Coles and Woolworths – will we vote with our wallets

I have been thinking about the brave people who have stood up to Coles and were counted on behalf of farmers and suppliers everywhere.

John Durkan

Coles CEO John Durkan at the $80m Devondale Dairy facility opening in Laverton Photo The Australian See story here

The whistleblowers who have  gone to the ACCC and achieved these outcomes ‘Humbled Coles admits it did wrong’

FOOD and liquor giant Coles faces penalties of $10 million and may have to pay as much as $16m in refunds after admitting that it engaged in unconscionable conduct with small grocery suppliers.

In an embarrassing mea culpa, Wesfarmers group managing director Richard Goyder and Coles managing director John Durkan apologised unconditionally for the retailer’s ­dealings with suppliers after reaching a historic settlement with the Australian Competition and Consumer Commission (ACCC).

“I believe that in these dealings with suppliers, Coles crossed the line and regrettably treated these suppliers in a manner inconsistent with acceptable business practice,” Mr Durkan said.

“Coles sincerely regrets and apologises for its conduct in these dealings.”

I was talking to some-one just a few weeks ago who participated in a series of supplier roundtables Coles CEO John Durkan played an active role in. This person said Mr Durkan was laughing and joking like he didn’t have a care in the world

Looks like he knew he had Wesfarmers support no matter how the case turned out

Mr Goyder said both Wesfarmers and Coles “sincerely regretted” the unacceptable conduct, but voiced his support for Mr Durkan, dousing concerns he would be forced out for playing a major role in one of the cases brought by the ACCC.

Now its Woolworths turn to provide answers to the ACCC, See story here Woolworths accused of bullying Suppliers

WOOLWORTHS has been accused of bullying suppliers into paying millions of dollars to fund a discount war, prompting the competition watchdog to examine whether the supermarket giant is in breach of competition and consumer laws.

How brave do these supermarket suppliers whistle-blowers have to be. Its not as if they alternate channels of distribution the size of Coles and Woolworths in this country. They are the courageous people who are prepared to stand up for what is right first and foremost

I have appeared before the Senate Inquiry on Milk Price. It wasn’t much fun. I have even supported a fellow farmer who went to the ACCC about what he ( and I ) believed was unconscionable conduct towards a number of dairy farmers. He had been fighting this cause for quite a while and he told me all he needed was one or two more farmers to to back him up. . No matter how much proof we got it was obvious we were wasting our time.  Those were the days before Rod Sims headed up the ACCC.

I have even been threatened. I remember the day well. The phone call came through the morning after I won the Bob Hawke Medal. I remember smiling to my self when I saw who the caller was and actually said I cant believe XXX would be the first person to ring and congratulate me . Well he wasn’t, he was threatening to sue me for something I said at the senate inquiry. That was a very traumatic day spent on the phone to my lawyer to see if he had a case which of course he didn’t.  But it left a nasty taste in my mouth and I am in awe of the whistleblowers who start the process and remain in it for the long haul

And sadly do consumers really care?. Do we stop shopping in Coles and Woolworths.? Will this effect their bottom lines?. Will they just find more and less obvious ways of putting pressure on their suppliers?

You know what I think. I think  many of these whistleblowers are Woolies and Coles staff. It must be very tough being asked to do things you know in your heart are wrong. I will guarantee not too many of them are laughing and joking when they reflect on the consequences on the actions of their employer,

This Christmas as I have a glass of wine and share Christmas with my friends I will toast the brave whistle-blowers and the ACCC and hope that we as consumers will find some way of making their efforts worthwhile

Vote woth your wallet

Agriculture time to put your best foot forward

Recently I gave a presentation on Sustainability and very proudly used the dairy industry’s definition as the benchmark

“Our vision for sustainability is to enhance livelihoods, improve wellbeing and reduce our environmental impact so that Australia’s dairy industry is recognised worldwide as a responsible, responsive and prosperous producer of healthy food”
Australian Dairy Industry Sustainability Framework

My presentation was followed by a presentation from one of Australia’s leading marketing gurus and when she put up this slide she challenged the dairy industry to review their definition quoting Seth Godin

Seth Godin

The light when on and I thought how right is she.  I am reminded everyday how too often  the dairy industry and agriculture for that matter fails to be on the front foot. We are at least less reactive and more responsive but how many times do we take the lead.

And there is no better example than the way we market our milk.

These days thanks to twitter I don’t need to read the papers from front to back as I have a number of very astute Twitter followers who can read my mind and share with me newspaper articles they think will be of interest.

Yesterday this story from well known dairy journalist Andrew Marshall lobbed into my twitter feed Milk’s Local Brand Push. It wasn’t until I got to Mike Logan’s comments and thought at least somebody gets it

Deja Vu. It was at least twelve years ago that I sat around the table with the marketing team at Dairy Farmers head office workshopping the latest ideas in milk packaging and labelling. At the table was also the bright mind that was Ed Geldard  who was sadly killed in a plane crash in 2007. Dairy Farmers was in the middle of a logo change and a total makeover of their packaging and they were keen for my input. Their research had shown that it might be a great idea to put farmers on the packaging. I remember sitting there thinking that sounds pretty logical cant believe somebody hasn’t done it before. My feedback was I suggested they go one step further and also include farmer stories and market some regional milk.

