Helen Twose

Personal finance and KiwiSaver columnist at the NZ Herald

Abe's Bagels - Oz market no easy touch

Ron Curteis says Abe's is eager to capture Asian markets. Photo / Richard Robinson.
Ron Curteis says Abe's is eager to capture Asian markets. Photo / Richard Robinson.

Taking a bite out of the Australian snack market has created opportunities for Abe's Bagel Crisps, but the venture hasn't been without its challenges.

Abe's Bagel Bakery general manager Ron Curteis says it has been an "interesting ride" for the company, which also sells fresh bagels through New Zealand supermarkets, alongside its popular baked bagel crisp range.

He says when Abe's began exporting its crisps to Australia about five years ago, the feeling was that if its products worked in New Zealand, they would work in Australia too.

"The reality is, it's a much tougher market.

"It's extremely competitive and if you're in the supermarket game you've got two big players and they're pretty ruthless to deal with."

On the plus side, dealing with only two players - Woolworths, which also owns Progressive Enterprises in New Zealand, and Coles - simplifies the logistics of getting products into about 1600 supermarkets across Australia. The focus then goes on making sure customers are picking the product off the shelf, says Curteis.

"Very quickly, if you're not performing you'll get cut. It's ruthless. There's no second chances over there."

In New Zealand Abe's Bagel Crisps have a healthy share of the premium snack business, competing against foods such as pretzels, corn chips and nuts.

Discounting is important on both sides of the Tasman, with up to 80 per cent of customer purchasing decisions driven by what is on special, says Curteis.

In-store demos have also been a proven tactic for getting bagel crisps into shoppers' supermarket trolleys.

"We find that once the consumer has tried the product they like it and come back, so if you've got a product that you back in terms of likeability then get it in consumers' mouths where they can buy it instantly at the same time."

Beyond Australia, Abe's has been working with New Zealand Trade and Enterprise to investigate more markets for its crisps range.

Originally it had thought of taking the "ice to Eskimos" approach and exporting the product to the United States.

But Curteis says doing business with the US supermarket chains is incredibly hard, complex, expensive and with narrow margins.

Instead, Abe's has chosen to focus on select Asian markets where bagels are less well known but consumers like the health proposition and taste of the baked crisps, he says.

"Our model is to try and trade directly with the supermarket.

"We're finding that the supermarkets in these countries - more sophisticated markets like say Hong Kong, Singapore, South Korea, Japan and even China - they're coming down to New Zealand to look for products because they're really keen to have an international section and flavour to their supermarket business."

Abe's Bagel Crisps are on the shelves of Cold Storage supermarkets in Singapore and a couple of supermarkets in Hong Kong.

"Wherever we go we find our product is quite unique and our plans are to keep pushing out our product into as many Asian countries as possible and further afield if we can make it work," says Curteis.

"I think what New Zealanders probably underestimate is how good and how unique some of our products are and it's just a matter of spending the time and potentially a little bit of investment to get up into these markets and build the relationships and get the products on to shelves and I'm sure they'll do well. There's plenty of opportunity out there."

- NZ Herald

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