Steve Anderson Building on the Kiwi success story

Steve Anderson is proud to be part of the genuine Kiwi success story. Sharon Tian catches up with the managing director of Foodstuffs New Zealand and learns about a different way to lead.  

You were trained as a geologist and started your professional career with an oil company. How did you transition into a leadership role in New Zealand’s largest food retail group? 

Steve Anderson: I have gone from rocks to fuel to food – not your traditional route to being a CEO. The scientific background means I think a bit differently to my colleagues, which can be a good thing but also a challenge. For example, I am not really a big fan of balancing spreadsheets, so having a first class CFO is crucial.

After a stint at Shell, I wanted to diversify and I applied to work at Mainland Products. Irecognised that the food industry was going to be critical to New Zealand’s global future and I wanted to be a part of that. Global food challenges such as food traceability, food safety and sustainability are key issues in our industry and to be honest, a geologist’s understanding of the key components that constitute the Earth as well as the processes and the history that has shaped it has put me in good stead for understanding these types of issues.

I had experience of the Foodstuffs cooperative as a supplier while I was with Mainland Products, and was genuinely impressed by its values and I really wanted to be part of that.

The mission of Foodstuffs South Island Limited (FSSI) is to feed the South Island population – everything we do needs to be focused on doing that as effectively and efficiently as possible.

This is how I see my role. If the company was a band, I would be the bass player. I set the beat and the lead guitarist and vocalist would do all the specialist roles. Without the beat, they would not be as effective. 

Tell us about the true Kiwi success story at Foodstuffs.

Anderson: Foodstuffs is a New Zealand business story that started in the 1920s and grew to become New Zealand’s second biggest organisation, after Fonterra. We have more than 50% of the country’s supermarket share.

It all started in the early part of the century after the First World War with a company that was born in adversity and developed out of desperation, one which would develop a tradition of service to be proud of.

Along the way, a progressive group of independent grocers decided to pool their resources to achieve more competitive buying arrangements. It had also become clear to the group that to achieve real success, it needed to establish a company which could be recognised by the manufacturers as a wholesaler. Thus, United Buyers Limited came into being in December 1929. In May 1935, United Buyers Limited became Foodstuffs (Wellington) Limited and Amalgamated Buyers Limited would adopt the title Foodstuffs (Christchurch) Limited, giving the group an established nationwide presence.

From these humble beginnings, the brand Four Square was born. Currently, there are 273 Four Square stores to be found nationwide along with 50 PAK’nSAVE’s, 137 New World’s and many other brands including Raeward Fresh, On the Spot, Henry’s Wines & Spirits,  and wholesale stores such as Gilmours, Toops and Trents.

Nationally, Foodstuffs and its brands employ about 30,000 employees across our support centres, distribution centres and supermarkets, making us one of the largest employers in the country.

Foodstuffs South Island Limited (FSSI) is a South Island, 100% New Zealand-owned cooperative, formed in 1988. FSSI has sister co-operative, Foodstuffs North Island Limited (FSNI) which was formed in September last year from the merger of Foodstuffs (Auckland) Limited and Foodstuffs (Wellington) Co-operative Society Limited.

Foodstuffs prides itself on being 100% local and having a thorough understanding of the needs of the local communities that it serves.

What is the next stage of growth and business development for Foodstuffs?
Anderson:Keep doing what we’re doing but do it even better! The consumer is key, we must listen to their needs and wants and adapt to ensure we meet their expectations.

The rise of the individual consumer is a main area of focus. Five years ago, we did not have the systems available to measure an individual customer’s needs and wants, we simply had to market to the collective. This has changed with the evolution of customer relationship management tools such as New World Clubcard.

Combine this with the efficiency of media we now have and the business can now communicate directly to the individual. Consumers have an immense amount of power because of this. Not only can they tell us what they want, they can also tell all their friends via Twitter, Facebook and YouTube, for example. The opportunities for brand exposure – and damage – have increased exponentially.Maximising this opportunity and managing this risk has to be a key focus for any retailer to achieve long-term success.

In your view, what is important for retailing success in New Zealand? 

Anderson: Understanding the consumer and listening to their needs and wants.

There are a number of areas that I consider to be critical to our success as a food retailer and those we have executed well.

One is service excellence. At New World, we do not think that we should be afraid to show our passion for food and service and the brand is committed to going the extra mile for our customers. We have expert knowledge in-store, from our butchers to the staff who work in our wine areas – some of whom also help to judge the New World Wine Awards. Our Bakery, Deli and Fresh areas are also served by staff who are passionate and knowledgeable about their products. New World’s helpful staff are part of the core reason why people shop with us instead of our competition.

Another is supply chain excellence. We know consumers want more fresh produce. It has become ‘cool’ to cook, and customers recognise eating fresh is good for their health. Across our supply chain, we are continually striving to achieve excellence and we are particularly proud of our seafood and butchery offer.

In the North Island, 80% of our fish is caught from trawlers contracted through key partners that supply directly to Foodstuffs North Island, with the remaining 20% sourced from fish markets or other sources. In the South Island, we have a slightly different set up. Foodstuffs South Island has long standing relationships with independent seafood suppliers who provide the required product to stores in response to supply and demand. Because of these supply chain models, we are able to provide the freshest product possible to our customers at the most competitive prices.
Equally, we take our meat very seriously. All of our stores pride themselves on being competitively priced in their butcheries. What sets New World and PAK’nSAVE stores apart from our competition is the fact that we have qualified, and in many cases award-winning, butchers in-store. This enables us to bring in premium quality meat and process it daily at almost every store, ensuring its freshness for our customers. In this way, we are similar to the traditional butcher’s shops.

