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Coles/Woolies > Baking the competition

Bread

Call me a tight-ass, but when I buy my bread, I store it in the freezer for a longer shelf life. Maybe it’s habit because that’s what my old folks use to do when I was very young, given bread is a staple in a European diet. Or maybe it’s because I’m single and live in my own place, so I need to store it so it doesn’t go mouldy too quickly Or it could be the low carb diet I’m on, but either way, soon, I may not have to store my cape seed loaf in the freezer.

Goodman Fielder, the guys behind Wonder White and Helga’s bread is looking at ways to extend the shelf life of bread, without using preservatives. It says in Europe and North America, the model was for bread to have a 10 day shelf life.

Why is the company looking at doing this? Well, it’s trying to cut supply chain costs by reducing bread deliveries to maybe every second or third day. It’s been prompted because of the aggressive pricing policies by Coles and Woolies which have cut their home brand bread, to $1. It’s getting too hard for companies like Goodman Fielder to compete.

It’s a sentiment being shared by tinned food maker Heinz. The US based company has criticised the major supermarket chains for flooding the market with home brand products, which have squeezed its profit margins.

One beneficiary may be online grocery retailers, many of which have reported a rise in the number of manufacturers embracing the platform.

The only problem I find with online shopping, is that I’m more of a buy as I need it kind of person. It’s also handy that there’s a Coles across the road… and an Aldi opening up on the opposite corner.

That’ll be great for competition, great for my wallet, and great for another blog.

MEMO

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Discussion

2 thoughts on “Coles/Woolies > Baking the competition

  1. I’m a bit perplexed by these statements from Goodman Fielder. I understand that a section of the community will go for the most budget-minded options, but there are other sections of the community that will go for higher quality brands, such as Goodman Fielder. Adding additional preservatives to their quality products will, at least emotionally if not nutritionally, devalue their product back inline with the budget end of the market. The “higher quality” sector will just go on to another brand and will not reduce their exceptions of quality over price. In this race to the bottom, GF want to compete with Coles/Woolworths for who can produce the lowest quality product with a razor-thin profit margin. I’m happy to pay $6 for my soy and linseed and bung it in the fridge.

    Posted by Sean Hatton | November 23, 2011, 8:23 am

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