Aussie Farmers Direct enters grocery war, promising to match Coles and Woolies

THERE’S a player in the fight for your hard-earned grocery dollar and no, it’s not Aldi. They’re doing something completely different.

IF THERE’S one thing Aussie shoppers like more than a bargain, it’s a bargain that supports Australia’s producers.

That’s exactly the offering from the newest major player in the war for Australia’s hard-earned grocery dollars.

Aussie Farmers Direct, a Victorian-based operation, started in 2005 as a small delivery-only service specialising in milk. Boy, how it has grown since.

This week, the company announced it was taking on the giants with an online grocery platform, The General Store.

It promised a “full supermarket shop” that will match prices in Coles and Woolworths, beat prices in IGA and Aldi and support Aussie farmers in a way its competitors never have.

But should you do away with your weekly meander down the aisles of your local Coles or Woolworths store? Perhaps, but this is what you should know first.

WHAT THEY PROMISE

More than 130,000 Australians already shop at the company’s website. Online shopping in the grocery market is booming and that number is expected to go through the roof.

Coles and Woolworths have capitalised on the increasing online spend but they’ll be looking over their shoulders with concern given this week’s announcement.

Aussie Farmers Direct promises shoppers they can complete their shopping and, importantly, “make a difference”.

The business model is simple: Aussie Farmers Direct is primarily supplied by, you guessed it, Aussie farmers.

There’s an orange farmer, a beef farmer, an apple farmer, a salmon farmer, a dairy farmer and so on. You can read their stories on the company’s website before you buy.

Food labelling is key to following through on their promise. Most items on the company’s website carry the Australian Made logo. The other items tell consumers how much of the product is imported. Of imported items, a 10 per cent profit is delivered to charities supporting Australian farmers.

Choice spokesman Tom Godfrey told news.com.au the promise is appealing to a great deal of Australians.

“Aussies have a huge appetite for wanting to buy Australian,” he said. “A lot of consumers are willing to pay a bit more so the group’s expansion is a welcome addition.

“They’re up against some big players and I wouldn’t expect Coles and Woolies to take this lying down.”

The National Farmers Federation certainly backs the industry’s newest big player.

“A vibrant, growing and competitive market is always going to be a good thing for both farmers and consumers,” NFF CEO Tony Mahar told news.com.au.

“The more options and avenues and more competition the better.”

Maybe you no longer need to shop in store for your bakery goods.

NOT THE ONLY PLAYER

Kogan.com, offering the Kogan Pantry, entered the supermarket war with a staggering offer in early 2015.

They promised to slash consumers’ weekly shopping bills by 50 per cent and cut into the market dominated by Coles and Woolworths.

The problem for Kogan was that they could never offer the product range Coles and Woolworths did.

CEO Ruslan Kogan acknowledged the different parties were not fighting on product range. Kogan Pantry offered 500-600 products to choose from, while Coles, for example, had upwards of 15,000. Kogan also doesn’t offer fruit or vegetables.

There are others, too. Mr Godfrey said the more the merrier.

“It’s a great thing seeing more competition against Coles and Woolworths when it comes to home delivery,” he said.

“We saw Kogan Pantry primarily focused on dry goods. Now you’ve got Aussie Farmers Direct with a guarantee for fresh Australian produce and other consumer produce for complete shopping. It’s given a genuine alternative.

“They’re not the only one: there are lots of home delivery veggie box options and others competing in the organic market. What consumers want is aggressive competition.”

While Aussie Farmers Direct is experiencing success, it hasn’t always been smooth sailing. In November last year, thousands of customers had their private information posted online.

Hackers reportedly demanded a six-figure sum of cash before posting information of 5000 customers.

In a statement, the company said the information posted was of minimal risk to customers.

“The data elements that were released are generally all used publicly, so we think any risk to customers is low, but we understand concerns about identity theft.”

Despite the hiccup, Aussie Farmers Direct chief executive Keith Louie is thinking bigger than ever.

He said the platform this week that Aussie Farmers Direct could become the “third pillar” alongside Coles and Woolies.

“With Aussie Farmers Direct and The General Store becoming the third pillar in the online grocery market, local grocery manufacturers are no longer in the grip of an online supermarket duopoly,” he said.

Time will tell whether the offer is enough to entice shoppers away from the industry’s two biggest names.

The General Store launched in Victoria but a national rollout is expected to follow.