I was subsequently mortified when I saw what they had in mind. Yes they were going to put a farmer on the pack but not his face his back. After a while they took the plunge and introduced the world to their farmer Martin Hodge but no way in the world would they even think about regionally branded milk.

There were plenty of farmers at that time who had the same idea about putting farmers on the label and marketing and selling regionally branded milk. After talking to Dairy Farmers for a few years trying in vain to get them to launch a NSW south coast brand of milk  a group of their gusty farmers started their own processing plant and did it themselves . Wow did Dairy Farmers come down hard on them. South Coast Milk also had the hide to put a farmer on their pack and Dairy Farmers threatened to sue them. Twelve years later its now the ‘in thing’ to put farmers on the pack, put their stories on the back and do regionally branded milk and in the main what a giant waste of time and effort it is

Due to a new role from time to time I find myself in Woolies gazing at milk fridges. Its always the same the shelves are half empty, plenty of Woolies brand everywhere and ten minutes required to find the brand I am looking for.

Empty Shelves in Woolworths

As you can see because of the way the shelves are tilted (see picture below) to encourage the bottle to move forward it is extremely hard to see the label.

Whose milk is this

The company as you can see below who have done it the best are very obviously A2.

A2 milk in Woolworth fridge

Dairy companies today have to be very astute indeed with their labelling especially with the 3 litre pack size aimed at families and in a lot of cases the 2 litre pack.

You may think my post harsh but if you were a dairy company and the shelves you were selling your best selling brands from look like this.

Whose milk is this

Where would you put your brand?. I myself would definitely leave the home brand label where it is

Shame on you Woolworths set to sell sex toys in the milk isle

Newspapers pay people whose sole job is to come up with headings for news articles that will motivate people to buy newspapers. Woolworths latest foray into innovative fast moving consumer goods must be a dream come true for them. Despite the temptation to use the tongue in cheek clever line from Brian Dodd @bushboywhotweet that Woolworths maybe ‘artificially screwing dairy’ I wont go there in the name of good taste.

What I would like to do this morning is reflect on this article in The Conversation Worried about Coles and Woolworths – then look in the mirror  and in particular these comments from the author

The greatest public concern has been the treatment of Australian farmers, particularly since the introduction of ‘one dollar per litre’ milk. So we should not be surprised that the major supermarkets have moved to stock more local produce and to set up supply arrangements that clearly benefit local farmers.

When customers complain, even retail gorilla’s listen!

Coles and Woolworths behaviour, however, highlights the underlying source of their marketing and their market power. The customers.

The two supermarket giants reached their current positions because people choose to shop at them rather than the competitors. We may rail against the closure of a small retailer when Coles or Woolworths opens up nearby, but the real cause of the closure is, well, us! As consumers, we choose to buy from Coles and Woolworths rather than the retail alternatives. We may complain but the low prices, the product selection, the convenience or whatever else, draws us in to buy at the major supermarkets and, in so doing, we slowly but surely push the retail competitors out of the market.

This is not anti-competitive; it is the very nature of competition. Businesses who best serve customers win. But when we complain, we should look in the mirror. Because it is our choices as consumers that decide who wins and who loses in the retail wars.

Put simply, Coles and Woolworths have succeeded because they are so damn good at giving us what we want!

…………. The major supermarkets are no angels. But they do respond to customers’ demands. So if you want more small grocers, you have the answer. Shop at them. But do not call on the politicians to make that decision for you.

On my previous post Coles Show Some Respect the very wise Greg Mills commented

What I found interesting about the Coles presentations was the issues management cycle slide. Coles had a ‘process’ and they stuck to it. Farmer objections where just an ‘event’ in the cycle to be dealt with. Which makes me think about what is the farmer ‘process’ to deal with these and other consumer issues. I suspect that there may not be a ‘process’ to deal with these issues by farmers and the food system, but rather the response is simply a number of events..

While I may not agree with Cole’s tactics I have learnt from this presentation and their FOCUS – Follow One Course Until Successful. I thinks it a good thing that this presentations is out there and being talked about. I hope that it gets some discussion going about how to deal with issues in the longer term.

Greg is right and I will be blunt it is not just consumers who have to take responsibility for their actions and stop expecting the government to be their white knight. Its time for farmers and Australian agriculture to convert supply chains into value chains.

Its tough out there dealing with the big 2. Is there a better current example than the latest very sad case of How private labels helped bring down Tasmania’s Tamar Valley Dairy

This company make yogurt to die for. I love it. It is divine and it appears working with Coles may have been their downfall

As Associate Professor of Marketing at Melbourne Business School Mark Ritson says in his article on Tamar Valley Dairy in BRW .

…. while around 25 per cent of all grocery sales in this country are now accounted for by private labels, in dairy categories that figure is closer to 50 per cent.

