Navigating Challenging Business Environments: The Importance of Commercially Astute Leaders
Debbie Morrison • July 13, 2023

Organisations are facing numerous challenges that can impact their growth and profitability. The Bega Group's recent property deal with Charter Hall serves as a stark sign of the times, highlighting the critical role of commercially astute leaders in successfully navigating these challenges. This blog explores the implications of the deal, sheds light on the dairy industry's challenges, and emphasises the significance of hiring the right leaders to steer organisations towards success.


Challenges in Australia’s Dairy Industry

The Bega Group operates in the dairy industry, which is currently facing several significant challenges. Firstly, Australian milk production has been on the decline, with a reduction of over 700 million litres in the past two years alone, amounting to a 9% decrease. This decline in milk production has a direct impact on Bega Group's operations, necessitating strategic decision-making to mitigate the effects.


Secondly, the intense competition for raw milk within the industry poses long-term challenges. With limited industry rationalisation, Bega Group expects this competition to persist beyond the current year. This scenario necessitates proactive measures to secure a reliable supply of raw milk and maintain profitability.


Lastly, the potential non-cash impairment of bulk dairy ingredient assets further adds to the industry's challenges. As the dynamics of the dairy market continue to evolve, commercially astute leaders must make informed decisions regarding the valuation and utilisation of these assets.


The Importance of Commercially Astute Leadership

In the face of these challenges, having the right commercially minded leaders in place becomes crucial for organisations like the Bega Group. These leaders play a pivotal role in reducing debt, supporting strategic direction, and ensuring sustainable growth.


Debt Reduction and Strategic Direction 

The Bega Group's property deal with Charter Hall is a prime example of how commercially astute leaders can bolster the company's balance sheet. By divesting the property at 1 Vegemite Way in Port Melbourne for $114.6 million and leasing it back, Bega Group can reduce its debt while continuing operations. This deal was likely identified, structured, and brokered by leaders who possess a deep understanding of the financial landscape and strategic business opportunities.


Implications on Financial Performance 

The successful execution of the property deal has positive implications for Bega Group's financial performance. The injection of funds aids in paying down debt and supports the company's strategic transition to a brand-focused organisation. Leaders with a keen eye for financial opportunities can identify such deals, evaluate their potential impact, and negotiate favourable terms that align with the company's objectives.

Overcoming Input Cost Increases

Commercially astute leaders are adept at navigating input cost increases, such as rising prices of raw milk, packaging, logistics, and energy. Bega Group's investment in continuous improvement programs, technology, and successful price increases demonstrate their ability to mitigate these challenges. Through effective cost management and strategic initiatives, leaders can maintain profitability even in the face of cost pressures.


Beyond Customer Loyalty

While customer loyalty is valuable, relying solely on it is not a sustainable strategy for success in most industries. Commercially astute leaders recognize the importance of continuously evolving and strengthening brands, diversifying product offerings, and exploring new markets. Bega Group's success in growing its white milk brands, convenience, and food service channels highlights the strategic vision and innovation required to remain competitive.



Attributes of Commercially Astute Leaders

Boards of directors seeking commercially astute leaders should consider the following key attributes and characteristics:

  • Financial Acumen
  • Leaders must possess a strong understanding of financial concepts, including cash flow management, investment strategies, and risk assessment. This expertise enables informed decision-making in complex financial environments.
  • Strategic Thinking
  • Leaders must demonstrate the ability to develop and execute long-term strategies aligned with the organisation's goals. They should be forward-thinking, adaptable, and capable of identifying opportunities amidst challenges.
  • Market Insight
  • Having a deep understanding of market dynamics, industry trends, and consumer behaviour enables leaders to make informed decisions and stay ahead of the competition.
  • Collaboration and Influence


Effective leaders foster collaboration across departments, build strong relationships with stakeholders, and influence decision-making processes. This skill set is vital in navigating complex negotiations and driving organisational growth.


Identifying Commercially Astute Leaders

Organisations can identify commercially astute leaders by expanding their networks and partnering with executive search firms. These firms specialise in identifying top talent and can provide access to a diverse pool of executives with the desired attributes. Furthermore, organisations should prioritise comprehensive assessments, including interviews, reference checks, and behavioural assessments, to evaluate candidates' suitability for the role.


The Right Time for Talent Pooling

Given the dynamic nature of today's business environment, organisations should proactively talent pool for commercially minded executives. This approach enables them to stay ahead of emerging challenges, capitalise on strategic opportunities, and maintain a competitive advantage. By developing a strong talent pipeline, organisations can ensure a smooth leadership succession process and minimise disruptions during critical transitions.

The Bega Group's property deal with Charter Hall serves as a powerful example of the critical role commercially astute leaders play in navigating challenging business environments. The dairy industry's decline in milk production, intense competition, and potential impairments underscore the need for leaders who possess financial acumen, strategic thinking, market insight, collaboration skills, and influence. By hiring the right leaders, organisations can reduce debt, support strategic direction, overcome input cost increases, and build sustainable profitability. In today's fast-paced business landscape, organisations must prioritise the identification and development of commercially astute leaders to ensure long-term success.


At ELR Executive we have over 20 years of experience helping FMCG and Food and Beverage organisations identify and attract the right talent to help achieve better business outcomes. If you'd like to learn more about how we can help you identify commercially astute leaders, speak to us today.


