In the late 1990s, three childhood friends, Marc, Simon and Stefan, decided all New Zealand consumers deserved fresh orange juice made from fresh oranges – not the juice on offer that was made from concentrate and full of preservatives. And these three friends knew a thing or two about fresh orange juice. Ex-All Blacks, Marc Ellis and Simon Neal already had a juicing operation catering to Auckland’s food service market. Stefan Lepionka’s own fresh juice company, Stefan’s Orange Juice, had been bought out by Frucor Beverages and Stefan had spent time in the United Kingdom trading fruit juice commodities and consulting with England’s leading fruit smoothie and fresh juice company. In 1999, the trio established Charlie’s (Charlie’s Group Limited) to bring higher-quality, not-from-concentrate juice products to New Zealand consumers. The product line quickly expanded to include a range of fruit juices such as apple and mango, sports water flavoured with fruit juice, and branded fruit such as mandarins and lemons sold to green grocers and supermarkets.
2005 was a big year for Charlie’s when the company listed on the New Zealand stock exchange in July – a mere six years after launch. In September, Charlie’s began its ‘Honest’ campaign, overhauling the brand, naming, packaging and promotion to reflect the company’s key differentiating feature of being fresh squeezed, promising Kiwi consumers ‘the juice, the whole juice and nothing but the juice’. In December, Charlie’s purchased Phoenix Organics, an Auckland-based company started in 1986 by three mates determined to produce organic juices, sparkling drinks and water that were good for consumers and made using sustainable methods that were good for the planet. The two companies represented a good strategic and philosophical fit, and when the Charlie’s and Phoenix Organics’ distribution networks were combined, Charlie’s became New Zealand’s most widely distributed fresh drinks company.
In addition to the Charlie’s and Phoenix Organics brands, an additional brand was created called Juicy Lucy, producing juice products specifically designed for both supermarkets and the food service industry, e.g. hotels, bars and restaurants. The Charlie’s brand has continued to expand and now includes five product ranges: juice, fruit smoothies (e.g. berry with acai), quenchers (e.g. lemonade), coconut coolers and water (in an eco-bottle made entirely from plants).
To compete in the not-from-concentrate segment, Charlie’s needs a controlled high-volume supply of fresh fruit that New Zealand’s comparatively small citrus industry is unable to provide. Unlike competitors
who produced their juices using concentrate sourced from around the world, Charlie’s chose to import its fresh juice from third party contract bottlers in Australia. In 2007, Charlie’s acquired its own manufacturing plant in South Australia in the middle of a citrus orchard with exclusive rights to the orchard’s output, giving it increased control over product quality and improving profit margins. When Charlie’s acquired Phoenix Organics they acquired more than just a new product line. Phoenix Organics was already exporting to Australia and the Asia-Pacific region, so Charlie’s also acquired crucial market knowledge and exporting experience. This knowledge and experience, coupled with a measured, strategic approach, has resulted in Charlie’s securing deals in 2010 and 2011 with major Australian supermarket chains Coles and Woolworths, and a six-month trial with BP Australia. These deals gave Charlie’s access to Australia’s 20 million consumers and its annual AUS$1 billion beverage market. Interestingly, it’s Charlie’s Old Fashioned Lemon Quencher that’s now the company’s ‘hero product’, accounting for some 70 per cent of the Australian volume.
While Charlie’s advertising may still be humorous or even controversial (think firecrackers and sunbathing), reflecting the personalities of its founders, the company has well and truly grown up, with sales expected to top NZ$50 million in 2011. Charlie’s brands are now sold in 16 countries, and in New Zealand the company successfully competes in a market dominated by multinationals Coca-Cola Amatil, Danone-owned Frucor and other brands as follows:
In a move designed to drive continuous improvement in everything the business does, iconic New Zealand beverage company Charlie’s changed its name to The Better Drinks Co Limited. The change represents far more than simply a new name, says The Better Drinks Co. CEO, Craig Cotton. Consumers can expect to welcome new products and new brands which, like Phoenix and Charlie’s, will all have something ‘better’ about them. Trade customers are promised the business will be better than its competitors at listening and responding to their needs.
“Better” is a challenge and a promise that gives us something to live up to,” Cotton says. “Better range, better choice and being better at everything we do from sourcing, manufacturing and final delivery via our customers to our consumers. We simply want to start by being better listeners to our staff, to our customers, consumers and partners.” Cotton says the ‘honest’ values that set Charlie’s apart from its competitors remain. “Our aim is to build a strong New Zealand company that’s winning at home and overseas, while retaining the Charlie’s values of honesty and integrity. We’re thinking big but acting small.”
The change of corporate name doesn’t affect the well known and loved Charlie’s and Phoenix brand names, Cotton says. “The separation of corporate and brand identities gives us the freedom to drive greater brand innovation and that is one of the prime goals of the move.”
For more information on the company, visit:
http://www.betterdrinks.co.nz/
Case study adapted from:
Solomon, M., Marshall, G., & Stuart, E. (2012). Marketing: Real people. Real choices (2nd ed). Auckland: Pearson New Zealand.
Scoop Media. (2013). Charlie’s grows into the Better Drinks Co. Retrieved from http://www.scoop.co.nz/stories/BU1306/S00003/charlies-grows-into-the-better-drinks-co.htm
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