The seven Aussie power brands Coles, Woolworths and Aldi can’t do without

IF THE supermarkets had their way, everything would be home brand. But Aussies won’t compromise on these brands.

IT TURNS out, there are seven brands we have to have.

A stoush last week between Coles and Arnott’s over the price of Tim Tams revealed there are truly some brands supermarkets consider ‘non-negotiable’.

Australia’s favourite biscuit became the centre of the latest battleground between Coles and Woolworths in the $88 billion supermarket war after Coles refused to accept price hikes on a number of products from the Tim Tam manufacturer.

Coles refused to buckle on 10 brands, including Adriano Zumbo Tim Tams, but was forced to swallow increases of between 2.2 per cent and 9.9 per cent on 44 Arnott’s biscuits it deemed “must have” items, including the original 200g variety.

While Coles and Woolworths gradually test which brands consumers can live without as they expand their private label (home brand) ranges, Aldi has already worked it out.

According to market research firm IBISWorld, the German discounter has been a key driver of growing consumer demand for, and acceptance of, private label products.

“The private label segment has grown phenomenally over the past five years, to account for almost one-third of all supermarket sales,” IBISWorld analyst Brooke Tonkin said.

That figure is expected to approach 35 per cent in the next five years.

But there are brands supermarkets will have a hard time copying. Last month, online electronics retailer Ruslan Kogan told news.com.au supermarkets have used testing to discover there are “very few categories that matter” to shoppers.

He said an easy way to see which brands consumers cared about was to walk into an Aldi. “You’ll see a handful of brands,” he said. “But when you’re buying chilli flakes, you don’t care if it’s MasterFoods or McCormick. Or salt and pepper, or flour, it makes no difference. That’s what the supermarkets have realised.”

Aussies aren’t willing to give up their Tim Tams.

The Tim Tam tantrum again highlighted the issue of the often contentious relationship between the major supermarkets and their suppliers — a division Aldi has sought to exploit by positioning itself as their partner.

“Both Coles and Woolworths have finally cottoned onto the subversive danger of the Aldi business model and specifically its rapport with suppliers and its disregard of brand power,” BusinessSpectator’s Alan Kohler explained earlier this year.

“But it’s hard for them to fight it. The business model of Australia’s supermarket duopoly is based on a combative, almost master/slave relationship with suppliers, especially those that don’t have a powerful brand.”

Aldi told news.com.au it provides “consistent, meaningful volumes and therefore viable income to those we work with”, and claims to have been “instrumental in providing economic security for many food suppliers and manufacturers”.

“As a business, we do not support the introduction of pricing levels that are unsustainable in the long term and may put pressure on the supply chain,” a spokeswoman said.

“When pricing adjustments are needed due to changes in the market, we work closely with our suppliers to reduce any negative impact and achieve the best possible outcome for their operations and our customers.”

News.com.au can reveal seven of the iconic brands — in no particular order — that Aldi knows Aussie shoppers can’t live without:

COLGATE

It’s fair to say Colgate toothpaste is an iconic part of Australian pop culture — when “Mrs Marsh” from the Colgate commercials passed away at her home in Noosa on Queensland’s Sunshine Coast in 2013, it made national headlines.

Barbara Callcott, who would dip a stick of chalk into a glass of dyed water to demonstrate how toothpaste protected enamel, was made famous to generations of Australian TV viewers through the long-running campaign beginning in the 1970s.

Colgate-Palmolive Pty Ltd, a subsidiary of Colgate-Palmolive Company of the United States, is the dominant player in Australia’s $1.7 billion soap and cleaning compound manufacturing industry, with 20.7 per cent market share, according to IBISWorld.

NUTELLA

When hipster Melbourne cafes and bakeries created a national Nutella supply shortage earlier this year as a result of their over-the-top creations — doughnuts, pastries, enormous milkshakes — it caused a national panic of near infant formula proportions.

