KEY POINTS:
Is it just a coincidence that since a born-and-bred Otago-ite began running Lion Nathan's New Zealand operations the brewer has brushed aside Lion Red and elevated Speight's to the status of its national mainstream beer brand?
"You can take the boy out of the South, but you can't
take the South out of the boy," quips Peter Kean, who has been Lion's Auckland-based New Zealand managing director since March 2005.
While the decision to turn what was once a small regional label mocked by Aucklanders into a flagship brand for the brewery was ultimately Kean's, it's unlikely too much parochial sentiment went into the decision from the former Speight's Brewery salesman who today has two children at Otago University.
"Speight's is such an iconic brand now, and I guess it's such a non-offensive brand," he says.
"Everyone at some stage in their life, no matter where they're from, will have spent time on the farm or spent time on the land as a kid. People can just relate to it. It's a very honest and accepting brand."
Speight's elevation has seen Lion Red, a brand the brewer has struggled to market effectively in recent years, repositioned as an upper-North Island beer, pegging it back to what has traditionally been its strongest market.
These are the type of decisions brewery chiefs need to grapple with, and with the liquor market particularly cut throat at present, Kean has had his share of tough calls to make.
"A lot of our decisions we've made over the last couple of years since I've been in the chair have not been luck, chance and magic," he says.
"We've researched them and we've done a lot of work before we've made those sorts of strategic decisions."
The latest strategy punt has involved the launch of Steinlager Pure, a top-end brew (retailing at $25 a dozen) which Lion hopes will help develop its share of the high-margin, strongly-growing "premium" sector of the beer market.
"Part of our strategy is to innovate and create new product development," says Kean.
"We see it [Steinlager Pure] as being a great innovation in terms of Steinlager itself."
Pure is being pitched as a smoother drink than the traditional Steinlager, made entirely of New Zealand ingredients and free of additives and preservatives.
Local drinkers can expect to be bombarded with advertising around the new product when a television commercial featuring actor Harvey Keitel begins screening in about a week's time.
The commercial, shot in New York, features Keitel, whose fondness for New Zealand dates back to his role in The Piano, raving about this country's achievements including conquering Everest and making blockbuster fantasy movies.
Kean says both the beer and the commercial met with a positive response at a trade launch a week and a half ago.
"It's not very often we get a round of applause from the trade.
"Internally, obviously our people liked it [the commercial] so we took a risk and played it to the trade.
"They really liked the fact that it's homing in on what New Zealanders are very proud of, which is saying no to nuclear power and making box office hits and climbing Everest, and no to genetic modification, and as Keitel puts it, 'You're even saying no to additives in your beer now'."
Kean says innovation through new product launches is now a big focus for achieving growth for Lion.
"If you continue to innovate and excite the consumer, they're prepared to pay a bit more for it. It's no different in liquor than in clothing or cars or whatever."
Another innovation Lion has come out with this year is a beer range called Mash, a label that includes an "energy lager" containing the energy-boosting supplement guarana.
"It's probably one of the quickest products we've ever taken to market," says Kean. "We got it from whoa to go in 11 or 12 weeks, which is pretty impressive for a big corporate like us."
Also this year the company has launched a new ready-to-drink spirit product, McKenna bourbon.
"We were seen for quite a while as not bringing a lot to the market and being a bit too slow and process-driven. What we've really worked hard on in the last couple of years is to speed up, be more innovative, get more products on to the market."
This rush to put new products on the shelves smacks of the strategy of ready-to-drink-focused rival Independent Breweries, the company now in private equity ownership and in the hands of a new-look management team after the death in a helicopter crash of founder and Lion Nathan antagonist Michael Erceg.
Independent's hugely successful strategy for developing the ready-to-drink market under Erceg was to pump new concoctions out into the market, quickly pulling those that didn't sell while raking in the profits from the popular brands.
Kean denies, however, that he is imitating Independent's strategy.
"Yes they do that well but it's been one of my drivers since I got into this seat just over two years ago.
"I've always been keen on doing this [product innovation] and when you get the opportunity to do it and you get a team around you that has got the same sort of enthusiasm and passion then it hasn't been that hard.
"We're doing it in all different sections. The Independent team do it a lot more with just [ready-to-drink products]. We're looking to do it with beer, [ready-to-drink] wine and sparkling wines as well."
He concedes that it is unlikely all of Lion's innovations will be successful.
"The fact is that if you innovate and are quick to market not everything will stick but at this stage they've all started well, but we are also big enough to realise that if in time things don't [work] we're not going to linger, we'll change tack and go again."
While Lion may have learned an innovation trick or two from Independent, Independent is now benefiting from some Lion expertise.
Former senior Lion executive Doug McKay is now Independent's executive chairman and Kean's predecessor as head of Lion Breweries, Julian Davidson, is working with McKay in a senior financial role.
One of Kean's main challenges is dealing with a price war Lion is locked into with rival DB, a battle that led to beer prices hitting a 20-year low last Christmas as the companies jostled for market share.
"It has been a tough environment but we're trying to keep our head above all that. We're investing a lot more in brands and a lot more in our people and technology. We're seeing the benefit of a lot of that now which we started a couple of years ago.
"I'm really a lot more interested in value than just market share because you can't bank market share if you're losing money."
Peter Kean
* Managing director, Lion Nathan New Zealand
* Career highlights:
1986: Joined Lion Nathan as a sales executive at Speight's Brewery, Dunedin.
1997: Appointed national director of sales.
2003: Appointed managing director of Lion Nathan Wines and Spirits; attended Harvard University, Boston, studying management development.
2005: Appointed managing director for Lion Nathan in New Zealand.
* Family: Married to Judy, two teenage children.
* Interests: Rugby and lawn bowls.