Customers can come into our stores and speak directly to our expert butchers and get the exact cut of meat they desire rather than be restricted to meat that has been processed and packaged off site. This in-store expertise also means we have a much wider range of meat cuts available to our customers compared to our competition. In essence our customers know that no matter what they require, New World and PAK’nSAVE butchers can assist them.

We have also executed very well on branding and marketing. Two examples of this are the New World Clubcard and New World’s Little Shop.

The launch of New World Clubcard in the South Island at the end of July 2014 has been a huge success hitting targets we did not believe we would achieve this early in the launch. Already, the total number of active Clubcard customers stands at well over 200,000 with around 50% signing up to receive New World emails. These figures are well above the industry standard.

Stores are really excited as the New World Clubcard allows them to take ownership of the programme by connecting better with their customers and fine tuning the grocery offer to meet their specific needs. Ultimately we hope to be able to communicate on a one-to-one basis with our customers and Clubcard is a great vehicle to do this. Our supplier network is thrilled that we have launched this new customer relationship tool as it allows them to market their products more effectively and achieve greater business success.

New World’s 2013 Little Shop was without doubt our most successful marketing campaign. The hugely popular collectible craze swept the country, and inspired kids, parents and grandparents to trade and swap their way to a full set of collectible items. This year, the programme returned, bigger and better than ever. We have 50 brand new mini collectibles in the set and it includes limited edition bonus mini collectibles, as well as new accessories. There are also chances to win Little Shop electric ride-on trucks, one per-store, as well as two fully operational Sealord little boats and much more.

We knew Little Shop was going to be a hit last year but we did not anticipate the degree of popularity. All the accessories sold out across the country in record time and desperate parents started calling the stores trying to swap collectibles, which inspired many stores to set up trading days in store for customers. So, this year we have introduced a New World Little Shop Swap Facebook App that allows customers to track their collection and swap and trade their mini collectibles without having to pay the trading prices that started to appear on many websites last year.

What about the competition, especially from international retailers?

Anderson: We have an international retailer as a competitor and we are constantly aware others could come into the market. We are ready for them. It is worth noting that at the end of the day, competition is good for the consumer.

How does FSSI serve the local community?

Anderson: Foodstuffs South Island Ltd has been serving the local community through its Food for Thought Education Trust since 2006. The programme is all about helping students make healthy food choices. It is educational, fun and delivers the learning both inside and outside the classroom. The programme teaches students lifelong skills though classroom sessions with nutritionists before taking them out to our supermarkets and helping them to plan, design and budget a healthy lunch for their class – sponsored by their local New World, PAK’nSAVE or Four Square. In the last year Food for Thought nutritionists delivered the programme to 181 schools, 602 classes, 15,638 students and 1,088 parents who were volunteer helpers.

Sponsorship is something we feel all good corporate citizens should participate in, and I can confirm that giving back to the communities in which we operate is something that I, the wider management team and our owners are very passionate about. Foodstuffs supports a number of charities and sports groups and various fundraising initiatives.

What are the new trends in food and supermarket retailing? How does FSSI keep up with the new trends and demands?

Anderson: We know consumers want more fresh produce, good quality meat and fresh affordable seafood. It has become ‘cool’ to cook, and customers recognise eating fresh is good for health. This trend is here to stay and we are thrilled about that. The rise of the individual consumer is also a key trend, as mentioned earlier.

What keeps you awake at night?

Anderson: Earthquakes – the September 2010 and February 2011 earthquakes were huge challenges for our business.

Without a doubt, the business’ response to the two earthquakes makes me very proud to be part of such a strong, competent team who in a major crisis has proved that they can keep a cool head and get the business up and running quickly and without drama.

Following the September 2010 earthquake we were faced with 20 stores that were either closed for a few hours or for a few days depending on the level of damage and one had to be rebuilt.

Another major challenge to the business post-quake was that the Hornby Distribution Centre (DC) was forced to close when the racking collapsed with 5,300 tonnes of product destroyed and our Papanui DC only had limited distribution. Fortunately the team from our Dunedin DC were able to step in to bridge the gap along with our North Island sister companies which assisted with the supply of our private label products in particular.

If we thought the September quake was bad, the February 2011 earthquake turned out to be a major blow for Cantabrians as it was centred much closer to Christchurch. The resulting loss of life was truly devastating and the community had to struggle to deal with their grief and confront the challenge of badly damaged buildings and businesses. But once more Cantabrians, and indeed the country, engaged that ‘can-do Kiwi spirit’ and pulled together to get the clean-up under way.

Yet again, the Foodstuffs South Island team remained focused on our core mission – to feed the South Island. Despite 17 stores being affected this time, three stores destroyed and the DCs taking a hit, the team was focused on making sure our supermarket doors remained open, food was on the shelves and customers had everything they needed.
Considering the fact that many staff had been personally affected by the earthquakes, the teams’ willingness to put their jobs at the forefront and endeavour to ensure the wider community was served was truly impressive. I am personally very grateful for their attitude.

Role as CEO at FSSI

“If the company was a band I would be the bass player. I set the beat and the lead guitarist and the vocalist do all the specialist roles; without the beat they wouldn’t be as effective.”  

BIOGRAPHY 

 STEVE ANDERSON, 54

Managing Director of Foodstuffs (NZ) Ltd and CEO of Foodstuffs South Island Ltd

Academic & professional qualifications:

Graduated with a BSc (Honours) in Geology and an MBA from the University of Otago

Career Highlights:

2010-Present: Managing Director of Foodstuffs (NZ) Ltd

2000-Present: Chief Executive Officer of Foodstuffs South Island Ltd

1994-2000: General Manager of Sales for Mainland Products

1989-1994: Shell International Business Analyst