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Coles and Uber Eats have teamed up to launch what they say is Australia’s largest on-demand grocery-delivery service, operating within the Uber Eats app.

Customers in Melbourne will be the first to be able to buy Coles’ products via the Uber Eats app from nearly 40 locations. During the upcoming months, the retailer will extend the service to 500 stores across the country.

To use the service, customers need to tap the ‘Grocery’ button in the app and select from a range of groceries, including fresh meat, dairy and pantry staples. Delivery progress can be tracked in real-time.

Orders placed on the app will be packed and delivered by a delivery person using the platform.

Coles’ GM of digital operations & ventures, Claire Pallot, said the partnership offers “a fast, reliable, and affordable option” for getting fresh produce and groceries delivered.

“Customers can continue to enjoy great value and quality produce they find at Coles, but with the convenience of on-demand delivery through Uber Eats.”

Lucas Groeneveld, Uber Eats’ regional GM of retail for ANZ, said the expansion will “supercharge” the variety of groceries already available on the app.

Online customers will also benefit from a last-mile delivery option from Coles’ Liquorland which will be rolled out in the coming months.

The Australian business of the global Mars conglomerate has increased sales of its chocolate bars by about 18 per cent since 2020, and expects a new paper-based wrapper for the flagship Mars bar to add momentum.

The paper-based wrapper on the product is being rolled out through supermarkets led by Woolworths and Coles, and petrol and convenience store outlets, with Australia a pioneer ahead of similar moves in the rest of the Mars empire.

Mars is one of the world’s largest consumer companies. It is privately owned by the US-based Mars family and generates annual sales of $US45 billion ($66.3 billion).

Mars Wrigley Australia chief financial officer Duncan Webster said the group’s Ballarat factory in country Victoria, which produces about 88 million chocolate bars annually, had been the focus of heavy investment to bring about the change. He said the shift away from plastic-based wrappers would remove about 360 tonnes of plastic from the product’s supply chain. “It’s the first in the Mars world,” he said.

Mr Webster said it was too early to tell whether inflation in raw material inputs in Australia had moved past its peak.

“It’s really difficult to actually call that,” he said. There were many moving parts in the supply chain and still too much uncertainty about inflationary aspects. Mars Wrigley also operates a factory at Asquith, in the outer northern suburbs of Sydney, that makes chewing gum and mints.

Mr Webster declined to forecast where the company thought official interest rates might be headed in Australia, but said the chocolate bar and confectionery market in Australia was historically resilient in economic downturns. People still wanted a small “treat” in tougher times. “Our products are still very much seen as a treat,” he said.

The Ballarat plant, which employs about 400 people, has had almost $100 million of upgrades and capital spending in the past three years. The shift to paper-based wrappers was just a small component of that.

Back to the future

The plant makes three big chocolate bar brands. Mars is the biggest seller which 42 million bars sold annually in Australia, followed by Snickers with 36 million and Milky Way with almost 10 million. Production has lifted by 18 per cent from 2020 when the group sold about 74 million bars.

Mr Webster said supermarket sales make up a substantial chunk of sales in Australia, while sales in the “on the go” segment in petrol stations and convenience stores was also an important market.

There is also a “back to the future” element to the wrapper change; the original Mars bars which hit the market in the 1930s had paper wrappers. Packaging giant Amcor has worked with Mars Wrigley for almost three years on the development of the new paper wrappers.

The Mars business also has a large pet care and pet food business in Australia with brands including Pedigree, Whiskas and Purina.

The Mars businesses in Australia produced annual revenues of $1.68 billion in 2021, its latest set of financial statements lodged with the Australian Securities and Investments Commission show. This compared with $1.66 billion in the previous year. The Mars group in Australia made a profit after tax of $136 million in 2021, up from $107 million.

Mr Webster said the position of chief financial officer across the corporate sector was increasingly becoming more broad, and had shifted away from being a “number cruncher” compared with two decades ago.

“You’ve got a unique position to be an enabler,” he said. While CFOs still made hard financial decisions, they had substantial strategic input across the group.

Fast food operator Restaurant Brands says it is pushing through price increases at stores around the globe as inflation continues to eat into margins at its KFC, Pizza Hut and Taco Bell franchises.

The Auckland-based business, which runs more than 480 food outlets across Australia, New Zealand and the US, told investors on Monday that first-quarter sales were up by 12 per cent to $NZ308.6 million ($461.3m) compared with the same time last year.

The fast food giant’s sales growth was backstopped by price increases in some markets and by the addition of 12 new stores across the group’s network. At the same time, the business warned that inflation was still having an impact on its bottom line.

