Woolworths finds success at Naturally Good Expo

Woolworths found success at the Naturally Good Expo a the ICC in Sydney on May 31, with the ‘Meet the Buyer’ event hosted by the Food & Agribusiness Growth Centre (trading as FIAL). The event consisted of an industry briefing on Woolworths’ health food strategy and on how to become a supplier to Woolworths.

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Woolworths start work on $184m DC

Woolworths Group’s supply chain arm – Primary Connect – has commenced building works on its new Heathwood Distribution Centre (DC) in southeast Queensland. The 42,000 sqm temperature controlled facility – equivalent to more than three times the size of the Suncorp Stadium playing field – will enable fresher, faster and more efficient deliveries of around 4,000 frozen and chilled products to more than 260 stores across Queensland and northern New South Wales.
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US FDA briefs Asia Pacific on Smarter Food Safety

At a recent global briefing, Frank Yiannas, the US Food and Drug Administration’s deputy commissioner for Food Policy and Response, addressed more than 200 attendees from 33 countries on the importance of traceability and transparency in food systems.

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Woolworths to remove product limits across South Australia

Woolworths will remove product limits across all categories in South Australia from tomorrow (Saturday 21 November, 2020) as demand moderates across the state.
Woolworths Supermarkets South Australia General Manager, Karl Weber said: “We’ve seen demand moderate across South Australia and we thank our customers for that.
“Our team members and supplier partners will continue working around the clock to restock our stores, so we ask our South Australian customers to continue buying only what they need.
“We’ll continue to monitor the situation closely and reinstate product limits if we see further demand spikes.”
The changes to trading hours announced recently will remain in place until Monday 30 November 2020. The hours are as follows:

  • Saturday 21 November: 7am to 8pm
  • Sunday 22 November: 9am to 8pm
  • Monday-Friday: 7am to 9pm

Trading hours will return to normal from Monday 30 November 2020 onwards.
Mr Weber concluded: “We thank our customers for their patience and understanding as we work through this unsettling time together.”

Woolworths appoint chief risk officer

To reflect the increasing importance of risk governance and management across Woolworths Group, a chief risk officer role has been created reporting to the Group CEO. David Walker, currently Managing Director, BIG W has been appointed to this role. Walker will have leadership of Woolworths Group’s critical Line Two risk and compliance functions within its Three Lines of accountability framework. This includes primary responsibility for the Group’s risk and compliance strategy, the evolution of risk management frameworks and oversight of risk across the Group.
“There are an ever increasing number of influences changing the way that we work and the role that we play in the communities in which we operate, Woolworths Group CEO,” Brad Banducci said. “Whilst this creates many new exciting opportunities for us, it also increases the importance of good risk management. To best reflect these needs, we have created a new Chief Risk Officer role within the Woolworths Group senior leadership team.
“I am pleased that someone of David’s calibre will be stepping into this new role. For the last four years, David and his leadership team have led the successful turnaround of BIG W by building a strong purpose-led culture that has culminated in the business’s return to profitability this year.
“David’s Customer 1st Team 1st mindset, his knowledge and experience leading our various businesses and operations and his background in finance and audit give him the ideal skills to step into this important new role for the Group.”
To replace Walker, Pejman Okhovat will join Woolworths Group as managing director, BIG W to continue the BIG W transformation journey together with the BIG W leadership team. Pejman joins from New Zealand where he was chief operating officer, The Warehouse Group with an extensive background in non-food retail both in New Zealand and the UK.
Okhovat will join BIG W in Q4 F21 and report to Claire Peters in her new Group role as managing director, B2B and Everyday Needs. In the interim, Teresa Rendo, who is currently general manager of Commercial at BIG W and has played a fundamental role in BIG W’s turnaround journey, will step in as acting managing director of BIG W.

Woolworths shakes up leadership team

Claire Peters, currently managing director of Woolworths Supermarkets, will take up a new position as managing director of B2B and Everyday Needs. In this role, Peters will take leadership of Woolworths Group’s portfolio businesses including BIG W, Woolworths International, Wholesale and Property. She will also take stewardship of the Group’s new partnership with PFD Food Services and join the Investment Committee of venture capital arm, W23.

