As Nudie’s first employee, James Ajaka is well placed to recount the Nudie story. The company began life in founder Tim Pethick’s kitchen, without a single distributor on board.
“We would go out and buy fruit; chop it up; blend it; put it in bottles; stick a label on them and cap them by hand,” says Ajaka.
“At the end of the day, I’d take off all my clothes, put them in a plastic bag and drive home in my underwear because my clothes would be drenched in juice and I didn’t want my car to stink of fruit for weeks on end.”
On 8 January 2003, Nudie made its first batch of 1000 bottles of juice and managed to sell 40 to a store in Waverly, Sydney. These were mainly sold to friends and family, who’d been begged to go in and buy them.
The rest of the bottles the team gave away at beaches, trains stations, schools – anywhere it could – with flyers asking consumers to approach their local outlets about stocking Nudie. It was a slow burn, but gradually Nudie had more and more retailers calling up and requesting the product.
“Suddenly we had five outlets, then 10 outlets, then 20, then 30. I remember turning to the guys when we picked up our 50th outlet and saying we should have a party,” says Ajaka.
“Tim said ‘No, we’ll have a party when we reach 100 outlets’, but I don’t think we had the party conversation again until we picked up our 1000th outlet around the 16 month mark.”
Cornering the market
Nudie’s initial success may sound like a handful of young guys with zero industry experience, who happened to get lucky, but Ajaka says they had a clear vision for the business.
When Nudie launched, the juice market was significantly different to how it is today, and the main juice products on the market were made with concentrated, imported ingredients. There were a number of major players operating in the juice category and competing on key three factors – distribution, advertising and price – none of which Nudie was in a position to compete on.
“If Coca-Cola, the grand master of our industry, launched a product tomorrow. It would immediately go into 150,000 to 200,000 stores and it’d have its full sales force [behind it],” says Ajaka. “When we started, we didn’t know one shop that was going to stock our product.
“The second thing they compete on is advertising spend, but we knew we wanted to spend as much of our money as possible on real fruit, so we weren’t going to spend any money on advertising.
“The third thing they compete on is price. And in the game of price, the smallest party always dies first.”
Knowing it didn’t hold the cards on any of these counts, Nudie chose to make up its own rules, introducing a product that trumped the current market offerings on different criteria.
“We knew we had to come up with a solid gold product that was totally different [to current market offerings] and solved a key consumer problem,” says Ajaka. “And that was nothing but fruit in a bottle, so if you didn’t have time to blend fruit at home, we’d make it for you.
“The other thing we wanted to do was come up with a very attitudinal brand that would generate consumer recall. We wanted it to be fun and to really epitomise who we were.”
Fire fighting
On 27 May 2004, when Nudie was experiencing its fastest growth period and had just launched into Woolworths, Ajaka received a phone call from the police saying its factory was on fire – arson was suspected. Nudie had taken over the contract manufacturing plant that made its juices in the Sydney suburb of Eastgardens the year before, and as it was to discover, the facility was significantly under-insured.
Unable to produce its juices, the company came up with the ‘Nudie fire fighter’ campaign within 24 hours of the factory burning down. Every one of Nudie’s employees, from its accountants to its manufacturing team, got in their cars to distribute point-of-sale material to 100 outlets each. The material showed the Nudie character with a fireman’s hose and simply said “You may be aware the Nudie factory burnt down on 27 May, we are doing all we can to find a factory to make Nudie again, but we’ll be back. If you have any idea to help us get back to production please let us know’.
The public response to the fire was profound: the company had people sending in blenders and Nudie bottles they’d washed, kids even sent in pocket money. One of Nudie’s founding members Andrew Binetter managed to find a contract manufacturer in South Australia for the company to work with, and within six weeks Nudie juices were back on shelf.
Financially the company was almost in ruins, but encouraged by the magnitude of public support, Ajaka says it spent “huge amounts of money” (which he admits it didn’t really have) on billboards announcing its return.
Nudie also hit the streets to create a vox pop capturing people’s reactions to the fire and the fact the juices were now back on shelf. These were then run on major radio stations across the country.
“In a strange way [the fire] really enhanced people’s love of the brand,” says Ajaka.
“We really needed help to get back on our feet and so many people supported us. Consumers love that story; I think it shows the authenticity of our journey, which continues to resonate with a lot of people out there.”
Growing pains
Having overcome this major hurdle, it wasn’t all plain sailing for Nudie and sales growth slowed considerably from 2005.
The same year, Nudie founder Tim Pethick departed the business. Reports suggest that his business management skills didn’t quite match his entrepreneurial vision; however, Ajaka will only say that Pethick left to pursue other ventures and he’s ‘a true entrepreneurial spirit’.
At this juncture, Binetter took the helm and the company turned its attentions inwards to get the business fundamentals in order.
“The business wasn’t in great condition and it was tough when we didn’t have our own manufacturing facility,” says Ajaka.