“Worldwide inflationary pressures continue, albeit at a lower rate. While the company continues to implement price increases in response to these increased costs, margins remain under pressure,” the company said in an update filed to the ASX.

Restaurant Brands runs KFC, Pizza Hut, Taco Bell and Carl’s Jnr in New Zealand, as well as KFC and Taco Bell stores in Australia and Pizza Hut and Taco Bell in the United States.

The group’s New Zealand stores had a 9.2 per cent jump in sales to $NZ129.4 million, driven by price increases and easing of pandemic-related restrictions in NZ last year.

Sales in Australia were up by 15.5 per cent to $67.9 million, as sales in shopping centres and inner-city locations recovered to close to where they were pre-COVID.

Stores in California were weaker, declining by 4 per cent on a same-store basis for the quarter due to customers being more conservative with their spending, and “shifting to value-oriented menu and promotional items”, the company said.

Analysts have been cautious on quick-service food retail over the past few months over fears that consumers are eating out less and trading some of their fast food spending for making meals at home.

Shares in pizza giant Domino’s have declined by close to 22 per cent year-to-date, with the stock plunging in February after the company revealed it didn’t get the balance right when it increased the price of menu items in the face of inflationary pressures.

The most recent grocery price tracking data from investment bank UBS shows that while the price of many common fast-food ingredients is normalising, products still cost about 10 per cent more than at the same time last year.

Dairy product prices jumped 17 per cent in the March quarter compared with the prior corresponding period, while chicken prices were up 14 per cent and beef up by 2 per cent compared with the March quarter in 2022.

Australian Bureau of Statistics retail spending figures suggest that while retail spending has been flat at the start of this year, food spending has continued to grow steadily. Australian consumers spent $13.8 billion on food retail in February 2023, up 0.2 per cent compared with January.

Restaurant Brands shares closed the trading day flat at $6.38.

Aldi is counting on shoppers returning to the German discounter as the rising cost of living pushes Australians to its more affordable grocery range, and suppliers begin to reduce the frequency of price increases.

The discount supermarket aims to be between 15 per cent and 25 per cent cheaper than larger rivals Coles and Woolworths but, like them, its prices have been forced up by producers and wholesalers across the board.

Last year there were more than 2000 out-of-cycle price increases, but the rate of supplier requests has slowed, and some cost inputs are normalising, Aldi managing director for commercial and buying Jordan Lack told The Australian Financial Review.

The 2000 price increases “is far and away the highest rate we’ve ever seen”. “Some of those cost inputs are definitely normalising,” he said.

“The international freight rates have definitely come back significantly over the last three months. So, there’s some internationally sourced products where there’s some benefit.

“But, unfortunately, there’s cost increases which are still coming through on some commodities and other factors. I think it’s going to be a bit of a category-by-category proposition over the next bit of time.”

He confirmed research by UBS that found fresh food price inflation is volatile, and susceptible to weather events which could squeeze supply.

Mr Lack would not disclose top-line sales in the last quarter of 2022, but said they were up 13.2 per cent year-on-year, driven by changing customer behaviour, as customers switched some or all of their spend to Aldi from other retailers and existing shoppers upped their basket size.

Aldi’s retail prices rose by about 7.8 per cent on average last year, with its cost inflation sitting at about 9.2 per cent. Mr Lack said this showed Aldi was absorbing some of those prices hikes.

That is in line with 7.7 per cent food inflation at Woolworths, and 7.4 per cent at Coles in the December half.

Asked if that implied the estimated profit margin was around 8 per cent last year, Mr Lack said that was “wildly inaccurate”, and less than half that figure.

“I think our profits will be below that of our competitors as well,” he said. “We have shareholders which have a really long-term view to the business. And that allows us through the good times, and the bad, to make sure that we set our business up for sustainable growth in the future.”

Mr Lack said IRI market data showed Aldi had about 9.5 per cent market share, achieving a 1 per cent gain over the past 12 months. Aldi’s share plateaued at about 10 per cent to 12 per cent before the pandemic struck.

Its business was tested by COVID-19 and international shipping challenges. Consumers also sought convenience over price, and favoured neighbourhood stores over frequenting shopping centres during that period.

But Mr Lack said more shoppers were coming to Aldi more frequently, estimating a cumulative $3.1 billion in annual savings.

“Those customers who are more loyal customers are shopping more, buying more with us seeking out value,” he said.

An average family of four that shopped at Aldi saved about $2400 a year on their grocery bill, according to PwC data. The PwC analysis looked at the price gap between Aldi and competitors using Aldi’s internal price data and the retailer price comparisons for major competitors.

