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Published 07 June 2013 07:48, Updated 07 June 2013 08:07
Chilli Marketing brothers, from left, Christian and Kieron Barton say the ‘phenomenal’ take-up of Rekorderlig cider in Australia has been at least on par with its UK debut. Photo: Louise Kennerley
Many backpackers who travel around South America have a love affair with the region’s beer. For most, the experience yields little more than good drinking stories and a sore head. However for Kieron Barton, it was drinking a Peruvian beer while travelling that led to his eventual discovery of the popular Swedish cider Rekorderlig. Now his company markets Rekorderlig at home in Britain and in Australia.
Like Barton and his business partner, a growing number of entrepreneurs, many of whom have backgrounds in sales and marketing, are teaming up to find “cult brands” overseas and introducing them to the Australian market.
For Barton, developing his business, Chilli Marketing, took years. He and his now wife, Louise, travelled to Australia in their 20s in 2001 and fell in love with the country. Both worked in marketing – Barton in magazines and Louise for gourmet chip brand Red Rock Deli – and spent a year in the local industry before continuing their travels in South America.
“We were doing the Machu Picchu trail and we discovered this Peruvian beer called Cusqueña. All the people in our [trail] group were raving about it . . . you could drink it and not wake up with a hangover,” Barton says. “So I called my uni mate, Gareth Whittle, and did some research at an internet café about it. I said: ‘Mate, we’ve got to sell this stuff back home.’ I’m sure he thought I was a bit crazy at the time.”
Retail commentator and Retail Doctor Group chief executive Brian Walker says that with many business partnerships that use this strategy, either one or both of the partners have marketing experience.
“The building of a brand in a new market is crucial. It goes beyond traditional sales or distribution,” Walker says.
“First and foremost, these partnerships need to have an affinity with the product. They need to identify it [the product], understand their niche, have a strong understanding of exactly what their customers want and need.”
Barton brought back a few bottles of Cusqueña for Whittle to try, and the rest is history. The pair maxed out their credit cards, borrowed money from their parents and got a small bank loan. They convinced Cusqueña by promising they would “build the brand” rather than act as a strict wholesaler.
Next was targeting London’s high-end cocktail and wine bars, providing samples and getting people talking about the product. “Once some of those high-end bartenders started raving about it, then we knew it would stick around,” Barton says.
Soon after, punters began requesting the ale and it wasn’t long until UK supermarket chain Sainsbury’s stocked it. The pair spent most of their effort marketing, ensuring the right people knew about the product.
Keen to remain true to his marketing and branding roots, Barton brought in his brother Christian, who had worked for beer giant Heineken, as a partner to work on the day-to-day operations of the business. When Heineken was hit by redundancies, the trio picked up six former employees, including a 64-year-old man with some four decades of liquor industry experience. The hire proved invaluable.
“With 40 years’ experience, he really complemented our new business and acted as counsel,” Barton says.
Then, in 2008, Barton found a box of Rekorderlig cider at one of their London warehouses. Cider had started to become popular in London, but the fruit cider market was still new. Barton and his partners loved the Rekorderlig taste and decided to start marketing it in England.
“At that time our employee, who had worked at companies such as Bell’s Whisky, Red Bull and Heineken, said: ‘In 40 years I’ve only ever seen this kind of [consumer] reaction from one other product, and that is Red Bull. It’s going to take off.’ ”
The Chilli Marketing trio spent time building their relationship with Rekorderlig’s Swedish owners, who until that point had focused on growing the brand in Sweden and Germany. Again, Chilli Marketing took a brand-building approach, rather than a strict distribution-wholesaler role.
By mid-2009, Rekorderlig’s strawberry and fruit lines were selling well in Britain, and Barton decided to take the product to Australia. “It’s sunny bloody three-quarters of the year there,” he says. “It made sense.”
Barton’s brother Christian met a number of distributors in Australia and made a permanent move Down Under in May 2010. The local retail market is very different to Britain’s, with the Coles-Woolworths supermarket duopoly dominating most sales channels, Barton says. But once consumers discovered the brand, there was no stopping its growth.
Rekorderlig now accounts for 17.5 per cent of the Australian packaged cider market and, according to Nielsen data, it represented about 40 per cent of the $41 million in incremental value added to the cider category in 2012.
“The take-up in Australia has been phenomenal. It’s probably pound for pound with the UK business,” Barton says.
Chilli Marketing now has offices in London and Sydney and has plans to take Rekorderlig to the US and Asian markets soon. Rekorderlig has more than 250,000 fans on its Australian Facebook page, and it is the biggest cider brand by value in the world. Rekorderlig is currently distributed by sales company Red Island, and Coca-Cola is poised to take over distribution at the end of 2013.
“While we’ve been marketing the product, we couldn’t have done it without Red Island,” says Barton. “They have been great.”
