We catch up with Peter Cullinane, ex-Saatchi ad man and founder of Lewis Road Creamery, the New Zealand dairy that’s achieving fame internationally, to discuss roadies, breast milk and how they are turning category wisdom on its head.
Why did you launch Lewis Road Creamery? What were you trying to change or put right?
The catalyst for me creating the business was a shopping visit on a cold wet Sunday afternoon. I reached up for my favourite brand of butter, Lurpak, and I suddenly thought "Why am I, a Kiwi, buying Danish butter in a country which is the biggest exporter of dairy in the world?, why are we not making the best branded dairy products and taking them to the world?"
A journey of discovery then began with making butter in our kitchen at home. But from day one, I decided that if I was going to do this, then it would have to be on a significant scale. I had no intention of being just a small artisan producer.
What is the ambition for the brand? Would you consider trading outside of NZ / Australia?
A perhaps common Kiwi approach is this great race to export. My view is that the best way to build a solid export business is to have a solid domestic business. So that at this stage is our focus. That said, we’ve just started putting out feelers in the Australian and Chinese markets.
Who are the establishment in the dairy industry in New Zealand?
The NZ market is dominated by Fonterra whose emphasis is on commodities and export. We are at the other end of the spectrum. We compete on the local market but our approach and product line up is deliberately focused on quality. My sense of it is that in NZ at least, we always seem to want quantity over quality. With Lewis Road we wanted to turn that on its head. So the focus has been on the end product, not the means of production. We use third party production for everything but everything we produce is uniquely ours.
People have many different definitions of a challenger brand. What does a challenger mean to you?
To me, a challenger brand is one which turns conventional category wisdoms on it head. Pretty much everything we’ve done from day one has been the opposite of what might be expected. It couldn’t be otherwise because initially, the conventional wisdom was that we would never get a foot in the door.
Who is the typical Lewis Road Creamery consumer?
We’ve taken a perverse pride in stealing that old Coke line about ‘anyone with a mouth’. We’ve been very careful not to be seen to be pigeon holing our customers and in reality they’re a diverse lot. The one thing that binds them all is a respect for quality. Our rather immodest mantra is ‘the branding has to be brilliant and the product has to be better.’
Challenger brands have to use their in-house media very effectively, how have you used your house-media e.g packaging to your advantage?
Our packaging is of course our strongest medium. We sweated the original butter packaging for the best part of a year. We wanted a look that was neither modern nor old fashioned, but rather timeless. Once we laid down the design foundation, new packaging design is a fast, painless process. Another house-media has been social media. It's really been our lifeblood. There is not a shadow of doubt that we could not have successfully launched Lewis Road Creamery before the advent of social. We have close to 100,000 Facebook likes and we treat every ‘Roadie’ with utmost respect. For example we have a policy that any post will be responded to within two hours.
Challengers don’t have the resource to just prioritise, they have to sacrifice some areas entirely and overcommit to others, where has this been the case with the Lewis Road brand?
Our focus has been on quality above all. If it’s not demonstrably better than anything else it can be compared to, we won’t do it. It would be all too easy to take our brand and apply it to 'me too' products, but ultimately that would devalue the brand and the whole point of creating it.
What was the origin of the much talked about breast milk campaign?
We were approached by Breast Cancer Research with the idea. It was certainly ‘out there’ for a brand as young as ours, so not without its risks. We expected good coverage and certainly got it! Fascinatingly, it played out in text book fashion. On the morning of the launch we took a caning from the ‘Breast Milk Authority. But from then on in, support came from all fronts and the campaign has gone on to raise significant funds for the charity and further support, across the board for our brand.
The scarcity of the Lewis Road Creamery chocolate milk no doubt increased desire for the product from consumers and created a frenzy around the brand on social media. What do you think are the lessons learnt from a product launching in this way? Could this scarcity and desire be engineered?
No one could have predicted the success of our Chocolate Milk. Our original production run was 1000 litres and we were concerned about over production. Now we’re up to 40,000 litres a week and we can’t get near to meeting demand. Without doubt it’s always better to have demand exceed supply but nothing like the extent we’ve encountered. We have used up some serious brownie points with the trade as well as consumers in large parts of the country who still can’t get it and of course we’ve forgone significant sales. For all that, it’s rated as one of if not the most successful new launch in grocery in the last decade (or more).
Challengers often think about constraints very differently to established players. Seeing them as springboards for new possibilities and opportunities rather than as a reason to reduce their ambitions. Do you have any stories of how you’ve used constraints to your advantage on the brand?
I think the expression is ‘give me the challenge of a tight brief’. Everything we’ve done has been based on what we can achieve with the tools at hand. In dairy, technology has been used to ‘enhance’ the value of every litre of milk that comes from the cow shed. But that same technology produces products that are ever more removed from the original products. Milk for example is over treated and products such as permeate are added. It’s still legally milk but not as we know it! What we’ve done is to make a virtue out of going back to simplicity. It’s dairy the way it should be. Perhaps the best example of all has been the wild success ofChocolate Milk. It’s nothing more or less than NZ’s finest chocolate from Whittaker’s and our milk. No additives, preservatives etc.
What are your 3 bits of advice for building a strong challenger brand?
- Always be open to new opportunities. Our partnerships with Whittaker's Chocolate or with Breast Cancer Research and the 'Breast Milk' campaign, these initiatives were considered quite 'out there' and risky for us but they've been hugely instrumental to our growth. As a Challenger you need to be open to ideas and sometimes take that risk - more often than not your instinct and willingness will serve you well!
- Commit to making a better product than the market leader. This is so often an area where the leader brands get complacent as they go for volume and higher margins. It's an area, as a challenger you can often win.
- It's crucially important to take your supporters with you on the journey. Both supporters in the trade and the fans (we call 'Roadies'), it's these guys that give a brand that momentum, it's key that they are respected and encouraged to get involved.
Lewis Road Creamery in Brief:
- Lewis Road Creamery becomes market leader in flavoured milk category in NZ just 3 weeks after launch.
- Reached $4.2m of sales of Chocolate Milk in just 3 months (October ‘14 – April.
- Recently became market leader in Organic Milk segment with 47% share in NZ.
- Sales of Lewis Road Creamery butter continuing to grow over 110% year on year.
Source: IRI-Aztec MarketEdge Scan Data, NZ Grocery (value), data to 01/02/15
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