Aldi has 580 stores in Australia and has pushed into Western Australia and South Australia. It also operates a corner-store format in inner-city locations.

Mr Lack said Aldi planned to add to its network in coming years, including “experimentation with the corner-store format”, and refurbishing existing sites, but had no plans to bring the US-based Trader Joe’s brand to Australia.

Local boss Tom Daunt will be elevated to global joint managing director of the German supermarket business next month. The Australian operation will be led by Anna McGrath and Marietta Schorn.

Orlando Rodriguez has been appointed MD of Coca-Cola Europacific Partners (CCEP) Australia, effective May 1.

He is the current VP of customer service & supply chain for Australia, New Zealand & the Pacific with strong industry expertise within Australia.

Peter West, regional MD for CCEP Australia, Pacific and Indonesia Business Unit (API), said he is “delighted” Rodriguez is stepping into the role and driving the business forward.

Of his appointment, Rodriguez said: “I am very honoured to have the opportunity to lead CCEP in Australia. It’s a business with incredible people who collectively have created one of Australia’s best places to work.”

West will continue as regional MD for the CCEP unit overseeing Australia, the Pacific and Indonesia while Rodriguez will assume the day-to-day responsibility for the Australian business.

Rapid grocery delivery service Milkrun will close on Friday and make hundreds of staff across Sydney and Melbourne redundant after investors refused to put more cash into the loss-making start-up.

Its speedy deliveries, initially guaranteed to be completed within 10 minutes, delighted customers who enjoyed the company’s irreverent marketing and pledge to pay workers an hourly wage unlike competing services.

But Milkrun’s failure, along with those of four competing businesses, suggests its model does not work against Australia’s supermarket giants, which have extensive supply chains and partnerships with gig economy delivery firms that need not pay minimum wages.

The demise of the totemic company puts a full stop on an era when low-interest rates and pandemic lockdowns spurred investors to put huge amounts of money – $86 million in Milkrun’s case – into risky ventures.

Milkrun chief executive Dany Milham, who had once forecast his company would be one of the country’s biggest and get into markets including pharmacies and payments, announced the closure on Tuesday. He blamed the economy and capital markets for his decision to close the business, while asserting it has sufficient cash to pay staff redundancy entitlements and suppliers.

“We’ve always been committed to doing things the right way, and winding down the business while we still have a sufficient cash balance enables us to ensure our people and suppliers are paid in full.

“I understand this is difficult news to receive, and I’m sorry to have to deliver it,” Milham said in a note to staff. “I’m so proud of the amazing business we have built and of the growth we have achieved.”

The family offices of Atlassian founders Mike Cannon-Brookes and Scott Farquhar had invested in Milkrun, alongside the giant American fund Tiger Global Management and Australian technology investors AirTree Ventures.

Milkrun was already faltering in February. It cut 20 per cent of its staff, including the marketing team that had won it attention.

A spokeswoman for the company claimed at the time that all its delivery hubs were profitable or breaking even and said it had enough cash to last for 12 months. Competing firms Voly and Send failed last year, and this masthead revealed last week that international giant DoorDash was ending its similar “DashMart” service.

Milkrun had repeatedly failed to raise more money from investors. Documents obtained by The Age and The Sydney Morning Herald showed it was bleeding money to win customers and deliver orders, making it an unattractive prospect as interest rates rose and investors became more conservative.

A Milkrun spokesman refused an interview request on Milham’s behalf and declined to answer questions about its finances or how its wind-up would be handled. One of Milkrun’s largest investors, Australian venture capital firm AirTree Ventures, defended its decision to put money into Milkrun in a private email to its backers seen by this masthead.

AirTree said that Milham, who had previously co-founded mattress company Koala, had experienced past success. And the firm said it believed that if only Milkrun could get big enough, it would start making money and “reimagine the customer experience for consumer goods”.

AirTree had already cut the value of its stake in Milkrun, which represented a small percentage of one of its funds, to the cost of its investment before it collapsed. Its performance will now be further dented.

“With great upside potential comes risk, and if we don’t see some failures, we’re likely not adding enough risk into the portfolio for outliers to emerge and become fund returners,” AirTree wrote. “With that said, this wasn’t the outcome we hoped for.”

Jackie Vullinghs, the AirTree partner who led the investment, said she felt the downside had been justified by the potential upside while the Atlassian founders’ offices declined to comment.

The Transport Workers’ Union, which represents delivery riders, said the collapse showed gig economy companies were undercutting traditional employers in the sector and urged the federal government to speed up planned reforms.

“Milkrun was a company trying to do the right thing by its workers, but you can’t do the right thing and stay in business unless there are minimum standards,” said Michael Kaine, its national secretary.

