Let me start by saying thank you to each and everyone of you who supported us in our battle to keep choice in the milk chiller. A choice that was threatened by a deal that would have seen one supplier, Fonterra, leverage its way to 95% of the milk volume in a major supermarket chain. And if they had won that battle, who knows what they might have tried next?
It was a very happy finish to the year, when we heard that, in essence, the deal was off the table.
And I haven’t the slightest doubt that what tipped the scales was the scale and intensity of the support we received from Roadies, up and down the country and as far afield as the U.S. and the U.K.
And so, I thought I would write this post to record our experience of ‘People power’, a force that demonstrated the influence of customer choice to change the same old business practices and ensure that in the future, customer needs will trump manufacturer machinations.
So, here’s the story as we saw it develop. It is a story in honour of you.
Late in October, we caught wind of a new range of milks from Fonterra’s Kapiti brand.
We have no problem with fair competition but we were concerned by the images of the bottles we saw.
They looked uncannily like our milk range. What really drove it home for us was the use of a look-alike bottle to ours, especially when Fonterra had invested millions into the much-trumpeted ‘light proof’ bottle used for their other milk brands.
Then the plot thickened.
We learnt through numerous sources, up and down the North Island, that Fonterra was looking to lock up all but a token gesture of the milk chillers in one of the two supermarket chains.
As we saw it, and as pretty much everyone else saw it, the launch of Fonterra’s Kapiti range was an attempt to disguise their potential dominance by including another range (Kapiti) that looked different to anything Fonterra have offered, and, uncannily like Lewis Road Creamery milk.
The assumption presumably was that no one would notice and no one would care. But our customers did care. And they started making mistakes, choosing lookalike Kapiti products thinking they were selecting Lewis Road Creamery.
The combination of the look-alike Kapiti range and a deal that would effectively exclude viable competition and therefore end customer choice was, for us, a bridge too far.
We did, as they say, ‘reach out’ to Fonterra and asked them to reconsider both the Kapiti lookalike design and the obvious inequity of the deal. Unsurprisingly, we were met with polite obfuscation.
We were left with a simple choice. To roll over or fight our corner.
We chose to fight.
We believed we had the law on our side but the system is both slow and expensive. By the time we had our day in court, we thought it would be at best, a Pyrrhic victory.
We simply couldn’t afford to wait. So we chose to fight our cause in the court of public opinion.
The first salvo was an open letter to Theo Speirings, the CEO of Fonterra.
The open letter was a facsimile of the actual letter sent to Fonterra.
And then, New Zealanders’ sense of fair play made its presence felt in an avalanche of support.
We have always reckoned that our ‘Roadies’ (our followers on Facebook) have been the backbone of our business. You sprang to action and made your views overwhelmingly evident.
It was so heartening to know we had your support as we took on the country’s largest company.
I mentioned the support we received from as far afield as the U.S. and the U.K. One email I received was from a supporter in the U.K. He suggested we should read up on the epic battle between British Airways and Sir Richard Branson’s Virgin Airways, which had numerous parallels to our situation.
A battle that Virgin ultimately won after much ‘blood and treasure’.
The story of that battle is a riveting insight into the way corporates play.
For me, the best part of the story was the advice, Sir Freddie Laker, the first airline maverick, ultimately beaten by British Airways, gave to Richard Branson: ‘at the first hint of any dirty tricks campaign, holler loud and long as quickly and as publicly as possible, for to delay could be to go under.’
That battle was fought in the early ’90s before the advent of social media.
So, while we lacked the scale and reach of Virgin, we had the full power of social media to rally support and give voice to customers’ wishes.
From the moment we first announced the issue we faced, we were inundated with posts to our Facebook page. We received no fewer than fifteen thousand plus reactions, a thousand plus shares, more than two and a half thousand comments, and organically we reached 642,228 people. Our first post alone reached 273,000 people organically and had 56,000 clicks. Then the issue took on a life of its own.
It was a staggering display of customer’s support and equally consumers’ right to choice.
And while social media was the most dominant presence, press, radio and television also picked up the story and gave it the sort of exposure that there can be no hiding from.
Finally, on 21 December , two weeks after the furore began, we heard from our sources that the basis of the deal had changed. Other competitive premium milk brands would be able to compete on their merits. We still have the Kapiti lookalike design issue to be heard in court but that’s for another day.
Without over egging the impact of social media as a voice for customers, it is hardly conceivable that companies in the future would attempt to control consumer choice knowing that customers can and will make their position so crystal clear.
In the future, customer choice is likely to be a combination of what goes on the shelf as much as what comes off the shelf and into the shopping trolley.
In the future, customers will, through the power of social media, play a more important and more direct role in dictating what they are offered and what they choose.
And the impact of social media has another ground-breaking impact.
It levels the playing field between the big and small and offers more opportunities for all. Size alone won’t dictate the outcome. Henry Ford’s dictum of ‘give them any colour they want as long as it’s black’ was the epitome of market dominance, of telling the customer what they wanted on the basis of what they could have.
Social media now gives control to the consumer, the customer, the shopper and ultimately the power to control by putting voice to their needs.
It’s a brave new world. It’s enormously exciting to be a part of it.
And it made the world of difference to us, when we really did feel like David taking on Goliath, to know that while we were dangerously out of our depth in terms of relative firepower, we had the best support of all — from our wonderfully loyal and vocal Roadies.
We can’t thank you enough.