Given this proportion, it would be almost impossible for a dairy producer like Tamar Valley to grow revenues without manufacturing private labels and they aren’t alone. Almost every major branded manufacturer in Australia now makes some private label products for retailers or is trying to get a contract to start. In the case of Tamar Valley the company had clearly become extraordinarily dependent on this kind of trade supplying Coles, Woolworths and Aldi with private label yoghurts. The scale of its dependence was revealed last year when Tamar Valley’s founder and managing director, Archie Matteo, acknowledged that around 40 per cent of the dairy’s planned growth was built on a single, newly signed contract to supply Coles with private label yoghurt.

Unfortunately, manufacturing private labels is a very tricky strategic business.Private labels depend on a winning combination of prices that are 25 per cent to 30 per cent less than their branded competition but which usually return at least the same profit per unit sold to the retailer. That means that although the volumes involved in a private label supplier contract are gigantic the margins on such products are extremely tight. The nature of supermarket negotiation also means that no matter what the initial agreed supply price, there will always be future discussions on reducing it further ….

The margin pressure on private labels also means that retailers are constantly on the lookout for alternative suppliers who can offer the same quality commodity product at a lower supply price. And as private label penetration grows, more and more companies are offering their excess capacity for exactly that purpose.

The other big problem with supplying private label is the strategic schizophrenia it creates at the heart of a branded manufacturer. Tamar Valley Diary, like any other branded producer, should have had several clear strategic priorities that drove their business. They should have been focused on understanding and responding to the tastes of Australian consumers. They should have been working on product innovations to propel their Tamar Valley brand past its rivals on the shelf. And, most important, it should have been investing in and building the Tamar Valley brand to build brand equity, create differentiation and protect its market share.

The problem with private label supply is that it runs counter to all these principles. Producing private labels means manufacturing large amounts of commodity product, at the lowest possible price, without any innovation or branding considerations It also means focusing on one or two giant customers (the supermarkets) rather than the ultimate consumer for the product (you and I). As private label supply becomes an increasingly important source of revenues for a company its switches focus from branded innovation to commodity production. Its brands consequently begin to wither and fail making the company more and more dependent on private label supply to stay afloat. But, as Tamar Valley Dairy learnt this week, that’s a very fickle business to depend upon.

It would be naive to suggest that any supplier should avoid any and all private label supply. But it would be equally naive to become as dependent as Tamar Valley Dairy to sustain your business. Any company that builds their business on significant proportions of private label supply is making an enormous gamble in my opinion.

Very smart man Mart Ritson. I  would love to sit around the table with him and a group of like minded farmers

In reality just how do we deliver the change that agriculture must have? For farmers this will mean working beyond traditional boundaries and challenging the conventional thinking of primary industries and individuals. It will require a paradigm shift in thinking and a collaborative re-allocation of resources and responsibilities amongst all stakeholders in the value chain.

It will require deploying agriculture’s young people into schools to build relationships with the next generation of consumers. It will need innovative and fun ways of engaging the next generation of consumers in considering the issues affecting sustainable food and fibre production.

I have set up Farming Ahead of the Curve to do just that with a a suite of programs, training and networking opportunities that will change the way farmers and consumers interact, increasing value across all sectors.

These programs will provide a supportive environment, professional development, access to inspiring leadership, first class mentoring and training.

The legacy of these programs will allow farmers of all ages to participate in, and extract greater value from the fibre to fabric and paddock to plate supply chain.

I don’t know about you but I have had enough of others defining my future for me. I say its time to take control and get my dignity back  and farm ahead of the curve

FAHOC_Logo_Hori_RGB_WEB

Kudos where kudos is due Woolworths

This post is a salute to Woolworths. You might just be surprised where they are investing some of their profits.

3 Serves of dairy

And that’s just the cows!

Imagine the amount of land!

The people!

The infrastructure!

Supporting business!

The technology!

It takes to get your dairy products from cow to consumer!

Yes we all have to eat and that alone means that agriculture is not only important but vital.

Yet agriculture faces new challenges every day, including activist groups who see livestock farmers as the right hand of devil.

The key to debunking myth conceptions about modern agricultural  farming practices starts with the education sector. The key to success begins with partnering with the 250,000 teachers teaching the 3.5 million students in the 9,500 Australian schools.

Yogurt grows on trees

Once we have excited some of these 3.5 million students to consider careers in the agrifood sector, it is imperative that we deliver on the promise in order to retain them. Sadly we don’t do this well enough

Like our individual food and fibre industries, we need a better “supply chain” for young people to develop skills that enable them to engage, grow and take charge of their industries.

Currently, we see a number of programs aimed at developing individuals at various stages in life, but many lack the mechanisms to support and mentor and galvanize these people into roles that have meaning within our industries, in the medium to longer term.

There is no point training young people if we then abandon them; believing our job is done after holding workshops and camps for them.

If we don’t continue to develop our young people, we lose a generation of leaders, innovators and workers as they seek opportunities elsewhere.

