Coles' $1.16 million investment in three agricultural operators is part of a broader push to capitalise on shopper demand for local produce and accelerate the rise of second-tier operators in the competitive fresh produce segment.
Amid a fierce price war with rivals Woolworths and Aldi, Coles has invested $260,000 in the Westerway Raspberry Farm in Tasmania, $400,000 in Queensland-based Moonrocks garlic and $500,000 in the Yarranabee quinoa crop from Western Australia through its recently created Nurture Fund.
Set up in April, the $50 million fund has been established to "support small businesses in the food and grocery sector".
Coles says the "grants" are about reducing the supermarket's reliance on imported foods.
However, agrifood consultant David McKinna says the investment is about more than food security. "The big supermarkets are trying to secure their supply chains and they are very keen to invest in second-tier suppliers," Mr McKinna said.
Coles managing director John Durkan said all three fund recipients were innovators in the food industry.
He hoped Coles could build long-term relationships with the trio.
He said the Nurture Fund was not about Coles buying parts of its supply chain but rather "long-term arrangements with suppliers."
