CEO Q&A: Lewis Road Creamery chief executive Peter Cullinane

Lewis Road Creamery's Peter Cullinane. Photo / Brett Phibbs

Founder of breakout dairy brand wants to bring farmers’ markets to the supermarket, finds Holly Ryan

How much of the company's rapid success do you attribute to marketing?

It's very hard to pick what part of success is down to the product itself or the branding and marketing. We have an internal mantra which is that the branding has to be brilliant, but the product has to be better. The other part was that in the first week when we produced it, the minimum production run we could do was 1000 litres and we didn't even know if we would sell that much. Now we're selling something like 50,000 or so litres a week, just in chocolate milk, so that was something that absolutely took us by complete surprise. There's no question that the scarcity value feeds the frenzy to a degree, but for us that was really tough not being able to produce stock quick enough.

Where did the idea for Lewis Road Creamery come from?

I'm a Kiwi and a big butter eater, and over the years I noticed enormous variability in the quality of our New Zealand butter, and that is because dairy in New Zealand is primarily focused on milk powder production, and butter and milk are almost at the end of the line. So I switched to Lupark and I was happy eating that, but then I was in the supermarket and I had a moment where I was looking at my shopping trolley and thinking "This is ridiculous. Why can't we produce a butter that is better than this in New Zealand?" So that's how Lewis Road started. I went home and looked up YouTube and made some butter at my kitchen bench and then spent the next year perfecting it. The next cab off the rank was our milk. I grew up with school milk which was enough to put anyone off, but I hadn't realised that most New Zealand milk is just this side of being legal because we do all sorts of things to it. The most obvious thing is the addition of permeate which is a by-product of dairy production. Milk, to be called milk, has to have a certain percentage of milk solids etc. so you can use permeate to water down milk - you haven't added non-dairy ingredients but it's not milk that came out of the dairy shed really."

Founder of breakout dairy brand wants to bring farmers' markets to the supermarket.

Why did you think there was a market for this?

It wasn't on the back of a business plan or identifying a market niche or consumer need it was more a sense of, well, if you build a better product people will come to it. I absolutely believed that if we produced a great butter then Kiwis would recognise it and buy it and the same thing with milk and with bread and frankly, everything else we have in the works. I think if I had done a business plan it would have put me off because I would have thought, is there enough demand and is the cost of entry too high, and so some things I think you just have to believe in and do, and that's what we've done.

I think what happens with branded goods by and large is that marketers just keep taking little bits of product quality out to improve their margins and over the years you don't recognise it's happening, but it is. The products just aren't the products they once were so our goal really is to identify those sorts of products and produce a much better version of them - the way that usually, they used to be.

What's next?

I'm terrible at keeping secrets. The approach we're taking in terms of new products is that we want to bring the farmers' market to the supermarket, but to do it successfully you have to do it at scale so it's about finding products that we can produce the way they should be produced and at a volume that meets customer demand. So really in terms of future things we're looking at anything you might get from a farmers' market. It's a big list but very exciting.

Where do you see the company in five years time?

We will definitely be looking at the export markets because I think New Zealand's future lies in tourism and food - but quality food, not quantity. I think New Zealand is way too focused on volume rather than quality. I think New Zealand has a brilliant opportunity, and therefore we have a big opportunity, to export quality food. I think the markets for that are Australia to some degree but actually I really like the idea of us being strong in the UK and going back to those markets that we were originally really strong in. The West coast of the States and of course China will also be a key part of New Zealand's future.

Are you still looking at a market listing?

The need to list, which is really to raise capital, is not present for us at the moment. And the way we operate means we can move really quickly so we have a degree of freedom that we might not have if we were listed. So it's always an option but it's not on the immediate horizon.