Woolies is charging just $4.50 for a 375gms bottle and $10 for a 1kg tub. In fact, the new Cloverdale brand is so cheap it undercuts even Woolies home brand honey ($5.30) by at least 10%. The new imported honey brand also undercuts the traditional Capilano branded 100% Australian honey by even more; Woolies is currently pricing the equivalent Capilano branded 375gms bottle at $7.20 a jar – more than half the price of the Cloverdale brand again.
Just why Capilano’s merchant banker owners at Hive and Wellness have undercut both their main brand and the competition so savagely has prompted not a little angst in the Australian honey industry.
Last month the company’s new CEO, Ryan D’Almeida revealed sales were booming, and up nearly 30% amidst the panic-buying associated with the Covid-19 crisis.
The sales increase was achieved despite higher retail prices for honey and without any Capilano imported honey offering in supermarkets
Indeed, back in 2018 the company swore off imported honey, after Coles dumped its Allowrie imported honey brand, amidst widespread community concerns over its Chinese origin, and claims of adulteration.
And in the wake of the company’s privatization sale to a merchant banking consortium, the company told Australian beekeepers that it would be focussed on them, and on selling their honey into China.
That has all changed.
An email from Ryan D’Almeida to the company’s honey suppliers in late March 2020 listed a number of reasons for the turn about.
D’Almeida said that Australian honey production was down some 50% because of the bushfires. So Capilano is having to pay higher prices to beekeepers to secure its honey supply.
He said that the current wholesale price of $6.10 per kg is a record high.
The record high translates to a higher retail price for the company’s most popular product - a 500gms bottle; it now costs consumers $8.60 compared to just $7.30 a year ago.
D'Almeida claimed that retail honey prices are now so high that up to 30% of Australian honey consumers are buying other spreads instead of honey.
“At the current honey price of $6.10, our most popular product (500g upside-down pack) will be on shelf in most stores at $8.60, compared to $7.30 this time last year. The challenge is that at some point, value-conscious consumers (approximately 30% of the market) will stop buying honey because it is getting too expensive, when they have a choice of other spreads at half the price…”
Despite the company’s switch to imports, D’Álmeida said the company would continue to buy as much Australian honey as it can get, and would not be sourcing Chinese honey for its new Cloverdale brand.
A large proportion of the marketing budget would continue to go to the 100% Australian honey product, he said, claiming this shows the company is “supporting you and our vitally important Australian beekeeping industry”.
Now that the Cloverdale honey is actually on the shelves, with the label indicating that as little as 10% of the honey in each jar is Australian honey, the company’s beekeeping suppliers may be questioning whether Capilano’s switch to imported honey is the kind of support they really want or need.