By John Elliott June 26, 2025
You don’t hear about it on the nightly news. There’s no breaking story. No panic. No protests. Just rows of vegetables being pulled out of the ground with no plan to replant. Just farmers who no longer believe there’s a future for them here. Just quiet decisions — to sell, to walk away, to stop. And if you ask around the industry, they’ll tell you the same thing: It’s not just one bad season. It’s a slow death by a thousand margins. 1 in 3 growers are preparing to leaveIn September 2024, AUSVEG released a national sentiment report with a statistic that should have set off alarms in every capital city: 34% of Australian vegetable growers were considering exiting the industry in the next 12 months. Another one-third said they’d leave if offered a fair price for their farm. Source: AUSVEG Industry Sentiment Report 2024 (PDF) These aren’t abstract hypotheticals. These are real decisions, already in motion. For many, it’s not about profitability anymore, it’s about survival. This isn’t burnout. It’s entrapment. Behind the numbers are people whose entire identity is tied to a profession that no longer feeds them. Many are asset-rich but cash-poor. They own the land. But the land owns them back. Selling means walking away from decades of history. Staying means bleeding capital, month by month, in a system where working harder delivers less. Every year, input costs rise, fuel, fertiliser, compliance. But the farmgate price doesn’t move. Or worse, it drops. Retail World Magazine reports that even though national vegetable production increased 3% in 2023–24, the total farmgate value fell by $140 million. Growers produced more and earned less. That’s not a market. That’s a trap. What no one wants to say aloud The truth is this: many growers are only staying because they can’t leave. If you’re deep in debt, if your farm is tied to multi-generational ownership, if you’ve invested everything in equipment, infrastructure, or land access, walking away isn’t easy. It’s a last resort. So instead, you stay. You cut your hours. Delay maintenance. Avoid upgrades. Cancel the next round of planting. You wait for something to shift, interest rates, weather, prices and you pretend that waiting is strategy. According to the latest fruitnet.com survey, over 50% of vegetable growers say they’re financially worse off than a year ago. And nearly 40% expect conditions to deteriorate further. This isn’t about optimism or resilience. It’s about dignity and the quiet erosion of it. Supermarkets won’t save them, and they never planned to In the current model, supermarket pricing doesn’t reflect real-world farm economics. Retailers demand year-round consistency, aesthetic perfection, and lower prices. They don’t absorb rising input costs, they externalise them. They offer promotions funded not by their marketing budgets, but by the growers’ margins. Farmers take the risk. Retailers take the profit. And because the power imbalance is so deeply entrenched, there’s no real negotiation, just quiet coercion dressed up as "category planning." Let’s talk about what’s actually broken This isn’t just a market failure. It’s a policy failure. Australia’s horticulture system has been built on: Decades of deregulated wholesale markets Lack of collective bargaining power for growers Retailer consolidation that has created a virtual duopoly Export-focused incentives that bypass smaller domestic producers There’s no meaningful floor price for key produce lines. No national enforcement of fair dealing. No public database that links supermarket shelf price to farmgate return. Which means growers, like James, can be driven into loss-making supply contracts without ever seeing the true economics of their product downstream. But the real silence? It’s from consumers. Here’s what no one wants to admit: We say we care about “buying local.” We say we value the farmer’s role. We share those viral posts about strawberries going unsold or milk prices being unfair. And then we complain about a $4 lettuce. We opt for the cheapest bag of carrots. We walk past the "imperfect" produce bin. We frown at the cost of organic and click “Add to Cart” on whatever’s half price. We’re not just bystanders. We’re part of the equation. What happens when the growers go? At first, very little. Supermarkets will find substitutes. Importers will fill gaps. Large agribusinesses will expand into spaces vacated by smaller players. Prices will stay low, until they don’t. But over time, we’ll notice: Produce that travels further and lasts less. Fewer independent growers at farmer’s markets. Entire regions losing their growing identity. National food security becoming a campaign promise instead of a reality. And when the climate throws something serious at us, drought, flood, global supply shock, we’ll realise how little resilience we’ve preserved. So what do we do? We start by telling the truth. Australia is not food secure. Not if 1 in 3 growers are planning to exit. The market isn’t working. Not when prices rise at the shelf and fall at the farmgate. The solution isn’t scale. It’s fairness, visibility, and rebalancing power. That means: Mandating cost-reflective contracts between retailers and suppliers Enabling collective bargaining rights for growers Building transparent data systems linking production costs to consumer prices Introducing transition finance for smaller producers navigating reform and climate pressure And holding supermarkets publicly accountable for margin extraction But more than anything, it means recognising what we’re losing, before it's gone. Final word If you ate a vegetable today, it likely came from someone who’s considered giving up in the past year. Not because they don’t care. But because caring doesn’t pay. This isn’t about nostalgia. It’s about sovereignty, over what we eat, how we grow it, and who gets to stay in the system.  Because the next time you see rows of green stretching to the horizon, you might want to ask: How many of these fields are already planning their last harvest?
By John Elliott June 20, 2025
If you're leading an FMCG or food manufacturing business right now, you're probably still talking about growth. Your board might be chasing headcount approvals. Your marketing team’s pitching a new brand campaign. Your category team’s assuming spend will bounce. But your customer? They’ve already moved on. Quietly. Like they always do. The illusion of resilience FMCG has always felt protected, “essential” by nature. People still eat, wash, shop. It’s easy to assume downturns pass around us, not through us. But this isn’t 2020. Recessions in 2025 won’t look like lockdowns. They’ll look like volume drops that no promo can fix. Shrinking margins on products that no longer carry their premium. Quiet shelf deletions you weren’t warned about. The data’s already there. According to the Australian Bureau of Statistics, consumer spending is slowing in real terms , even as inflation eases. The Reserve Bank confirmed in May: household consumption remains subdued amid weak real income growth . And over 80% of Australians have cut back on discretionary food spending , according to Finder. They’re still shopping, just not like they used to. A managing director at a national food manufacturer told me recently: “We won a new product listing in April. By July, it was marked for deletion. The velocity wasn’t there, but neither was the shopper. We’d forecasted like 2022 never ended. Rookie mistake.” That one stuck with me. Because I’ve heard it before, just in different words.