Australia’s supermarket and grocery sector generated over $139 billion in revenue in 2023 – but very little of that cash is landing in the pockets of small brands.
In fact, many emerging consumer packaged goods (CPG) businesses are being forced to shut down their operations due to lack of funding. In 2024, equity funding in Australia’s Food and Beverage Products sector plummeted by 73 per cent.
Facing a dearth of funding options, smaller brands are struggling to compete against larger private-label brands, which account for 36 per cent of all grocery sales by value in Australia. These large brands – including foreign-owned labels – are not only dominating shelf space but are also seen as stifling smaller competition, according to CPG expert Chelsea Ford.
“Big business goes unchallenged when small brands can’t scale,” said Ford, who is also an advocate for emerging CPG brands. “Consumers miss out on choice, quality, and creativity. It’s not just a business problem, it’s an industry-wide constraint that’s shrinking the future of food and drink.”
It’s not that these smaller brands aren’t popular with customers, or behind the innovation curve – quite the opposite, according to Ford. The problem is access to capital. Without it, even the most promising brands struggle to secure shelf space or scale production.
Impact of the supermarket oligopoly
Compounding the matter is the highly concentrated situation of the Australian supermarket scene, with Woolworths and Coles accounting for 67 per cent of supermarket retail sales nationally.
Critics have pointed out that such an oligopolistic structure can limit opportunities for smaller CPG brands to secure shelf space and negotiate favourable terms, making it harder to attract investment. These major players have also increased efforts to establish their own brands, providing even less space for emerging ones.
“We’re watching incredible brands with serious potential get stuck – not because their products aren’t good enough, but because the system isn’t built to support them,” Ford commented.
“If we want a food and drink industry in Australia that’s truly diverse, innovative, and competitive – not just one dominated by Big Food’s flavour-of-the-month rotations or ‘me-too’ private-label offerings – we need to start backing the brands working hard to build it.”
To combat the issue, Ford has launched a new CPG Investor Hub as part of the annual Foodpreneurs Festival. The Hub is designed to give small and emerging food and beverage brands better access to investors by helping them raise capital, gain visibility, and compete on a national level.
“Unlike other global markets, particularly the UK and USA, Australia has been missing a dedicated investor pitch event tailored specifically to the CPG sector – until now,” said Ford. “The CPG Investor Hub will bridge the gap between small-scale brands and the capital they need to scale, connecting high-potential businesses with investors who don’t just bring funding – but also strategic insight, industry know-how, and the networks to accelerate growth. Why? Because innovation isn’t the problem in Australia, access to capital is,” she said.