California-based cultivated meat company Good Meat has received clearance from the US Food and Drug Administration to bring its lab-grown chicken to market, according to agency documents released on Tuesday.

Several companies are working to bring cultivated meat to market in the US, and must receive approval from both the FDA and the US Department of Agriculture before they can sell their products.

Good Meat’s chicken is the second cultivated meat product to receive a “no-questions” letter from the FDA after California-based Upside Foods got the regulator’s green light for its cultivated chicken breast last November. The letter means the FDA accepts the company’s conclusion that its product is safe for humans to eat.

“We have no questions at this time regarding Good Meat’s conclusion that foods comprised of or containing cultured chicken cell material [are] as safe as comparable foods produced by other methods,” the agency said in a March 20 letter to the company.

Good Meat plans to initially sell its product at restaurants owned by chef José Andrés, known for his work on global food security. The company has been selling its chicken on a small scale in Singapore since 2020.

“I am so proud to bring this new way of making meat to my country and to do it with a hero of mine, Chef José Andrés,” said Josh Tetrick, co-founder and CEO of Good Meat, in a statement.

Cultivated meat is derived from a small sample of animal cells which are fed nutrients and grown in steel vats before being processed into cuts of meat. Cultivated meat companies say the product provides environmental benefits because it could cut down on the 14.5 per cent of the world’s greenhouse gas emissions derived from livestock.

• Reporting by Leah Douglas; Editing by Emelia Sithole-Matarise, of Reuters.

Seeking to satisfy the growing demand for alternative milk, New Zealand beverage manufacturer Free Flow is to open the country’s first dedicated oat milk production facility this year.

The plant will expand the company’s existing manufacturing footprint with an additional 2500sqm of production, and 4000sqm of warehousing, with the capacity to produce 50 million litres of oat milk each year.

And in a world-first – developed with German machine manufacturer Krones and brewing technology expert Keones – the same machinery used to produce plant-based milk can also be used to process beer.

Scott Day, co-founder of Free Flow Manufacturing, shared that the demand for alt-milk has “skyrocketed” in recent years, outpacing traditional dairy, with no signs of slowing down.

“Grocery spending on plant-based milk in New Zealand increased by 44 per cent from 2019 to the end of 2022, with sales jumping from $61 million to $88 million,” explained Day.

Despite this, he explains, New Zealand has had to rely on imported products to meet demand.

“The launch of our new plant-based milk facility in East Auckland is an important milestone for the sector, enabling it to reduce its carbon footprint, improve innovation and produce premium products locally for health-conscious consumers worldwide,” he added.

Free Flow also partnered with plant-based milk brand Otis, allowing the South Island company to relocate the manufacturing of its oat milk from Sweden to New Zealand.

Otis co-founders Tim Ryan and Chris Wilkie launched their first oat milk product in 2018.

“As we scaled up our production, we weren’t prepared to compromise on quality, and because of this, we had to ship our New Zealand oats to Sweden for manufacture due to the lack of a local partner that has the technology required to produce premium oat milk to the gold-standard we demand,” they said.

“We’re thrilled to have finally cracked this with Free Flow and truly believe that New Zealand will be a force to be reckoned with when it comes to producing dairy and non-dairy milk.”

Premier Investments has delivered $174.3 million in first half profit, with Jacqui E securing its highest ever sales result in over a decade.

Premier Retail reported global sales of $905.2 million for the first half of the 2023 financial year, up 17.6% on the same period last year. Earnings before interest and tax (EBIT) grew 12.2% to $221.8 million.

Premier Retail is the parent company to Australian fashion retailers Peter Alexander, Jay Jays, Dotti, Jacqui E, Just Jeans and Portmans.

Premier Retail CEO Mr Richard Murray confirmed a strong start to the second half, with total sales for the first six weeks through February and into March up 7.7% on 2H22. 

“We have opened the second half strongly and are well-positioned to drive growth from our powerful retail model. We remain focused on continuing to deliver relevant and quality products, enhancing our digital offering, optimising our store portfolio and identifying new store opportunities to support growth."

Across its portfolio, Peter Alexander reported the largest percentage growth in sales for the half against pre-pandemic, up 80.7% to $261.7 million. Against 1H FY22, its overall sales increased 15.1%.

Peter Alexander has identified 20 - 30 opportunities for both new or larger format stores in the near term to better showcase a wider product offering that has been developed in recent years.

The brand is also planning for future offshore market opportunities, including a partnership agreement with a global cross border e-Commerce platform provider to grow Peter Alexander internationally across 35 countries.

The launch in 1H24 will be supported by digital marketing programs in select countries.

