtech Ad

“Meanwhile, Priceline is enjoying their fifth straight year of growth in the market, fueled by a hardcore base of 18-24 year olds and a successful use of the growing online channel.”

This age category is Pricelines bread and butter, according to Levine, who notes that almost half (41.5 per cent) of 18-24 year old women who purchased cosmetics in an average six month period did so at Priceline. 

“No other retailers are seeing even close to this level of market power over a particular age group,” Levine said.

4 Jun, 2019
Lush Tokyo store marks beauty brand’s largest yet in Asia
Inside Retail

The new Lush Tokyo store opened on Saturday is its largest yet in Asia, a three-storey, 1240sqm flagship.

Billed as “a global destination, with a curation of the best of Lush as you know it,” the Lush Shinjuku store is housed in the southeast wing of Shinjuku Station, the world’s busiest railway hub.

From the outside, it is hard to miss: a towering four-storey 1024cm x 352cm LED screen dominates the street frontage (the building’s fourth floor will house back-office functions for now).

Inside, Lush Tokyo promises an “experiential, imaginative retail space showcasing Lush’s innovation in technology, with exclusive product drops, and new ways to shop”.

Digital screens feature throughout the retail space, as well as projection installations, positioned to communicate key messages through visual content and designed to overcome language barriers.

Coinciding with the store’s opening is the release of an upgraded Lush Labs app for Android and iOS featuring English, Korean, Japanese and Simplified Chinese. Visitors can use the app’s scan function to browse product information while in store, at home and even in the store’s digital ‘shoppable window’ which will be active 24 hours a day for customers and passers-by to scan and shop curated collections and product drops.

Lush says using lens technology, via the app, to demonstrate products and product information is a step towards minimising packaging and reducing water wastage by showcasing products through videos.The content placed in windows and on the giant screen “will reflect the mood of Shinjuku at that time and aims to capture the attention of passers-by and commuters”. It will showcase Lush’s values, campaigns and creativity.

Inner beauty

Lush says the ambience of the new store aims to change the customer’s mood, whether it is a skin consultation, spa treatment or something sensory to speed you up or slow you down.

“Products, treatments and experiences with benefits beyond the body exist here and build in intensity as customers move through the floors. Each floor offers an uplifting, interactive and playful space that promotes exploration and creativity with benefits beyond the body through different materials, lighting, products, content and merchandising to set the tone and spark joy.”

The second floor offers what Lush describes as “a surreal sensory experience using colour therapy and generative art inspired by bath art to create an interactive digital mood”.

“Innovative use of technology heightens the senses and plays with mood, data from sensors that map customer position and movement will be used to activate sounds from within the displays. This is just one way the shop can respond to individual customers, creating targeted experiences filled with surreal moments.”

The new Lush Tokyo store opened its doors on Saturday, June 1. A spa planned for the third floor will open within the next few months and the company says it is evaluating using some of the fourth-floor space for customer engagement as well. 
 

 

4 Jun, 2019
China wipes $1b from A2 milk
AFR

A new action plan for China's formula market might not be aimed at Australian groups, but it raises some big questions for their investors.

The Chinese consumers will be encouraged to buy more locally made product under a new action plan.  New York Times

The release of a new action plan for China’s strategically important formula sector appears directly aimed at squeezing foreign players out of both ends of the supply chain.

The plan was prepared by the China' s National Development and Reform Commission and six other government departments on May 23, but released in China on Monday.

An English version is yet to emerge, but some in the market appear to have grabbed the key messages, given A2 shares fell 2.9 per cent on Monday, Bellamy’s fell 3.1 per cent, Bubs crashed 7 per cent and Wattle dropped 2.4 per cent.

The stocks slid further in on Tuesday, with A2 dropping more than 7 per cent by mid-afternoon. Almost $1 billion has been wiped off the value of the stock in two days.

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