“Claire has successfully led the ongoing transformation of Woolworths Supermarkets over the last three years,” said Woolworths Group CEO Brad Banducci.

“During her leadership we have seen significant increases in customer and brand metrics, implemented a new store operating model to better serve changing customer needs, implemented the foundation phases of Fresh Made Easy, evolved our store formats and materially improved supplier engagement. In more recent times, Claire has played a critical role in helping the Group navigate through COVID.

“In her new role, Claire will combine her detailed knowledge of the food and non-food retail environment to lead our important growth adjacencies. These areas of our business are critical to the next phase of our journey and we look forward to the opportunities that Claire and her team will unlock in her new leadership position.”

After two years as managing director of Woolworths New Zealand, Natalie Davis will return to Australia from October and assume the role of managing director of Woolworths Supermarkets.

Banducci said: “In the past two years, Natalie has led the growth of Woolworths New Zealand, worked to deliver improvements across customer, brand and reputation metrics and also rapidly grown Countdown X, especially in eCommerce. Natalie will work in partnership with the Food Leadership team to continue to transform our Australian Food Business.”

An announcement on the appointment of the new managing director of Woolworths New Zealand will be made in the coming weeks. In the interim, Sally Copland, general manager digital for Woolworths New Zealand will step into the role of acting managing director.

Managing director of Group Portfolio, Colin Storrie will take up a new role as managing director of New Business and Partnerships.

“Colin is, in many ways, the unsung hero of our senior leadership team, generally working behind the scenes on many strategic initiatives that have helped us build the business that we have today,” said Banducci.

Woolworths joins forces with health insurer

With Australians eating at home more and health top of mind in the pandemic, Woolworths Everyday Rewards and health fund Bupa are teaming up to reward customers for choosing fresh fruit and vegetables.

It comes as an Ipsos survey of 2,000 participants conducted for Woolworths in June found that eating more fresh fruit and vegetables was the number one food priority for Australians over the next year.

The partnership, which launched today, will give Bupa Health Insurance members access to exclusive bonus point offers when they link their Woolworths Everyday Rewards account to Bupa.

To help encourage healthier habits, Bupa customers can collect three points for every dollar spent on fresh fruit and vegetables and Macro Wholefood Market products for the first 60 days after linking their account. This recognises customers’ investment in their health and will help them enjoy discounts on future shops sooner or bank more points for Christmas.

Emily Amos, managing director of health insurance at Bupa said the partnership comes at a time where health – and household budgets – have never been more important.

“By giving members the chance to collect more points, they can earn savings towards a future shop faster. This initiative will reward our members for healthy choices and give them added value from their health insurance policy,” Amos said.

“Woolworths shares our passion for promoting healthy lifestyles and we hope as many members as possible take advantage of this offer by enjoying deliciously fresh and nutritious food options.”

In the months ahead eligible customers will also enjoy a Woolworths-first, with 20 times bonus points on cleaning products – our highest bonus points offer to date. Further partnership benefits later this year will include 10 times bonus points on a total shop plus special offers across the Woolworth Group.

Hannah Ross, Woolworths director of Everyday Rewards said the partnership is an important evolution of the supermarket’s broader strategy to support its customers’ health and wellbeing.

“We know our customers want to make healthier eating choices, and we’ve been working hard to make it easier and more affordable to do so,” Ms Ross said.

“This focus on wellbeing has only accelerated in the pandemic, with our customers telling us their number one food priority over the next 12 months is eating more fresh fruit and veggies.3

“We’re delighted to be teaming up with Bupa to support this positive intent with extra rewards on purchase that can help kickstart new habits.”

Woolworths takes majority stake in PFD Food Services

Woolworths has extend edits strategic partnership with PFD Food Services by acquiring a 65 per cent equity interest in the business. Woolworths Group will also acquire 100 per cent of PFD’s freehold properties, which primarily comprise 26 distribution centres.

