Frucor Beverage

Dynamic and innovative, Frucor Beverages Ltd has made a splash across the Tasman since it started exporting to Australia in 1999, introducing products like Mizone flavoured water and its blockbuster V which has grabbed a 50 percent share of the energy drink market.

By focusing on developing innovative products where it knew it could likely be number one in the market, Group Managing Director Mark Cowsill says Frucor has grown the Australian export business from zero exports eight years ago to represent almost half its total business.

In that time Frucor has evolved into a leading Australasian drinks company with a brand portfolio including energy drinks, flavoured waters, sports drinks and soft drinks. Mr Cowsill says it now produces drinks for almost every segment of the Australian population.

“We starting exporting in 1999, determined to leverage what we had achieved in New Zealand into an offshore market. We saw an underdeveloped market in Australia, particularly in the consumer segments of mainstream energy beverages and later on flavoured water.”

He says Australia also offered a market with a high degree of similarity to New Zealand and provided the benefits of scale of competing in a market that was five times the size of the domestic beverage market.

Over time as the market has matured, Frucor’s focus has shifted from launching products that were originally successful in New Zealand to developing products specifically for the Australian market.

“We have focused on developing innovative products that will set us apart from the competition; this creates natural barriers to entry which are difficult to break.”

A major challenge on entering the Australian market was how to access potential consumers. Frucor undertook a significant TV advertising campaign to build brand awareness, and chose to distribute its beverages largely through petrol stations and convenience stores.

“Most of our products are impulse, single service purchases, therefore our ability to get the product into lots of little outlets, rather than through a central warehouse or wholesalers, has been an important challenge,” says Mr Cowsill. “Now it’s a strong competency for us that helps us leverage our strong brands.”

Today Frucor has tens of thousands of small customers spread across Australia enabling it to reach almost the entire Australian population. To service these customers it has put a 120 strong sales force on the ground, who call on clients every week, fortnight or month.

“We have purposefully continued to maintain a face-to-face direct selling approach,” explains Mr Cowsill. “At times this may not be the most efficient system, but it will always be the most effective approach in maximising sales and building customer loyalty.” 

As the Australian business developed Frucor established it as a separate business, with its own management team, a decision which Mr Cowsill says has been very successful. The Australian operation is responsible for driving the growth of exports into that market, with most of the manufacturing undertaken in New Zealand.

Mr Cowsill says the growth of the Australian business has also enabled Frucor to invest in its New Zealand manufacturing base, developing greater levels of efficiency including increased automation and sophisticated packaging technology, because there is more product going through the factory.

New product development is a priority at Frucor. Ideas are mainly derived from consumer-based research in which it invests heavily, and also from analysing data and international trends.

It runs a highly focused Trans-Tasman new product development process which collects, assesses and prioritises the ideas that come from throughout the organisation. Mr Cowsill says the Trans-Tasman team meets fortnightly, with anything up to 20 projects under discussion, ranging from a product to be launched in a few years time to something about to go to market.

The normal gestation period for a new product is about 18 months, though some have taken up to four years to come to fruition, and some will never make it to market.

Mr Cowsill says sometimes the packaging can be more technologically challenging than the drink itself.

“When we launched V consumers said to us they wanted a slimline can. At that time there was no slimline can manufacturing in Australasia or any suppliers, so we bought a second hand machine and modified it - working out how to produce that slimline can was as difficult as developing the V formula.”

Frucor has about 650 staff – 180 are located in Australia, including the direct sales team.

“We have a great culture it’s a fun place to work. Innovation is at the core of our business and a very strong can-do attitude.”

He says its success in Australia is down to skill, enthusiasm and teamwork.

“We’ve achieved these results not only by pouring million of dollars into it, but by people working together to create a great idea and then get it to market. There are not many businesses around growing at the same rate we are, it’s a tremendous motivator.”

Contact: Mark Cowsill, CEO, Frucor Beverage, phone 09 2500 100, email mark.cowsill@danone.com, www.frucor.com