There will be no-one to take over the farm, or work in our agribusinesses.

Excitingly we don’t have to start at the beginning. There is a great pathway in place. All it needs is more agricultural industries supporting it

clip_image004

This diagram identifies cross industry supported programs whose core business is developing next gen agricultural ambassadors, workforce and leaders  

This post is salute to Woolworths who is heavily investing in this space, albeit I am given to understand not as much as they have in the past.

I have spent a bit of time at Woolworths and yes there people who work there who are only driven by $ in the till and $ in shareholders pockets which ultimately mean $ in their pockets.

There also a lot of people at Woolworths who truly care about farmers. I know because I have met them and they walk the talk.

To help to develop and nurture Next Gen Ag Leaders Woolworths run a yearly program called the Woolworths Agricultural Business Scholarship Program (WABSP) offering 24 young people in agriculture between the ages of 18 and 35 the chance to attend

The course is practical as well as theoretical, and covers topics such as:  

• Business strategy and planning

• Agricultural value chain

• Successful business leadership

• Business finance

• Logistics and supply chain management

• The role of government

• Understanding retail

• Sustainability and environmental issues

• Personal development

You only have to see what the alumni have to say to see the potential outcomes it can deliver

At Art4Agriculture, an important part of our mission is to link our Young Farming Champions alumni with further opportunities within their industry and beyond to continue the journey of growth and leadership.

We actively encourage our Young Farming Champions to apply for the WABSP

2013 Art4Agriculture/Target 100 Beef Young Farming Champion Jasmine Nixon attended in 2012

Jasmine Nixon

Jasmine applied because she wanted to gain an increased understanding of the end consumer through broadening her industry knowledge and the paddock to plate concept.

Working in the quality control and assurance team at Teys Australia’s Wagga abattoir, which supplies meat products to Woolworths and other major supermarket chains Jasmine was looking forward to learning more about the end consumer and what is trending.

The meat industry is facing significant challenges and there is a greater focus on meeting the demands of the customer and gaining a better understanding of them – this is something that Jasmine feels is crucial to her role and the success of the company.

She saw the Woolworths Agricultural Business Scholarship program is about filling the knowledge gap and learning more about the supply chain and the logistical challenge of supplying fresh food to the nation.

Extract from http://www.beefcentral.com/p/news/article/2131

As the Australian farmers face all kinds of unrelenting changes in their environment, there is a need for individuals who are capable of turning strategy into reality.

There is a great “supply chain” for young people to help them develop skills that enable them to engage, grow and take charge of their industries.

Is your industry supporting it?

See Next Gen Ag Leaders Pathway supporting partners here

PIEF

PICSE

Horizon Scholarship Program

Art4Agriculture plus NSW Farmers who have just signed on and you can find our community Partners here

Woolworths Agribusiness Scholarship Program

Climate Champions This page needs updating Dairy Australia has withdrawn and AWI have come on board

ARLP

Nuffield

If you take the time to look you will notice some industries and supply chain partners pop up in every single one or almost.

Sadly the dairy industry is very much missing in action

What about the supermarkets who rely so heavily on our farmers.

Did you see Coles? No I don’t thinks so. But you may have noticed Woolworths directly sponsors 4 of the 7 and has provided support to another two in the past and commits more than $140K per year to its own Woolworths Agribusiness Scholarship Program

Kudos where kudos is due I say

Just before I go Here is another great idea Woolworths from one of our Young Farming Champions Kylie Stretton who has certainly crowd sourced for you here 

This post is another in the series. “Success is the journey not the destination and it’s the people you partner with that determine how fast you get there and how rewarding it will be”

Coles and Murray Goulburn announce their engagement

I got out of bed even before the roosters started crowing this morning as I was heading off to Perth to speak at the Agconnect Conference. I checked my emails first thing (as you do) to see if anything earth shattering had happened.

Low and behold something mind-blowing had definitely been announced overnight. Dairy farmers have been predicting Australia’s largest dairy co-operative Murray Goulburn would be storming the NSW/Victorian border since well before deregulation and overnight they did just that announcing a 10 year deal to supply the Coles home brand label

Exciting times indeed. Anybody who has met or heard  MG CEO Gary Helou speak  knows that  here is a man who is force to be reckoned with and he certainly has an innovative big picture vision for Murray Goulburn on the world wide stage. So I for one will be watching  with great interest to see if MG’s move to the domestic dark side provides a bright future for NSW and Queensland dairy farmers

Achieving this will be no easy gig. Woolworths and Coles have been rapidly increasing their stranglehold over supermarket market share highlighted by this Sydney Morning Herald article “Coles and Woollies put the screws on their competitors” ever since Coles got fair dinkum in 2008.