“We are excited by the opportunity to invest alongside the Smith family in PFD Food Services. It is a business we have long admired and we have a shared vision for continued innovation, customer focus and investment in the food sector. We look forward to delivering even better experiences together for our customers as we continue to respond to their changing needs in a post COVID world,” said Woolworths Group CEO, Brad Banducci.

“This investment is a logical adjacency for Woolworths Group and further supports the evolution of the Group into a Food and Everyday Needs Ecosystem. It will build on our existing partnership with PFD, the number two player in the large and fragmented out-of-home foodservice and non-retail business-to-business markets.

“The investment will also unlock synergies for both businesses across the combined network and fleet. We will help to support PFD’s growth through access to our logistics, digital and data analytics and operational capabilities. For Woolworths Group, it will enhance store range localisation and provide fleet synergies through better route and capacity optimisation across our combined network.”

PFD will operate independently under CEO Kerry Smith. A separate board and governance structure will be implemented, with Rick Smith, the founder of PFD, continuing to be involved.

“We are pleased to deepen our existing strategic partnership with Woolworths Group for the longer-term via their investment in our business. As a family owned and operated business which prides itself on its customer and supplier relationships, it is important that PFD operates as a standalone business, run by the existing team. In Woolworths Group, we are confident we have found a partner with shared experience and expertise, but also whose operations and vision for the future complement our own,” said PFD Food Services CEO, Kerry Smith.

Transaction details

Woolworths Group will initially invest $302 million in PFD to acquire a 65 per cent equity interest. The transaction implies a multiple of 11x pre-AASB 16 EBITDA  of $57 million assuming net debt of $157 million1. Woolworths Group will also acquire PFD’s freehold distribution centre properties for $249 million which will be leased back to PFD.
Like many other businesses, PFD’s current earnings have been impacted by COVID-19. Despite this, the investment is expected to be earnings per share accretive in the first full year of ownership and deliver a strong return on investment to Woolworths Group.The transaction is subject to an earn-out at the end of F22 and F23 if earnings growth materially exceeds the business plan. Put and call options have also been granted to the Smith family and Woolworths Group respectively over the Smith family’s remaining 35% shareholding, exercisable from the third anniversary of completion.

The transaction is subject to ACCC approval and the satisfaction of customary closing conditions with completion expected by the end of calendar year 2020. The purchase price will be funded from existing cash reserves and available debt facilities and is not expected to affect the Woolworths Group’s existing credit metrics.

Seaweed to reduce cow methane

Australia’s national science agency, CSIRO has announced the formation of a new company to take a methane-busting seaweed to market, with $13 million secured from five investors.

FutureFeed Pty Ltd will commercialise a livestock feed additive made from the seaweed Asparagopsis, which has been shown to reduce methane emissions in beef and dairy cattle by more than 80 per cent in research trials in Australia and the USA.

AGP Sustainable Real Assets-Sparklabs Cultiv8 Joint Venture, GrainCorp, Harvest Road, Woolworths and CSIRO have committed to investing in the company.

Minister for Industry, Science and Technology Karen Andrews said it was great to see Australian companies getting behind an Aussie innovation with immense global potential.

“This is a game-changer – not only for livestock production, but also for our environment – with the potential to create an entirely new industry, while supporting jobs in the Australian agriculture sector,” Minister Andrews said.

“This is an example of what can be achieved when industry and researchers work together to solve real-world problems.

READ MORE: Supplying the next generation of manufacturing

“It also highlights the ongoing jobs and economic opportunities that can come from ensuring our world-leading research is commercialised.”

The newly established FutureFeed company will develop a full value chain for the livestock feed supplement, from seaweed cultivation and production through to processing and feed manufacture in order to supply beef and dairy industries globally.

The company expects to see commercial volumes of the feed additive supplied into the Australian beef and dairy market by mid-2021, with international markets to follow.

