Butter, milk, bread, liqueur – there’s no limits on which food and beverage category Lewis Road Creamery might disrupt next. Co-founder Peter Cullinane talks cross-category innovation.
For those who need a recap on the adventures of Lewis Road Creamery, the brand had humble beginnings in the butter aisle in 2014, but what catapulted it to stardom was its Whittaker’s chocolate milk that made normally calm, civilised Kiwi consumers lose their minds.
From there, the products came flying thick and fast: Different flavoured milks, Lewis Road Bakery bread, different flavoured ice creams, custards, and a decadent chocolate butter.
As of last weekend, the company has also branched into the liquor market, releasing a chocolate cream liqueur.
In other words, founder and chief executive Peter Cullinane, who is one of the speakers at the Better by Design CEO Summit being held in March, isn’t content to sit on his haunches and bask in the success of a product that forced supermarkets to hire security guards.
Instead, he’s keen to disrupt the food and beverage industries that have been consistently done one way in New Zealand for so long – and he reckons that’s part of the reason why the public adores Lewis Road.
“Innovation is the faster builder of brand loyalty. The best way to build it is to be constantly innovating,” he says.
Lewis Road Creamery is described as being more creative than corporate, which is unusual for a business in the FMCG category.
A country-style kitchen in the company’s small, Auckland-CBD based office is where most of its R&D is carried out, with product developments moving at a lightning pace.
Cullinane says Lewis Road Creamery is not like most FMCG companies, which can predict what’s going to happen in the next year based on what happened the year before.
“The difference for us is it’s incredibly unpredictable – no two years for us will be even vaguely like each other,” he says.
“It’s very difficult to know what the hell’s going to happen, so you’ve just got to be prepared to ride with it in your attitude and company culture. I think it’s enormously good fun.”
The challenger mindset
Comparing Lewis Road to Fonterra is something Cullinane does often, and with good reason.
From the beginning, it was his intention to shake up the local dairy industry that it has such a stronghold over.
He thought Fonterra had made New Zealand’s dairy industry too focused on commodity, technology and pricing, rather than a high-quality, homegrown product.
This is what made Cullinane back away from the original plans of manufacturing the Lewis Road Creamery product themselves and focus on the branding and idea behind it instead.
“Our fundamental belief is New Zealand has enough stainless steel, we just don’t have enough imagination and that’s what we really lack,” he says.
The company adopted this challenger mindset early, and because of it, it doesn’t shy away from taking risks: take the open letter to Fonterra’s CEO published in the NZ Herald that caused it to back down on a deal to take up most of the supermarket chiller space, or boldly venturing into alcoholic beverages.
Cullinane says being able to take these gambles gives Lewis Road Creamery an advantage over bigger brands.
“We do things differently with fewer resources, but the ability to be nimble and quick and stay ahead is where the advantages lie.”
However, despite never shying away from calling out his competitors, he says product ideas don’t come from a place of rivalry, but from unravelling a strand of curiosity.
“We don’t start by thinking how can we beat someone else at their own game, necessarily. It will be more, ‘Why don’t we…’ or, ‘Wouldn’t it be interesting if…’ or ‘They’re doing it, but they’re not doing it very well.’ Almost by definition you become a challenger because it’s not an entirely new thing.”
Even as the business swells in size, he reckons Lewis Road can permanently be a challenger brand.
“I think being a challenger brand is a state of mind, and it’s viable for as long you can maintain it. Where we go off the boil is when things become too predictable and there are too many rules and regulations.”
With dairy, bread and liquor products in the mix, which direction could Lewis Road possibly move into next?
There’s a variety of products in the pipeline, but if you guessed meat products, you’re in luck.
“We’ve milk, we’ve got bread, and [an extension of] farms or the kitchen could be meat products. It’s what I expect from a country kitchen or farmhouse. We’ve got all sorts of things brewing,” he says.
The Lewis Road chocolate cream liqueur, for example, was launched after understanding Baileys was the number one liqueur in the world, selling around 82 million bottles annually.
Not content with challenging just New Zealand companies, Cullinane thought, ‘If the Irish can do it, surely New Zealand can do it better.’
He says innovating across these different categories shows New Zealand’s creative potential hasn’t been fully realised.
“Chocolate liqueur is a pretty bold thing for a little company to pull off, but it’s been a hoot,” he says.
“If Lewis Road proves anything, it’s that New Zealand’s future can lie beyond commodities and we’re genuinely capable of producing world-class products.”
Peter Cullinane is one of the speakers at the Better by Design CEO Summit being held 14 and 15 March. You can find tickets to the Summit here.
Our sister publication Idealog has two tickets to give away. To be in to win, drop them a line on Twitter at @Idealogmag and tell us a company’s culture you admire or email them at firstname.lastname@example.org.