Entering the New Zealand Market: Considerations for Grocery Brands
Written by: Will Gordon, Commercial Director at Incite
New Zealand’s grocery market is a duopoly dominated by two influential retail groups. This concentration creates both challenges and opportunities for brands aiming to enter the market. With specific regulatory frameworks and logistical considerations, understanding the nuances of this sector is crucial for success. Aspiring entrants must be prepared to navigate the competitive dynamics and establish strong relationships to effectively position their brands and products across two major channels:
Foodstuffs: A cooperative structure with regional divisions (North Island and South Island), Foodstuffs operates well-known grocery brands including New World, Pak’nSave and Four Square. The retailer has a combined distribution footprint of +/- 500 stores across the country under its various banners.
Woolworths New Zealand: Owned by Australia's Woolworths Group, this major player is known for its strong focus on sustainability and convenience. Woolworths operates 185 stores throughout New Zealand.
How can brands enter the New Zealand market?
Brands looking to enter the market will face similar challenges to those they will face in Australia. Unlike in grocery channels across Southeast and North Asian markets, the two main retailers in New Zealand operate annual range review windows. This provides a 'once a year' opportunity to gain (or maintain) a listing. Historically, Foodstuffs has offered the option to sell directly to stores within their cooperative (vs. through a distribution centre) to enable a brand to prove sell-through and attractiveness. However, this model is currently being phased out as the retailer moves to a centralised buying structure more closely aligned with Woolworths.
Category Managers are bombarded regularly with new brand and product listing opportunities. For imported brands, there are a range of distributor options in New Zealand and often, the account management team will hold strong relationships with Category Managers that can unlock doors to initiating discussions.
Three things to watch out for:
Food Safety Regulations: New Zealand has some of the strictest food safety regulations internationally. Brands must meet regulations set by the Ministry for Primary Industries (MPI), including labelling, ingredient transparency and health claims.
Biosecurity Measures: New Zealand takes biosecurity seriously, so all imported products must adhere to strict import protocols to avoid risks to agriculture and the environment.
Logistics: Do not underestimate New Zealand's remote location. An experienced importer and distributor is needed to guarantee smooth product flow, both into the market and onwards to distribution centres across the country.