Former Fonterra director Nicola Shadbolt says the recent collapse of a few dairy cooperatives should be blamed on their strategy, not their co-op structure.
Two years ago, the Hokitika co-op had no product in the domestic butter market, despite having produced Westgold butter for export since 2004.
Today, Westgold butter is the third biggest-selling butter in the North Island, with two million packs sold since its New Zealand launch in August 2016.
Westland chief executive Toni Brendish outlined Westgold’s success at the recent Dairy NZ Farmers Forum in Hamilton.
Brendish joined Westland in September 2016 with a brief from the co-op’s 400 farmer suppliers to turn the business around. To meet objectives she turned her attention to consumer feedback and business trends.
“What we started to understand was [the need] to bring this Westgold business to life in NZ,” she says.
Westland had been churning butter in a traditional way and bulk-exporting the product.
“As people were buying the product overseas, they needed to see a local NZ product as well; consumers were looking for authenticity in the product and needed to understand its provenance and the traceability,” Brendish says.
Westland developed a strategy derived from retail scanning data, knowledge of butter brands available in the market, consumer research and retailer input. It discovered that consumers were looking for a real sense of indulgence.
“We had benefitted from the fact that butter had moved from this ‘evil’ product to a good fat, now regarded by people as more of a product you could have every day [and with a sense] of indulgence.
“We used consumer research and identified a point among other butters for the everyday gourmet; there was a competitive market but we also identified by the research that there was a spot we could find in this market to put Westgold.”
The launch of Westgold butter in NZ rode on advertising and marketing promoting the co-op’s traditional Fritz churning method and Westland’s heritage and authenticity.
“We brought back the cream, heart and soul of the West Coast and ultimately Westgold to build brand awareness,” Brendish says.
Brendish says the success of Westgold butter proves that products can be brought to life by listening to consumers and customers.
- Founded in 1937
- NZ’s second-largest dairy co-op
- One of West Coast’s largest employer
- Contributes 14.35% of the region’s GDP
- Makes butter, dairy powders and specialist nutrition products.
International brands can have a local presence, says Westland Milk chief executive Toni Brendish.
She says launching Westgold butter locally enabled the co-op to sell more products overseas.
“People look to social media to confirm that international brands do have a local presence and the authenticity and the traceability of product they are looking for.”
Westgold’s success has also helped raise the milk payout to its farmer shareholders.