Woolworths is not only the most profitable supermarket in Australia, it is the most profitable supermarket in the world ( Coles comes in third after Wal-Mart)

image

Supermarket Retail Margins

Will the Coles and MG partnership be a marriage made in heaven?. Time will tell.  What I do feel is this move by Murray Goulburn is the change we desperately needed to happen. If his reputation is anything to go by Gary Helou is just the man we need to show the leadership and drive required to ensure dairy farmers supplying Coles get a fair deal

Just a quick reflection on this race to the bottom marketing strategy Coles and Woollies are determined to play out I am with Naked’s Adam Ferrier when he says

“Being the cheapest is a promise to nowhere. I fear the current marketing strategy is buying footfall, whilst eeking out anything aspirational the Coles brand had.

“Marketers will have a difficult time re-building the Coles brand after this current bout of Coles ‘the cheapest, daggiest, un-aspirational place to buy your groceries from’ has finished.

“You can’t just be the cheapest and sustain market share. Cheap still needs to be aspirational or fun or clever… Cheap is also increasingly starting to mean ‘we’re squeezing our suppliers’, something consumers don’t want to hear.”

So maybe this new way of doing business will be a win not only for farmers but also a big win for people power. Australian consumers have stood up and told the supermarkets enough is enough. Look after our farmers or we will vote with our very loud voices.

To see what some of the industry heavy weights have to say head on over to Milk Maid Marian’s excellent blog on this topic found here

This interesting comment from Simone Smith from the Weekly Times MG Finally Makes it Mark 

Statistics are from http://www.daff.gov.au/__data/assets/pdf_file/0007/2269762/aus-food-statistics-2011-12.pdf

Woolworths damage control in over drive

To much fanfare Woolworths announced this week it is trialling a scheme of direct price negotiations with a group of farmers in the Manning Valley, on the New South Wales mid-north coast, who will sell milk directly to the supermarket giant under the Farmers’ Own label.

It’s front page news everywhere. One might ask why, after all lettuce growers and onion growers and egg producers have been getting together for years and dealing directly with Woolworths. All  farmers who want to direct supply supermarkets have to do is find their point of difference whatever that maybe, pitch it to the supermarket and if they like it you then sit down at the table and iron out the finer points ( I understand it has taken the Manning River farmers 14 months to get this far). Then when everyone is happy you sign on the dotted line for hopefully a genuine and sustainable outcome for the farmers that gives them a price improvement or security or in the ideal world both. Sadly ABC National and Background Briefing’s Hagar Cohen chillingly showed some of these contracts can be a death knell for farmers who direct supply.

So if this new way of doing business with some farmers is not out of the norm why is Woolworths making such a big fuss and why is the media so interested? I think ACCC Chairman Rob Sims summed it up quite rightly as a massive PR exercise. The Australian public (and Woolworths shoppers) do love their farmers and they expect the supermarkets to do the right thing by them   

“The fact that Woolworths might be reacting to public opinion, I think that’s what large companies do all the time. They need to be aware of their role in society and act accordingly.”

Most importantly this is not the panacea nor even a lifeline for crisis the NSW and Queensland dairy industries are in

Best summed up by Dairy Connect’s  Mike Logan .

”I don’t think it is a solution for the issues in NSW, I don’t think a small group of farmers doing a farmer direct deal is a solution.”

As per his comments in The Weekly Times Mr Logan said supermarkets have gone from farmer customer, to competitor to supplier in recent years. Under this supermarket model, with contracted processing,  he was concerned which player would take the risk manager role– normally designated to the milk processor. Risk is essential for managing oversupply or under-supply of milk, a natural disaster, price spike or price fall, Mr Logan said.

From my perspective we have a long way to go before we get balance and equity back into the Australian supply chain. Whilst all the power sits at the top with two supermarkets who control over 70% of the market and pay multi million dollar bonuses to  management to deliver  billion dollar profits you don’t have to be Einstein to see that in reality despite all the spin  neither their customers nor their farmer suppliers are at the top of their priority list.

And are they pulling the wool over their customers eyes? Not according to these comments in the Age via Milk Maid Marian.

I think Australian consumers are sending a very strong message to Woolies to deliver on the promise not just for this small group of dairy farmers but to deliver on the promise for all their suppliers.

History will tell    

milking-the-system1

NSW Milk Shortage How dire is it

This picture was recently sent to me by an alert consumer

Woolworths  Home brand milk

It is a sign proudly advertising Woolworths home brand milk as permeate free (how predicable was that) Two other things caught my eye. Firstly it warmed the cockles of my heart to see the farmer brands at shoulder height. For those of you who don’t have years and years of retail marketing behind you shoulder height product placement is prized shelf space. It means the customer doesn’t  have to reach or bend and it gives your product the highest probability for customer selection 

The other thing that caught my eye was “Made from NSW Milk”. Now I for one am very happy that Woolies is spruiking this as a lot of my milk goes into their home brand milk.. It also goes into both the farmer brands Pura and Dairy Farmers ( which you can also see in the photo at shoulder height).

What I do know is milk is being trucked into the Lion factory en mass from Victoria. I don’t know what is happening at the Parmalat factory but I imagine this heatwave and resultant milk from NSW farms plummeting further is also putting them under pressure to outsource milk from Victoria.