When Asparagopsis is fed as a supplement to cattle, it not only reduces methane emissions but also supports productivity. The supplement has been developed and trialled over more than five years by CSIRO in collaboration with Meat & Livestock Australia and James Cook University.

CSIRO Chief Executive Dr Larry Marshall said FutureFeed is science solving the seemingly unsolvable – reducing the emissions but not the profits.

“FutureFeed enables agriculture and the environment to be partners not competitors, helps overcome negative perceptions of the cattle industry, and gives Australian farmers an advantage in the global marketplace as first adopters of this Aussie innovation,” Dr Marshall said.

“FutureFeed is addressing some of the greatest challenges we face, including food security, sustainable production and climate change, by turning science into a real product in the hands of business so they can turn it into jobs and economic growth.

“By earning equity in FutureFeed, CSIRO can continue to invest in great science for the future of industry.”

RIGHT: ASPARAGOPSIS GROWING IN TANKS.

CSIRO scientists estimate that if the feed additive were to be adopted by 10 per cent of beef feedlots and dairy industries globally, this could reduce livestock industry greenhouse gas emissions by approximately 120 megatonnes per year, equivalent to taking around 50 million cars off the road for a year.

The company will be exploring market options for greenhouse gas abatement payments for livestock producers that adopt the supplement.

FutureFeed Pty Ltd has been formed after a competitive investment process designed to ensure a mix of investors with expertise across the livestock value chain encompassing aquaculture, feed supply, beef production and processing, and retai

Woolworths’ helping hand for community initiatives

The last 12 months has been one of the biggest on record for Woolworths’ support of vulnerable Australians, particularly for the many individuals, families and farmers impacted by drought, then bushfire, and more recently COVID-19.

“Supporting the communities in which we operate has always been part of Woolworths Group’s DNA. However, in the current crisis and during recent natural disasters, community takes on a much broader definition,” said Brad Banducci, Woolworths Group CEO.

“We have recently doubled down on our commitment to work together with partners like OzHarvest, Fareshare and Foodbank to provide food to Australians who need it most, while our eCommerce business has remained focused  on continuing to support vulnerable customers.”

Being part of almost every community in Australia means that store team members within Woolworths play an integral role in responding to immediate needs of their local community.

They provide the on-the-ground support for national community initiatives, particularly during times of disaster.

“Our store teams should be an integral part of their local community and are often directly impacted themselves by a disaster. They experience first hand what it is like on the ground, and this knowledge plays a key role in informing where our support should be directed in our national initiatives.

“It is about us listening to our team, customers and the community more broadly and uniting over the outcomes we all wish to support and achieving that through collaboration,” said Banducci.

The past year Woolworths and their major charity partners have been particularly busy.

Drought
The effects the ongoing drought has on the food industry are measurable in many ways, such as shortages of supplies and price fluctuations.
In 2018, what began as support at a local store level in regional stores in New South Wales and Queensland for communities impacted by drought, turned into Woolworths’ largest national fundraising appeal of the decade.

A combination of customer fundraising and corporate donations saw Woolworths raise over $8 million for Rural Aid, enabling them to deliver 37,231 tonnes of hay on 806 road trains to 3,233 farmers, as well two additional, full-time, on-the-ground counsellors.

Bushfires
In late 2019, with the drought worsening, bushfires were out of control, which saw businesses, homes, communities and habitat across multiple parts of the nation destroyed.

In response to the bushfires, Woolworths Bushfire Appeal in partnership with the Salvation Army was launched in November 2019 and raised over $5m.

When these bushfires hit, the Salvation Army sent in over 3,000 officers and volunteers to support the frontline emergency workers with hundreds of thousands of meals and light refreshments, many times teaming up with the local Woolworths store on the supply of goods and preparation of meals.

On New Year’s Eve and into early 2020, as the bushfires continued to devastate towns and communities, they also destroyed the habitats and food supplies of many vulnerable and endangered native species such as the Mountain Pygmy Possum, Brush-Tailed Rock Wallaby and Grey-Headed Flying Fox, which is so critical to pollination of many critical plant species.