The brand, manufactured by Italian company Ferrero, is beloved all over the world, but particularly in Australia, where fans of the hazelnut spread took advantage of the recent ‘label your own jar’ campaign to spread some classic lowbrow Aussie humour.

Despite holding just 2.6 per cent market share of the $6.2 billion Australian chocolate and confectionery manufacturing industry, Ferrero Australia, which also manufactures Kinder Surprise, Ferrero Rocher and Tic Tacs, has our supermarkets in a stranglehold.

MILO

When the TV tells a generation of Aussie kids that they’ve “gotta be made of Milo”, chances are it’s going to stick. And believe it or not, Milo is an Aussie staple that was actually invented by an Aussie.

The chocolate drink powder was invented in 1930s Sydney during the Depression by Nestlé engineer Thomas Mayne as a “direct response to the fact that children were not receiving enough nutrients from their daily diet”, according to Nestlé.

Created using “local milk knowledge and Swiss cocoa expertise”, he named the drink Milo after the Greek mythical character, who was known for his strength. The now iconic drink was launched in 1934 at the Sydney Royal Easter Show.

GILLETTE

It is, after all, the “best a man can get”. The disposable razor brand is streets ahead of the competition.

In 2010, BrandAsset Consulting boss David Evans told Marketing Magazine how Gillette had not only maintained its leading position in a declining category, but actually grown during the GFC. “In a word, this is a true ‘superbrand’,” he said.

Given the explosion in hipsters and their Ned Kelly beards, it probably helps that Australia has one of the “highest rates of body grooming around the globe”, according to Nora Mansell, brand manager of Gillette in Australia and New Zealand.

VEGEMITE

Well, obviously — it’s not like anyone is going to touch Marmite. Or, god forbid, Dick Smith’s OzEmite. Arguably the Aussiest of Aussie staples, Vegemite was actually created in response to a disruption in British Marmite imports after World War One.

Although now owned by the Americans, Vegemite is still produced at the Mondelez factory in Port Melbourne, and is consumed by around 80 per cent of Australian households. In 2013, BRW reported how the yeast spread was proving immune to private label imitators.

“There is almost a perfect correlation between Vegemite jar sales and population growth in Australia that we’ve plotted over the years,” a spokesman said at the time. And for the Americans, here’s Hugh Jackman setting the record straight.

ARNOTT’S TIM TAM

The biscuit that launched 1000 ships, and Cate Blanchett’s career, the world-famous Tim Tam was invented by former Arnott’s director of food technology Ian Norris in 1958 after a trip to the UK where he discovered the Penguin, a chocolate biscuit sandwich.

“I thought that was not a bad idea for a biscuit ... we’ll make a better one,” he told The Sydney Morning Herald in 2003. Today, Arnott’s is by far the dominant player in Australia’s $890 million biscuit manufacturing industry, with 64 per cent market share, according to IBISWorld.

For Coles, that meant it had little choice but to accept the price increases or potentially lose customers. Australian Competition and Consumer Commission Chair Rod Sims described fight as a “robust commercial dispute”.

“You would probably ­assume they can both look after themselves,” he said.

COCA-COLA

And of course, there’s “always Coca-Cola”, which regularly appears at the top of lists of the world’s most valuable brands. Coca-Cola Amatil, the bottling partner in Australia to Coca-Cola South Pacific, controls 54.3 per cent of the $4.4 billion soft drink market, according to IBISWorld.

It remains a supermarket staple even though the brand has been under intense pressure over the past decade, combating declining sales as health-conscious consumers turn away from sugary soft drinks.

Green-tinged Coke Life, the naturally sweetened alternative that no one seems to want to drink, has been a less-than-stellar addition to the Coke product suite. Despite (or because of) this, don’t expect Coles and Woolworths to attempt a knock-off version any time soon.

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• You might have noticed the five food products on here are not exactly healthy, but that doesn’t necessarily mean Australians are unhealthy eaters. It’s worth pointing out that the number one most popular household purchase among Australian shoppers is the humble banana, with 93 per cent of households purchasing an average of 19kg a year, according to Nielsen Homescan.