Trading since July 1999, childhood friends Stefan Lepionka and ex-All Black Marc Ellis linked up with another mate, Simon Neal, with a business that began as ‘Charlie – the Juicer’: ‘Because everyone has been a Charlie at some time or other, and not only do we celebrate it but encourage it – because life is about having fun’.
The company has moved on considerably since then, but the underlying principal of honesty still remains: honest ingredients and an honest approach to marketing them. Charlie’s brand juices were launched in Australia last October using the distribution network already established by the company’s Phoenix Organics subsidiary.
Rather than being imported, juices are now produced for the Australian market in the company’s recently established processing and packing plant, in orange groves in Renmark, South Australia.
Charlie’s has also extended its offering in New Zealand with additional products. From early December 2008, it began distributing its new Vitamin Water line, comprising four functional variants: Defence, Antioxidant, Multivitamin and Energy.
“Much of our focus for this year and beyond will be on expanding our distribution consumer touch points in New Zealand and in Australia,” says Lepionka. “Early orders for the Charlie’s brand in Australia have far exceeded our expectations, and the growth of Phoenix Organics in this market is strong in the horeca [hotel, restaurant, cafe] channel.”
In January 2009, Charlie’s introduced Honest Water in a 65cl PLA Eco-Bottle developed with the assistance of Good Water. “We’ve even used a biodegradable wood cellulose label,” says marketing manager, Ron Curteis. “That makes our Charlie’s Eco-Bottle one of the most environmentally friendly water bottles you can buy. That’s an honest attempt to reduce our impact on the environment, hence the ‘Honest’ name.”
The Eco-Bottle can be recycled through normal curbside recycling programmes, and as volumes grow it will necessitate specific PLA sorting at recycling centres. Curteis adds: “Unfortunately, PLA doesn’t currently meet the bottling and shelf life requirements for juice products, so we can’t use it for the rest of our Charlie’s range. However, we’re continuously looking at ways in which we can improve the environmental credentials of Charlie’s juice bottles. One day, we hope that all bottles can be made from renewable, plant-based substances.”
Where do you see Charlie’s right now, and how is the business doing?
Stefan Lepionka: Charlie’s is at a stage where the benefits of investing heavily in supply infrastructure, brands and distribution in the last few years has seen the group lead the supply of premium-branded horeca channel in its core countries of New Zealand and Australia. The group has over 10% share of the total juice market in New Zealand supermarkets.
We’re only beaten by Coca-Cola at 18% and Frucor at 42%. These two groups represent the largest multinationals we compete with. We have considerable room to grow in this market. Unlike Coca-Cola and Frucor, our growth is coming from the ‘Innovative Premium’ beverages in the chilled, Not from Concentrate (NFC)/Organic juice/drink sector and Grown Up Soft (GUS) drinks, where the above competitors have little brand and distribution exposure to this very important part of the beverage market.
Business is doing well, with gross sales growing from NZ$9m to NZ$33m (or 270%) in a space of only three years for year ending June 2008. The global economic situation is expected to cause growth rate slowdown, and we’re feeling this but still growing in early double digits on a PA comparison basis.
Our strategy is to keep reinvesting profits into growing the two key brands, and expanding our valuable distribution platform in horeca in New Zealand and Australia, further developing sub-channel outlets and covering all sales channels to grow a bigger company in the long-term.
Can you outline the thinking behind the latest launches – the OJ, the square format bottles and vitamin water?
Lepionka: All our product launches have to have a real point of difference to that currently on the market. For example, as the largest player in New Zealand’s NFC market, this gives us specific point of difference in our product offering and branding. We use this platform to expand our juice offering as well as creating beverages that meet consumer demands, such as our Old Fashioned Quencher range. Launches in the last nine months have been:
Ron Curteis: In true Charlie’s fashion, we’ve done the unexpected and moved from the standard round bottle to a unique and distinctive square bottle, which makes our products stand out on-shelf and is more attractive and functional for our consumers. Aside from the aesthetics, our square bottle actually saves up to 30% in shipping and shelf space, which is a significant benefit to the environment and to our retail partners.
What has been your most successful promotional event?
Lepionka: This has to be the Phoenix Music Festival, which promotes our Phoenix Organics range. It involves giving back to the community with a free lifestyle event.
Phoenix Fest is designed as a celebration of times when life and the food and drinks we ate were simple and uncomplicated. It gives us a chance to give back to the consumers who support the Phoenix Organics brand.
What does Charlie’s provide that other companies are just not doing?
Lepionka: We have an honest approach to business and the unadulterated products we offer to our consumers. Innovation is a key theme within our product portfolio, with very strong branding above and below the line.
How do you see your target market?
Lepionka: It’s a mindset rather than a demographic. Our consumers see the glass as half full, not empty. But mostly they care about their health, their environment and their community.
What are the big issues for the company right now?
Lepionka: The impact of the economic slowdown and how to position for this impact, which can lead to opportunities as the industry consolidates.
Where next – geographically and in new product development?
Lepionka: We plan to continue the same strategy of widening distribution and investing in our brands, Charlie’s and Phoenix Organics. We currently export to 11 countries, mainly focused on Australia, Asia, the Americas and the Middle East. We’ll continue to appoint distributors and gain customers in this region by investing in further support to grow our business and brands, so many more consumers can experience our unique product offering.
And where do you hope to see Charlie’s in five years’ time?
Lepionka: A significant Australasian beverage player admired for its honesty and the quality of its products and marketing.
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