Chris Baddock talks acquisitions, private label and COVID-19
Earlier this week, TheShout reported on Metcash’s full year results, which highlighted that the liquor division had delivered its seventh consecutive year of growth.
It was also subsequently announced that Metcash has acquired the private label brand portfolio from Kollaras & Co, which is a key accelerator of Australian Liquor Marketer’s (ALM) private label growth strategy and a key focus for CEO Chris Baddock.
National Liquor News caught up with Baddock to talk about his plans for private label and the highlights of another successful year.
“We’ve been working with Kollaras for five years and when I came on board I started to talk to them about how we could get closer to the brands,” Baddock told National Liquor News.
“It was it was a mutual agreement in that as an organisation who does private label, it’s probably better to be closer to the consumer and the retailer than to have another party in there. And so therefore, us acquiring the brands helps us make sure that we can deliver the better quality that private label should have.
“The attributes of private label are great quality, great price and good margin. And I certainly believe in that. I believe that retailers can use private label to attract consumers through loyalty because the brands are exclusive. So to take one mouth out of that scenario certainly helps us do that work.”
ALM will now conduct an extensive category review to find where there may be any gaps to fill within the portfolio.
“The plan will be, as we’re trying to do across our whole business, is fewer, bigger, better. And that doesn’t mean that we’re going to get rid of any of those brands, what it will mean is that we want those brands to work harder. If we think there are gaps and we need to introduce new brands, be they exclusive or owned, we will do that. And I think it’s important to call out the exclusive part because we certainly want to work very closely with suppliers.”
New Zealand expansion
ALM’s New Zealand counterpart, Tasman & Allied Liquor, also had some exciting news this week with the announcement of Metcash’s acquisition of the Liquor Centre banner group.
Tasman & Allied Liquor is a NZ wholesale business that supplies bottle shops and the on-premise, much like ALM in Australia. It also has a banner group called Bottle’O which has around 110 stores, of which Baddock says: “I’ve got biased but I certainly think they’re one of the better bottle shops in the New Zealand market.”
Tasman & Allied Liquor has been supplying Liquor Centre and through that relationship it ultimately led to discussions to acquire the banner group.
“We still have a supply agreement, of course, because now we own it. But now we manage the end to end banner. So the marketing and the promotional program like any banner would in Australia. There are 240 outlets in total. All independent. 170 of those are Liquor Centre, 40 are Liquor Spot, and then you’ve got the remainder, which are unbannered.”
Coming through COVID
Baddock explains that one of the greatest highlights for him in this financial year is in the way the business has handled itself during this time of crisis.
“The highlight for me is the way that the team rallied in a time of crisis particularly for the customer.
“You can talk about your purpose of championing successful independents and partnership, but when things get tough, you really know what your culture and your purpose is and the way we helped the on-premise I’m quite proud of.
“Also, the way we’ve worked with our suppliers to ensure that we maintained a solid promotional program during the height of the crisis. And there’s no way the crisis is over, there’s certainly talk of new waves so it’s a watching brief. But we’ve made sure that we, particularly in times where consumers are concerned about the economy, the flight back to everyday in value, we continue to promote, we continue to deliver value to the consumer, where it would have been very easy to pull back.”
Baddock also mentions that the wider Metcash business will continue to evaluate new opportunities as they arise, but says that at the moment it’s all about: “betting in private label and betting in Liquor Centre, and also really doubling down on our core business, including bringing our brands to life through some new marketing campaigns. If COVID has taught us anything, it’s about focus, focus, focus.