The Victorian farmers aren’t happy either See Farmers protest at Warrnambool and a recent Weekly Times poll saying 75% of farmers think the Australian dairy industry is in crisis 

I wonder if Woolies and Coles know how dire the milk shortage is and how much longer can Woolies proudly claim their milk is sourced solely from NSW farms. If NSW farmers and processors continue to be put under huge pressure from the supermarket price wars and now drought will we see an Australia wide milk shortage? Glad I have house cow I am not keen on buying milk imported from China.  Are you?

BTW Interesting article from Sydney Morning Herald this morning Risk of crying over spilt milk as brands drop off shelves – Read more: http://www.smh.com.au/business/risk-of-crying-over-spilt-milk-as-brands-drop-off-shelves-20130118-2cyq0.html#ixzz2IO5UUy4V

First rule of negative social media Woolworths

Its interesting isn’t it? There is lots of wise advice out there about how to handle negative social media and one would think Australia’s biggest employer could afford access to the right expertise in this area?  Apparently not. Case in point my post yesterday on the fallout from Woolworths CEO Ralph Waters insensitive comments about Queensland dairy farmers  See here.

Now I am confident there is not one person out there me included who hasn’t said something or done something they later regret especially when it affects innocent people en mass. A recent and horrifying example of this is the death of the nurse involved in the Prince Edward Hospital debacle kick-started by a prank by a Sydney Radio station

Now one-one is suggesting Ralph Waters comments fall into this category but they definitely were insensitive and unnecessary and kicking farmers in the guts who are doing it tough through no fault of their own  and especially when it is a campaign heavily supported by Mr Waters company Woolworths that he is Chairman of the Board of  that is significantly adding to their pain

So Woolworths any Google search will elicit the first rule of negative social media

Be honest. If your brand makes a faux pas, apologize publicly to your fans. Ignoring the issue often makes it bigger, adding fuel to the fire”.

Ignoring the issue or hiding the  fallout in this case see here has launched a campaign that is the brainchild of one very passionate young dairy farmer and super AGvocate Stephanie Tarlinton @duofreefriday and @proudlydairy

Stephanie is a young lady people listen too and I would not be the least bit surprised if Duopoly Free Friday doesn’t build to a point where it does impact on Woolworths sales on Fridays such is the innovative thinking behind the idea and the passion, genius and support networks of the founder

Hello world meet Stephanie Tarlinton

Steph and her parents

Stephanie with her #soproud parents at the recent Dairy Research Foundation Symposium where the audience voted her their favourite speaker.

This what Stephanie had to say at the symposium that reduced many in the audience to tears

 

Slide1

Today I’d like to have a conversation with you,

But firstly so you know who you’re talking to, I’ll tell you a little about myself

I am

  • Firstly a proud dairy farmers daughter
  • The 2011 Land Sydney Royal Showgirl Runner Up
  • An Art4Agriculture Young Farming Champion
  • A National Junior Dairy Judging Final winner
  • A Woolworths Agricultural Business Scholar
  • A Royal Agricultural Society of NSW Rural Achiever
  • A NSW Holstein Youth Exchange Awardee

And a young women who has a degree in Agricultural Business Management, loves to travel and feels just as comfortable in a pair of high heels as I do in my gumboots

My story started growing up on my family’s dairy farm which is located on the far south coast of NSW just outside of the township, Cobargo. My family has a long association with the region and in particular the dairy industry.

I have the deepest respect for the humble dairy cow which has provided for my family and wider community over the last 148 years we have been dairying.

So you ask with five generations of dairy farmers behind me what is it exactly that I am going to talk to you about.

No it’s not the quickest way to move a strip graze fence nor is it the best way to dry out the inside of your gumboot when you misjudge the depth of the creek (however Mum’s good hair dryer can perform this task if she isn’t home)

Slide2

In fact the reason I am here today is to share my experiences of having conversations of change;

Conversations that inspire & engage.

Conversations which have the ability to empower another individual by sharing knowledge and experience.

Such conversations we all have the capacity to have as a way of connecting with those in the community who have not experienced a business/way of life, which is common to us all in room, dairying.

I’m referring to what is more commonly known as a way to help bridge the rural – urban divide.

The Bridge has been built however we need to open the pathway for consumers on either side to be able to connect with those involved in producing our food and fibre products.

With a considerable amount of Australia’s population living in urban centres, those classified as rural including the country’s farmers have an important role to play in reducing the separation between communities.

Engaging in a conversation with someone who has little knowledge of how their food moves from the farm gate to their plate has the potential to give them insights into the real story of modern agriculture.

Connecting with consumers on shared values increases the possibility of forming trust in farming and those whom participate in agricultural business.

Sharing personal stories allows consumers to gain insight and confidence in farming systems, ultimately building connections and breaking down barriers in society which further decreases the divide.

Members from either side of the divide consume food in order to survive and this is a fundamental feature of unity and mutual dependency. A simple discussion on the origin of a food product has the potential for rural person A to connect with urban person B to produce an outcome of greater understanding C.

A + B = C highlights the impact a single conversation can have if society will allow itself the simple pleasure to connect and challenge perceptions.