New partnerships were borne out of the impacts the fires were having on wildlife in local communities.

“Our teams in the affected areas and our customers raised the alarm bells on what this loss of habitat could mean to the environment and asked for action to support the rescue and recovery of these animals,” said Simon Tracey, Woolworths community manager.
Woolworths began working with the NSW Government’s “Save our Species” program, to donate tonnes of fruits and vegetables directly into dozens of National Parks to feed these endangered species.

“We also extended our food rescue and recycling program to launch the ‘Woolworths Food for Wildlife Initiative’ with WIRES. This sees many of our stores donating surplus fresh food directly to the many local carers that nurturing these native animals back to health and returning them to new or old habitats as their naturally occurring food sources return,” added Tracey.

Woolworths earlier this year also expanded its S.T.A.N.D. (Support Through Australian Natural Disasters) program to incorporate four major partners – the Salvation Army, Rural Aid, Foodbank and Lifeline. Twenty cents from each sale of Woolworths Spring Water 24-pack and Woolworths Spring Water 10-litre pack is being donated to support the natural disaster work of these charities.

COVID-19
The initial spread of the coronavirus saw many people change their shopping behaviours and led to stockpiling of many essential products. At first it was toilet paper, but then the many key staple foods that Woolworths’ hunger relief partners rely on.

In March, Woolworths entered a new partnership with Meals on Wheels to supply toilet paper to help support their elderly and vulnerable clients across Australia.

“With the elderly being the  most vulnerable to the COVID-19 virus and being asked to self-isolate, this partnership allowed us to  work together with the entire  supply chain and replenishment team,” said Tracey.

Woolworths worked with dozens of local Meals on Wheels centres to distribute 320,000 rolls of toilet paper, which was two packs for almost every Meals on Wheels client in the country, across hundreds of towns and cities in urban, rural, regional and remote locations.

One of Woolworths key commitments is to addressing food insecurity and food waste.
“That is why we have a number of food relief partnerships, but it was our relationships and support of our three largest partners – OzHarvest, Foodbank and FareShare, that we immediately increased to support those in immediate need as a result of COVID,” said Tracey.

FareShare, who operate Australia’s two largest community kitchens in Melbourne and Brisbane, could not rely on its army of volunteers, so Woolworths Group stepped in to provide support with chefs from its shuttered ALH hotels business to work within the kitchens through April, May and June.

Woolworths’ national Fresh Food rescue partner, OzHarvest, likewise saw a fluctuation in food supply  and demand.

With an initial dip in available volumes of fresh food from donors, it then broke records with April being the largest volume of food they have ever rescued and distributed.

Foodbank, also saw an immediate impact on supply as the public stocked up on the many essential items such as rice, pasta, pasta sauce, tinned food and toiletries, that are always of the highest demand with the thousands of food relief charities they support.

“To assist our food relief partners without disrupting our stores during a period of increased product demand, we provided additional financial support to help them with their operating costs, then set up parallel supply chains, often purchasing food directly from our suppliers to donate directly to our partners.

“This operation ran from late March through to the end of June, with over $8 million of funds injected and many new and agile business solutions in place to support such needs in the future,” said Tracey.

Woolworths converts Melbourne stores to online delivery hubs

Woolworths will temporarily convert its Dandenong Plaza, Watergardens South and Mountain Gate supermarkets into online delivery hubs as Melbourne enters stage 4 restrictions.

The stores will close to in-store customers to solely serve online grocery delivery customers until further notice.

The conversions will enable Woolworths to pick and dispatch more online orders to customers in the surrounding suburbs. This includes online orders for the most vulnerable in the community through Woolworths’ Priority Assistance service.

During March and April Woolworths undertook similar conversions in a small number of stores in Sydney and Melbourne to meet online demand and service customers staying at home in line with government restrictions during the early stages of the pandemic.

The three stores have been carefully picked to minimise the impact on local shoppers and have the following alternative stores within five kilometres:

  • Dandenong Plaza: Dandenong South and Endeavour Hills
  • Watergardens South: Watergardens, Watervale and Taylors Lakes
  • Mountain Gate: Ferntree Gully, Scoresby and Boronia.