Premier Investments' other apparel brands collectively delivered $452.8 million in sales for 1H FY23, up 14.3% on 1H FY22 and up 15.1% on 1H FY20.

Just Jeans, Portmans and Dotti all delivered record sales in the first half of $162.6 million, $87.6 million, and $59.5 million respectively.

Jacqui E delivered its highest first half sales result in over a decade of $43.5 million, while Jay Jays delivered its second best first half sales result in the past decade of $99.6 million.

Online sales across the group hit $170.9 million, down 12.5% on 1H22 but up 75.8% on ‘pre-COVID’ 1H20.

Sydney specialty coffee roaster Single O has never stayed still for very long.

Set up in 2003 by co-founders Emma and Dion Cohen in the heart of Surry Hills, at a time when coffee beans came in generic, scantly marked bags imported from Italy, Single O has been a pioneer in raising appreciation of bean flavour profiles from a particular region and driving the harbour city’s sophisticated coffee culture.

But before they made a name for themselves, many of their first customers were Surry Hills locals – as well as some of the biggest names in the dining industry, including Kylie Kwong, Matt Moran and Peter Gilmore. Many of these early patrons are still customers.

“They could see what we were doing,” says Emma of the industry chefs. “It’s like trying to explain that the piece of meat they put on a plate was similar to the coffee you’re serving in a cup,” interjects Dion.

“We worked really hard, with a lot of grassroots talking, to build up a community within a year. They may be into wine, or they may have understood craft – just quality lovers [who] understood,” Emma finishes.

Over the past 20 years, they’ve helped popularise different forms coffee (the pair estimate black coffee consumption has risen from 2 per cent to about 30 per cent) and now supply coffee beans to hundreds of cafes around the country (they were hesitant to provide an exact number but said one in every four venues named in last year’s Good Food Guide was a customer).

Single O – a shortened version of “Single Origin” given by customers and then formally adopted by the Cohens – has won a loyal following thanks to their penchant for breaking the rules, often their own. In the early days they prided themselves on their deliberately plain coffee bags that didn’t feature their logo or branding (“it was about what was in the bag”).

Then they changed their mind, and didn’t look back. The coffee bags have become a canvas for local artists, many of whom approach Single O themselves. Other innovations have also set them apart: the duo pioneered The Juggler, the hot milk dispenser installed by some cafes, which reduces waste by about 80 per cent.

Then there is the world-first self-serve batch brew bar, inspired by beer taps, designed to help filter coffee lovers skip the queue. Coffee is also integrated into the menu in creative ways; Single O’s banana bread is served with warm coffee-infused butter. Then in the middle of the pandemic, Single O set up its first international cafe in Tokyo and now supplies its beans to over 100 cafes in Japan, a difficult market for Western businesses to crack.

“Take something that people are familiar with … and go, well, surely there must be a better way,” says Dion. “We’re not very good at cookie-cutter,” Emma adds.

The roaster’s mercurial nature is why the Cohens are largely unconcerned about sales volumes amid economic storm clouds and tightening household budgets that have already begun to hurt consumer spending. After all, Single O practically sailed through the 2007/08 global financial crisis.

“We did not see a dip. If anything, we grew,” they said. “People stuck to quality, they appreciate something that’s important to them. It’s not $50, it’s three or four or five bucks.”

Like every other retailer, Single O has seen prices of everything increase across the board; Dion rattles off a laundry list, from the price of beans to the price of freight, energy, wages, and rent. Across the country, countless cafes have lifted coffee prices to offset the higher costs.

Single O was no exception – in fact, they were one of the earliest to move. But rather than being apologetic about it, they got loud.

“We took a stance to be quite vocal about that on our channels,” said Emma. “We stand to make sure the cafes we support survive. You gotta put the price up. We can’t control inflation,” added Dion.

Guided in large part by “grassroots insights” and “gut instinct”, the pair’s commitment to maintaining coffee quality and being very picky about the cafes they supply to (among a dozen enquiries a week, they might pick one) has seen them earn loyalty among customers and staff alike and provided a buffer during the COVID lockdowns.

The duo has attracted a strong management team of “black sheep” from the corporate sector, former employees of coffee behemoths Nespresso and JDE Peet’s. Overseeing operations is general manager Michael Brabant, a former brand manager at ASICS and Bacardi, who has just notched six years with the specialty coffee roaster.

As the business celebrates its 20th anniversary, the Single O co-founders aren’t quite sure which way the wind will blow or where that will take them. But they are sticking to their guns.

“It pays to be different. In more ways than one,” the Cohens say in the same breath.

“You don’t always have to act like a business to attract more business.”