Australia is presently a multi-speed economy, with some sectors experiencing strong growth and others addressing systemic risks. The high performing companies are reconsidering how they can tweak operations to maintain and even increase profits. Here, leaders from three businesses explain how they are responding to the risks in the economy.
Monster Health Foods is a mid market cereal brand. CEO Trevor Lauman says new market entrants are his main challenges.
Kim and Trevor Lauman at the Monster Health Food Co facility
“Our national market share is around 1.5 per cent, in a highly fragmented, low barrier to entry market that is muesli. We approach innovation from the perspective that time poor consumers are looking for convenience products. We offer ‘breakfast in a bag’ that you can open and eat straight from the bag with milk or yoghurt. It has been designed with “busy mornings” in mind, allowing you to eat at home or on transport without mess.”
He says the business is well positioned for future growth both short and longer term. “Our products, muesli and porridge, are in the only growth categories in the breakfast cereal market, which is otherwise stagnant. There is a clear trend towards ‘better for you’, premium and authentic products in all food categories.”
Lauman is anticipating a good year ahead with nothing on the economic horizon that is of real concern. “Our information is that commodity prices for ingredients such as nuts will be either stagnant or will come off, potentially lowering ingredient costs. We believe in putting in place capacity ahead of sales growth, and to that end we have just bedded down new robotic packing machinery. This will completely automate our packing line providing us with a production base which can handle three to five times the current output without further investment.
“We have worked with quality distributors in each State to ensure we achieve growth with the independent supermarkets and retail outlets. In addition, we are actively working to grow our business in the convenience market which is another growth market, and have had success with Coles Express nationally and with [grocery chain] On the Run in South Australia.”
According to Lauman, consumer preference for food that is ‘better for you’ is good for his business. He says being able to provide a healthy product in the breakfast cereal market stands the business in good stead with consumers. “One year on from the frozen berries scandal, we are also the first to offer consumers country of origin labelling on our products, something they have been demanding. Our online sales are also strong.”