All team members in the three stores will be retained to either pick online orders or work in neighbouring stores. There is no impact on jobs as a consequence of the conversions.

“The demand for online delivery continues to grow at pace with more customers in self-isolation or seeking to limit their outings,” said Woolworths Supermarkets Victorian general manager Andrew Hall.

“This week we’ll be converting three of our Melbourne stores to online delivery hubs to help meet this demand and support the most vulnerable in the community.

“We understand this will be inconvenient for some of our in-store customers and have sought to minimise this as much as we can by converting stores in close proximity to others.

“It’s an uncertain time for many in Melbourne and this will ensure we have the delivery capacity to support the essential grocery needs of many more customers online.”

Gift card designed to get hospitality back on its feet

The Restaurant Gift Card and The Pub and Bar Gift Card has been launched exclusively in Woolworths at a time when the hospitality industry needs it the most.

The Card Network, in partnership with The Restaurant and Catering Association (RCA), The Australian Hotels Association (AHA) and Woolworths, has launched a collection of gift cards that can be redeemed at any restaurant, pub or bar across Australia that accepts eftpos – that’s over 20,000 hospitality venues Australia wide.

Unlike any other gift card syndicate on the market that has a limited number of participating venues, The Restaurant Gift Card and The Pub and Bar Gift Card allow Aussies to choose everything from fine dining at their favourite top-class restaurant in the city to takeaway from their local country pizza shop. The cards are also commission free for vendors – making it a win for the venue and a win for the hospitality industry.

“By partnering with Woolworths, Australia’s largest gift card sales channel, we’re able to make it convenient for Aussies to get behind their favourite restaurants and bars at a time when many hospitality businesses are trying to get back on their feet. This is more than a short term initiative; this is about providing long term value,” said The Card Network co-founder, Nick Sims.

“With no fee to the purchaser and no cost to our restaurant partners, these cards are an amazing new initiative – particularly when restaurant owners need all the support they can get right now,” said Restaurant & Catering CEO, Wes Lambert.

The Restaurant Gift Card and The Pub and Bar Gift Card are available in denominations of $50 or $100 at Woolworths nationally or via TCN’s online store.

Woolworths embraces new SAP initiative

Microsoft will supply the backbone cloud technologies for Woolworths’ SAP solutions as the retailer migrates its current SAP footprint to Azure, paving the way for the upgrade path to SAP S/4HANA.

John Hunt, CIO, Woolworths said; “At Woolworths, we’re harnessing the cloud to provide evergreen infrastructures that foster innovation and improve speed to market.

“Our cloud transformation is making work simpler for our teams, streamlining our supply chains and improving the customer experiences across our vast network of stores and online channels.

“Azure is a trusted, resilient and high performing cloud platform, supporting our ongoing digital transformation and we are confident it will provide us with the performance and flexibility required to meet our ever evolving SAP requirements in providing an exceptional customer experience.

Steven Worrall, managing director, Microsoft Australia said; “Microsoft is honoured to have been selected as one of Woolworths’ transformation partners, and trusted to run mission-critical applications such as SAP in addition to the existing online footprint.

“The cloud transformation underway at Woolworths will expedite the business for ongoing innovation, for agility and continued growth.  Woolworths’ decision reflects our joint commitment to a customer-first mindset and to support their cloud transformation.”

Damien Bueno, president and managing director, SAP Australia and New Zealand said; “Woolworths has one of the largest SAP environments in the world, which supports business-critical processes, including retail operations and finance. Migrating SAP applications and platforms to Azure, including SAP ERP and SAP Cloud Platform, will enable this great business to innovate faster than ever. In time, this will also support Woolworths’ move to SAP S/4HANA.”

Woolworths is the first company in the Asia Pacific Japan region, and one of the first in the world to leverage the Embrace initiative – again reinforcing its pioneering approach to digital transformation.