Speaking to the 2019 Annual Leaders Forum edition of National Liquor News, Rod Pritchard the Interim CEO of ALM detailed the great shape the business is in and how it aims to continue delivering sustainable growth for its independents into 2019.
- How was 2018 for ALM? What were the highlights? What were the challenges?
It was certainly an interesting year, particularly as we began the transition of leadership following Scott Marshall’s appointment in March to head up the IGA Supermarkets and Convenience business. Testament to Scott’s leadership, the transition has been relatively seamless, with the Australian Liquor Marketers (ALM) leadership team focused on executing the plans that were in place for 2018, and beyond. On a personal note, I have really enjoyed stepping up to fill the CEO role over the balance of the year, and have greatly appreciated the support of our customers and suppliers, and of course, my ALM colleagues in ensuring a smooth transition.
- Chris Baddock will step into the CEO role in 2019, what value and direction do you think he will bring to the business?
Chris obviously brings a wealth of industry experience to ALM, from both his supplier and retailer background. Apart from the obvious passion and energy he will bring to the role, I also expect he will bring new ideas, and a different perspective and outlook on the partnership opportunities that exist in the market for ALM, our customers, and of course, suppliers.
- What will be the immediate focus for ALM in 2019?
Our mantra at ALM (and Metcash) is ‘Championing Successful Independents’, and this will remain our highest priority in 2019. ALM will continue to seek ways to partner with our suppliers to improve our overall offer to our customers, and ensure that we deliver sustainable growth for our stakeholders, in a market that is becoming increasingly competitive.
- What challenges and opportunities do you see for ALM and IBA looking ahead to 2019?
The market has not been without its challenges, however, we remain optimistic around the outlook for the year ahead. All markets have realised value growth over the past year, and independent retail appears to be in a healthy shape across the board. The Independent Brands Australia (IBA) network represents more than half of the total ALM business, and continues to go from strength to strength. The on-premise channel has certainly enjoyed a resurgence in recent years, so that also represents an exciting growth opportunity for ALM into the future.
- How do you plan on continuing to build and improve the IBA network into 2019?
Our IBA offer is fully focused on delivering against the needs of our shoppers. We tailor our offer for each of our retail banners in the IBA network, to best meet the changing shopper expectations across the various retail channels that exist in the market. We utilise the shopper insights and data that we have at our disposal to make informed ranging and programming decisions, and to fine tune our offer accordingly. We recently announced our partnership with Complexica – who are experts in the artificial intelligence field – and we will be rolling out the new promotions platform that they have developed for us in the first quarter of 2019. This is a particularly exciting initiative for us, and we expect our retailers and suppliers to mutually benefit from the outputs of the new platform.
- Metcash reported positive earnings in its first half liquor results. To what do you attribute this success?
There are a number of factors that helped deliver these results. We have grown volumes within the IBA network, and across all major contract customer groups. We have also attracted new business to the ALM network in the past year. Beyond that, the various Container Deposit Schemes (CDS) and the premiumisation trend continue to have an inflationary effect on the sales value growth across the industry.
- Have you noticed any changes in shopper behaviour?
Shoppers have been gravitating back to their local shopping strip in recent years, which is ultimately good news for our retail network. There has also been an increased trend for shoppers seeking to support local producers and manufacturers. We encourage our retailers to identify and support local suppliers to create a point of difference in their offer, and to leverage the personal connections that they forge with their shoppers, to make appropriate product recommendations.
- What do you expect will be the big trends of 2019?
We fully expect to see consumers increase their desire for ‘personalised’ offerings. Consumers have been drifting away from ‘mainstream’ brands over recent years, in search of new offerings, across new segments. They are more than willing to try new products, and are prepared to pay more for perceived ‘premium’ or ‘craft’ brands that they most relate to. The same goes for the way that our customers interact with brand marketing and advertising material, as well as the consumer brands they are engaging with. Mainstream simply doesn’t cut it anymore. This represents both the biggest challenge, and opportunity, providing we get our offer right.
- Can you tell us a bit about the Mfuture program and how it will benefit your network?
Mfuture is a Metcash wide initiative, focused on identifying and driving sustainable growth initiatives for the future, across each of our business pillars. We have been working in recent months on re-setting ALM’s long-term growth strategy, and will be sharing more on these initiatives in the months ahead. Stay tuned.