To quote Ghandi, “be the change you want to see in the world” reinforces the challenge that in order to create ways in which to build relations between the two sectors of society one must accept their role and be prepared to create opportunities for conversation.

For the agricultural sector to develop positive images and perceptions of farming practices and lifestyle, individuals who align themselves with this segment must be prepared to participate in the dialogue.

This is something that after hearing on numerous occasions the comment “oh you don’t look like a farm girl” I regularly seek out opportunities to participate in the dialogue others may see as a waste of time. As the quote behind me states I am the being the change I would like to see and that is having a greater number of consumers with an understanding of just who is putting the milk in their latte and the process it took to get it from the cow to the city cafe.

Slide3

One opportunity I recently had which allowed me to participate in conversations with next generation of consumers was through the Art4Agriculture Archibull Prize program as a Young Farming Champion. In September last year I made my way to a primary and then to a secondary school in Sydney which saw me become their face of farming.

A face which they were not expecting which was clearly indicated to me “oh so YOUR the farmer” with an intrigued look up and down at my business suit and heels, with a laptop and mobile phone in hand.

I see dairy farmers as business people who work in the food supply sector and although we spend time in gumboots they are what I call “tools of the trade” much like my heels I guess!

I took this role on as it allowed me to challenge the stereotype of farmers which is so often poorly portrayed in the media, and provided me with an opportunity to share my experience of growing up on the dairy with children who do not have such a luxury and to share the great story that is dairy.

I would now like to share with you one tool I used which has allowed me to engage in conversations;

This is a conversation I have not only shared with you here today and at my schools last year but it has also been shared with the rest of the world via YouTube, In fact my video has been viewed by over 2500 hundred people, an audience I would have not been able to reach with my messages if it had not been for my desire to connect with others in the community who have been labelled on the urban side of the divide.

I believe that challenging stereotypes through highlighting our connections has the ability to show that as people we both have a mutual dependency on food and therefore on one another as a producer and a consumer

I am proud to come from a dairy farm, to be a small town girl, a rural consumer and I see this as one of my greatest assets, I have firsthand knowledge and experiences of food production and therefore I have something to share through conversation with those whom are classed as being from the bright lights of the city.

Slide5

One girl who calls the bright lights of Sydney home is Year 7 student Sophia, standing second from the left in this photograph. I would now like to take a moment to read you an email I received from this young girl after being to her school

Dear Stephanie,

My name is Sophia and I met you when you visited our school. I am writing to you to tell you how inspiring and amazing your visit was.

My sister Olivia and I both attended your visit and it truly was a life changing experience. As we both live in a very suburban area we don’t get to see a lot of Australian Farmers. What was so incredible about your visit was that you taught our school that farmers are real people too. Your visit and video showed us just how important Australian Farmers are and just how much farmers are like us.

So I am writing to say Thank you. My family and I are originally from NZ however we moved here 5 years ago. I feel like I now understand that the foundation of Australia is made up of Farmers. You have really changed the way I think about farmers and I will now make it my mission to help spread the word, “Farmers are real people too” oh and that “farm girls love their shoes”

Regards Sophia

After reading this email I was touched at how my simple video which showed nothing more than my life on the farm, our girls aka the cows, a few pairs of shoes and some creative dance moves had the ability to inspire a young woman. I was touched at the response I received as for me I was just having a conversation about the everyday things that form life on our farm however for this particular girl my ordinary wasn’t so ordinary.

Slide6

I chose to share Sophia’s story with you as I believe it is an example of how it only takes a small conversation or connection to create big outcomes. For me knowing I had planted a seed in one person’s mind regarding the way she thought about farmers provided me with the greatest sense of satisfaction and determination to then tell others about my story and encourage them to tell theirs.

In my dealings with people in the agriculture sector I have often found farmers to be very humble people, my parents are a great example of this, however I challenge you all to be inspired by the words of William James –

“Act as if what you do makes a difference. It does”

I believe as dairy farmers we make a difference, everyday. Everyday there is fresh, safe healthy dairy products available to consumers which have all originated from the only true white gold, milk. It does make a difference to people’s lives that is because the nation’s dairy farmers got out of bed this morning that have food on their table, jobs to go to, communities to live in, someone to call a neighbour, a friend.

I am confident there are many other ways which you all make a positive difference to someone’s life simply due to your actions as a dairy Farmer.

As farmers if we would like others in the community to acknowledge this difference we make to their lives we must be prepared to share with them, to build trust by finding common values and to firstly acknowledge and be proud of the role we play.

I see no easier way to do this then by having a chat with someone. Whether its a taxi driver, the person next to you on the plane, the person at the supermarket checkout, your hairdresser, or your child’s teacher. Share with them your story, challenge the stereotype, leave them with notion that today they met someone who is PROUD to be a dairy farmer or working in the dairy industry.

Conversations provide a key to reducing the disconnect between the farmers who grow the food and the people who buy and consume it. By acquiring education from individuals like ourselves who have firsthand knowledge in agricultural fields, it will enable those divided by urban boundaries to have informed opinions and increased understandings of what it is exactly that you do.

