The consumer packaged goods (CPG) market should be a battleground of ideas – not a monopoly of muscle.
In a fair marketplace, the best products win. Innovation flourishes. Prices stay honest. And consumers get real choice, not just the appearance of it.
But that only happens when the playing field is level. And right now, it isn’t.
After working with hundreds of emerging CPG founders, I’ve seen this over and over: The best ideas don’t always rise, best-funded ones do.
So what does a fair fight look like? What happens when the game is fixed? And why does it matter for Australia’s food and drink ecosystem?
Fair Fight vs. Fixed Game: How CPG Really Works
We talk about “competition” as if it’s healthy and abundant. But the reality is much more complicated.
Fair fight: competing on innovation
Fixed game: competing on shelf space bought through ‘fees’ and ‘rebates’.
Shelf space should go to the most innovative products. Instead, it often goes to those that can afford to be on shelf.
Fair fight: transparent pricing
Fixed game: retailers squeezing supplier margins
In Australia, supplier profit margins and returns are lower than in overseas markets, while Australian supermarkets earn higher profit margins than our global counterparts. That’s a pretty clear divide.
Fair fight: products winning on merit
Fixed game: categories dominated by conglomerates
In Australia, three supermarkets control over 76% of Australia’s grocery market. This isn’t a competition issue, it’s a concentration issue.
What Happens When We Don’t Play Fair
An unfair market doesn’t just harm small brands, it harms the entire food system.
Here are the consequences:
1. Price manipulation without accountability
When a few major players dominate, prices rise because they can, not because costs rise.
2. Innovation stagnation
If your shelf space is protected, there’s no incentive to innovate.
3. Barrier-to-entry economics
Listing fees, mandatory promotions, marketing levies, minimum orders, distribution costs.
These are not built for early-stage brands.
4. Retailer dependence and vulnerability
If a retailer delists a product, or squeezes margins where it’s no longer viable for a supplier, it can erase years of work.
5. Category stagnation
Dominant brands don’t want disruption, they want predictability.
They launch minor line extensions, acquire potential threats, or copy small-brand innovations with bigger budgets.
6. Private label fills the gap
When challenger brands disappear, supermarkets don’t leave shelves empty – they fill them with private labels. And with over half of APAC consumers now more likely to choose private label products than ever before, there’s even less room – and fewer sales – for smaller brands to survive.
This is not true competition.
It is vertical consolidation.
7. The illusion of choice
Shelves look crowded, but ownership is concentrated. Two parent companies can own ten competing brands in a single category.
8. Supply chain concentration risk
Mega-brands dominate co-packing, manufacturing and ingredients.
A disruption anywhere in the chain affects everyone – and the smallest brands have the fewest buffers.
9. Regulatory capture
When large corporations can afford lobbyists and compliance teams, regulations begin to favour incumbents.
Startups cannot keep up with rules designed by their competitors.
10. Market complacency
Without challenger brands, legacy players stop fighting for consumers. They defend territory instead of earning loyalty.
11. Economic inequality
Independent brands keep profits flowing through local communities, while mega-brands funnel value upwards into the hands of shareholders. In fact, Australia’s two major supermarkets have been found to wield enough power to influence supplier pricing – while still reporting record-breaking profits.
12. Loss of market dynamism
Healthy markets thrive on creative destruction, new ideas challenge old ones, and better products replace inferior ones.
Without that, markets calcify. Everyone loses except the major players.
How Do We Build a Fairer CPG Market?
If we want a competitive, innovative and resilient food and drink industry, we need to support challenger brands.
Here’s how every stakeholder can contribute.
Retailers
- Reduce listing fees and promotional levies.
- Allocate dedicated shelf space for emerging brands.
- Offer shorter onboarding cycles.
- Provide transparent sales and category data.
- Trial-based listings rather than year-long commitments.
Distributors
- Offer tiered MOQs.
- Provide education on supply chain readiness.
- Reduce onboarding fees for early-stage brands.
Investors
- Look beyond velocity – evaluate true product potential.
- Back category creators.
- Offer operational mentorship, not just capital.
Consumers
- Choose the challenger brand.
- Try the product you haven’t seen before.
- Vote with your wallet, because it affects what stays on the shelf.
Founders
- Don’t assume the system won’t make room for you.
- Build smart, collaborate often.
- Tell your story loudly and clearly.
- Remember: authenticity is your advantage.
The Bottom Line
A fair market isn’t a threat to the industry – it’s the catalyst the industry desperately needs.
Small brands bring ideas. Big brands bring scale. Consumers bring the demand. Retailers bring the access.
But none of it works if the playing field is tilted.
The future of CPG doesn’t belong to the biggest players, it belongs to the bravest ideas.
And those ideas deserve a fair fight.