Chilli’s success with Rekorderlig has opened doors for other opportunities, Barton says. As well as marketing beer brands Åbro (by Rekorderlig) and Cusqueña, the company has developed its own low-calorie beer, Saint, that it plans to bring to Australia soon. It is also developing a retail operation called Card Shop, which sells design-led, funky greeting cards at reasonable prices. Barton says he plans to grow the business through a combination of traditional bricks-and-mortar stores and online.
“We find a lot more people come to us with marketing ideas now. Our reach [to consumers through Rekorderlig and other brands] is currently about 100 million people a year, and with the US and South America we estimate that will grow to about 750 million by the end of the year,” he says. “The scope is huge. We would be crazy not to use that.”
Discovering the new “must-have” product in the lucrative mum market can be worth millions. For former Tasmanian architects Anita Lincolne-Lomax and husband Ralph Lincolne-Lomax, it was while operating their architecture business and after the birth of their first child that their “light bulb” moment came.
Anita Lincolne-Lomax had read about the benefits of so-called “baby wearing”, or carrying infants close to a parent’s chest for physical and mental nurturing, and had purchased a stock-standard baby carrier. But finding it uncomfortable, she began researching alternatives.
By far the best reviews and comments on mummy blogs and forums were for the Hawaiian Ergobaby Carrier, which allows parents to carry their infants and toddlers on their front, hip and back and can be used for children from birth to about the age of four.
“I have entrepreneurial blood in my family,” Anita Lincolne-Lomax says.
“At first I thought I’d bring them in and do it like a co-op, on a small Tupperware-type of scale. I ordered 10, firstly for the women in my mothers’ group, and we all had this kind of ‘ah-ha’ moment. We were finally getting the flexibility and freedom in parenting that we craved.”
Anita and Ralph Lincolne-Lomax and their four kids Tilli, Jontae, Aviya and Grace. Anita says the early stages of the business were like “blowing up a hot air balloon with a straw”.Photo: Peter Mathew
Lincolne-Lomax struck up a friendship with a manager from the manufacturer in the US, and it wasn’t long before she was asked if she was interested in the distribution rights for Australia. “I was naive at that point and didn’t really realise the potential. However, it was the right time and the right place.”
Lincolne-Lomax began spreading the word about the benefits of baby wearing at baby trade expos and online, not only to sell her product, but because she is passionate about the message. She started her business, Babes in Arms, and soon the word was out among Australian mothers’ groups and playgroups. In 2005, the company’s first year of operation, revenue grew 190 per cent and more retailers were asking to sell the product.
Marketing was also given a boost when a plethora of A-list celebrities were spotted using Ergobaby carriers with their children.
“Marketing this kind of product doesn’t work without a lot of hard work,” the mother of four says. “We occasionally get celebrity endorsements, however most of the photos you see are just celebrities who have purchased an Ergo to use themselves.”“I spent the first year travelling down the east coast of Australia wearing my daughter on my back, demonstrating how the product works.
“We’ve done everything from baby shows to blogs and we have even started the annual Australian and New Zealand Baby Wearing Week, which runs in conjunction with International Baby Wearing Week.”
While the business was profitable from the beginning, it was also extremely labour intensive, with Lincolne-Lomax likening the first few months to “blowing up a hot air balloon with a straw”. Ralph also joined the business, which by that stage was fast growing.
Early on the couple realised they needed to diversify their products to appeal to retailers. Babes in Arms now stocks several baby-wearing products, including accessories for Ergobaby and other types of slings. Today the product is in every national nursery chain, with more than 300 stockists.
“From a branding perspective, we still have representatives that travel to the retailers to educate them on how to use the products properly,” Lincolne-Lomax says. “We want to mean more to retailers. We want to be not just a product destination, but a source of information and education.”
Preventing the sale of counterfeit products is also a big part of the role of Babes in Arms. Chinese factories started making counterfeit Ergobaby carriers and selling them online for $40 to $50 less than the real thing, using auction sites such as eBay and Gumtree. Ergobaby – in which US private equity company Compass Equity is now the major shareholder – has a dedicated team that scours the internet looking for fakes and has closed several Chinese factories.It is also working with intellectual property protection company MarkMonitor to prevent the issue.
“It goes beyond damaging the brand,” Lincolne-Lomax says. “There have been cases of buckles on fakes breaking and babies actually falling out of the carriers. It’s one thing to buy a fake handbag, but this is about your child’s safety.”
Having a great brand and product is only part of the formula for these marketing partnerships, Retail Doctor Group’s Walker says.
“Reducing the noise” in an otherwise overcrowded online and social media environment where consumers are constantly bombarded with messages is important.
“With so much noise going on in the world, sometimes simplicity reigns supreme,” he says.
Finding the right business partner in a business that focuses on a brand’s reputation and story is also crucial, Walker says.
“You’ve got to know them extremely well . . . in some respects, more than your own spouse. Clear roles and responsibilities need to be set out from the beginning.”