Actively participating in the conversations is essential for progress to be made in reducing the disparity of knowledge because if we don’t take the initiative to stand up and tell our own story someone else will. And I personally know I’d rather tell my side of the story then have someone with extreme views or uninformed opinions reaching the consumer of a product I’m proud to say I produce.

Slide7

So I would now like to ask those in the audience who are proud to dairy to raise your hand…

Congratulations! I too, am proud to dairy, proud to be a part of a great industry and proud to have such a long family history associated with dairying.

I would now like to ask you all to have a conversation of change, to share your experience and wisdom

And remember every individual has the power to share knowledge regardless of which side of the classroom divide, they take a seat during story telling.

So I challenge you all to be the change we need to see to bridge the divide,

To seek opportunity to engage and educate,

Act as if what you do makes a difference as it does to the consumers of Australia

And finally

Be proud to Dairy, Always.

So in 140 characters “Stephanie stepped out in her black business shoes and her pink lipstick and wowed them with her #proud2dairy message” and she bought many in the audience to tears including me.

Farm Girls Wear Shoes too

Those shoes

This wont be the last time you will hear from Stephanie Tarlinton.

Disappointed Woolworths

Even as a kid I was pretty vocal and I always remember this little saying my dad would flick my way from time to time “ if you cant say something nice don’t say anything”

Well, it well and truly appears Woolworths Chairman Ralph Waters needs to have a conversation with my dad. 

Mr Waters has copped the wrath of dairy farmers, their supporters and the wider community who despise “big business” tramping on the small business when he apparently made the suggestion that Queensland dairy farmers should “get out and do something else”, or be “weeded out” as impractical

You can read the story in Australian Dairy Farmer Magazine here

Now when one makes comments like this, one would expect if you are a caring, sharing person that you would upset a few people and that these people would get quite vocal and these people have taken to social media to tell Mr Waters exactly how they feel

Comments like this on the Woolworths Facebook site.

Lisa Claessen

You can like this post or make a comment here https://www.facebook.com/woolworths/posts/420710038001133

and this

Steph Tarlinton

You can support Stephanie’s comments here

https://www.facebook.com/woolworths/posts/420703384668465

What is disappointing is Woolworths have removed these comments from public view. Picked up by the ever vigilant Kylie Stretton of Ask an Aussie Farmer fame See here

Kylie Stretton

You can comment on Kylie’s post here 

https://www.facebook.com/woolworths/posts/421133374625466

Now hiding is not a smart strategy Woolworths because articulate, well educated, passionate people will find other ways to air their views and this is exactly what is happening

Woolworths have not ventured into the twittersphere space yet but everyone else who wants to get their message out has

Twitter is now abuzz with @Duofreefriday which is the Twitter handle of Duopoly Free Friday campaign and they wont be able to hide this from public view. 30 followers in 10 minutes and climbing  

Duopoly Free Friday 

Own up Mr Waters you made some comments that you must have known would be red rag to a bull. Wear the consequences. Hiding from them will only do the Woolworths brand more damage.

Duopoly Free Friday tweets

Twitter reveals all

Coles and Woolies take pot shots at each other but its their customers and farmers who are being critically wounded

 

The words “loss leader” sends shivers up my spin. Why? Because Coles is using milk as a loss leader. This marketing strategy is lining their pockets with gold and it is crippling Australian dairy faming families See previous post “ Wake up Coles please don’t put your profits before Australian farming families”

So what is a “loss leader”. Our friend DR Google and Wiki (1) do a nice job of explaining it  

A loss leader, is a product sold at a low price, at or below its market cost[ to stimulate other sales of more profitable goods or services.

The Strategy

One use of a loss leader is to draw customers into a store where they are likely to buy other goods. The vendor expects that the typical customer will purchase other items at the same time as the loss leader and that the profit made on these items will be such that an overall profit is generated for the supermarket .

“Loss leading” describes the concept that an item is offered for sale at a reduced price and is intended to “lead” to the subsequent sale of other items, the sales of which will be made in greater numbers, or greater profits, or both.

Now the concern for supermarkets using this strategy is deep price promotions may cause people to bulk-buy (stockpile), which they obviously don’t want .

Characteristics of loss leaders

  1. A loss leader may be placed in an inconvenient part of the store, so that purchasers must walk past other goods which have higher profit margins.
  2. A loss leader is usually a product that customers purchase frequently—thus they are aware that its unusually low price is a bargain.
  3. Inexpensive products like milk, eggs, bread and other low cost items that supermarkets would not want to sell without other purchases.
  4. Some loss leader items are perishable and cannot be stockpiled.(1)

So as you can see milk is the perfect loss leader, kept at the very back of the store, purchased everyday and its perishable ( no stockpiling milk)

Don’t be fooled Coles customers Coles are not doing you an favours by selling you milk at a $1/litre. The billion dollar profits tell the real story  

supermarket_cartoon

Thank you to this great article from Punch for the inspiration for my heading