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Co-Branding Influencing New Product Development in New Zealand's Packaged Food Industry

7/14/2017
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One of the most significant new products launched in New Zealand’s packaged food industry recently was Whittakers Chocolate Milk by local artisanal player Lewis Road Creamery Ltd. The new product achieved unprecedented popularity and attracted widespread media attention. The immense popularity of the product was such that it quickly sold out, and a “grey market” quickly emerged, whereby bottles were being sold through online auction sites in excess of their retail price, as Lewis Road struggled to keep up with demand.

Consequently, the company has invested heavily in new production equipment; however, it has initiated a trend of well-known New Zealand brands aligning for new product launches. Confectionery player Whittakers was particularly active in this area, launching Jelly Tip chocolate, in partnership with Fonterra Brands (NZ) Ltd’s Tip Top brand, with Lewis Road also further propagating this trend through a number of new flavoured milk products, including partnering well-known New Zealand chef, Chelsea Winter, for the launch of its new Caramel flavoured milk. Rival player Cadbury Confectionery took a slightly different tact, focusing on collaboration between its own brands through the launch of its Cadbury Dairy Milk Chocolate with Jaffas, rather than collaborating with an outside company.

Outlook

This co-branding strategy has proved immensely successful for the two instigators – Lewis Road Creamery and J H Whittaker & Sons Ltd – and both companies are expected to continue to utilise this strategy as a focal point for their new product development. The strength of this strategy has seen their brands rise to prominence as innovators in packaged food, with both significantly strengthening their brand equity, and are now seen as exciting brands in New Zealand.

Thus far, the strategy has been limited to confectionery and dairy, although it is expected to expand into other categories, such as baked goods and snacks. Companies such as Griffins Foods Ltd, which has a brand portfolio well known among New Zealand consumers, are expected to engage in this strategy in the years ahead. However, it should be noted that this could be potentially detrimental, as Goodman Fielder New Zealand Ltd was subjected to harsh criticism following the launch of its Puhoi Valley Chocolate Milk, which was lauded as an imitation of Lewis Road Creamery.

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