In 2009, Binetter and the board asked Ajaka to take on the CEO position. In his first year as ‘chief Nudie’ revenue dropped by 15 per cent, but Ajaka concentrated on getting the right people in place and getting costs firmly under control.
“We did that by focusing on what we do best and outsourcing everything else,” Ajaka says. “For example, we had warehouses and offices in Perth, Melbourne and Brisbane but we shifted to a distribution model in those areas.”
Innovation
By 2010, the business was in shape and, having moved back into its upgraded Eastgardens facility two years prior, it was ready to increase product innovation to drive more bottles through the factory and reduce overheads.
That year, Nudie introduced a coconut water and Nudie Breakfast Juice with chia seeds, which helped grow sales by 64.5 per cent. The following year, it launched its Nothing But range in 500ml, one litre and two litre containers. The more traditional orange and apple juices are locally sourced and follow the Nudie formula of containing only fresh fruit juice and zero additives. This helped boost Nudie sales by another 65 per cent.
The excitement generated from these innovations also meant that the base business started to grow again in both the grocery and the independent channel. By the end of fiscal 2012, Nudie had tripled its size in the space of two years.
Having found its groove, Nudie launched 17 products in the past few months, including a banana smoothie; a pink grapefruit and lime juice; the V-Nudie vegetable juice range; and Wonder Winnie, its first standalone brand, which uses stevia as a sweetener.
Nudie expects to grow a further 25 per cent in the coming year and recently overtook Heinz-owed Golden Circle as Australia’s second biggest chilled juice company in the grocery segment, after Asahi-owned Lion, and has become the largest Australian-owned juice company.
Brand resonance
Despite a plethora of ‘me-too’ brands launching in the last few years, the Nudie brand continues to resonate strongly with consumers. Ajaka believes the number one reason for this is its authenticity and the quality of the product.
“When consumers buy the product, they know it’s made with only the best possible ingredients, and its delivered to them in a way that’s fun and quirky,” says Ajaka.
“They can have a laugh at the labels – we don’t take ourselves too seriously – [it’s the combination of] the brand personality and the best fruit in the world.”
The juices are predominantly cold-filled and very gently pasteurised to maintain flavour. Due to their lack of additives, the products have a short shelf life of around 30 days and have to remain constantly chilled. Ajaka says this is an expensive process from a chilled transport perspective, but means its products are the freshest possible juices on the market.
He describes the relationship its consumers have with the brand as being very personal. It still receives almost 200 emails a week from Nudie drinkers; sponsors many community-based teams around Australia; and even put the pictures of one of its drivers on its vans to help him find a date. (In case you’re wondering, he received responses from 435 women and three men).
Its authenticity, however, was called into question, when the Australian Competition and Consumer Commision (ACCC) took Nudie to court in 2008.
It alleged that Nudie represented on its Rosie fruit juice labels that the Rosie Ruby juice consisted either solely or predominantly of cranberry, and the Rosie Blue juice consisted either solely or predominately of cranberry and blueberry, when in fact 80 per cent of the Rosie Ruby juice and 78 per cent of the Rosie Blue juice was apple juice.
Discussing the case, Ajaka sighs and shakes his head, referring to the labelling issue as being “just a rookie, rookie error”. The company wanted to launch a cranberry product that could compete with Ocean Spray, which holds the majority of the cranberry juice in Australia. However, Nudie thought it’d go one better and use apple juice as a natural sweetener.
“We created this brand called Rosie and on the front label we had [an image of] a cranberry but no apple and we called it Rosie Cranberry Juice,” says Ajaka.
“We didn’t think we were being misleading at all because it said it contained apples on the back and we didn’t see anyone putting pictures of sugar cubes and jugs of water on the front of their products.
“In hindsight, this wasn’t right though. It was a massive lesson for our business, very expensive and a real learning curve.”
Ajaka admits that the court cases were probably damaging to the brand, but adds that it’s learned from its mistakes. He provides the example of 12 months ago, when natural disasters meant there was a shortage of Valencia oranges.
Nudie was faced with a choice of buying from overseas or halting production of the Nothing But 21 Oranges juice.
Instead of just removing the word ‘Australian’ from its labels, it added a highly visible note, saying that it was temporarily supplementing its orange supply with ‘multicultural oranges’.
Looking ahead
As Nudie enters its next decade, Ajaka says the company will continue to do what it does best: quirky juice flavours that no one else is doing, or flavours that other companies are doing - just a whole lot better.
“If it’s something other people are doing, we need to do it in a much better way, such as with our orange juice, which is bottled within 72 hours.”
Having focused on the Australian market for its first ten years, Ajaka says there are a couple of other “very large markets” it will be looking to enter in the next two to three years.
“We’d love to ‘Nudify’ the world,” he says.
At present, Nudie is enjoying celebrating its 10th anniversary, which was offically on 8 January 2013. To celebrate, the company acquired the naming rights to the Sydney Skinny, a 1.1km harbour swim – clothing optional – that was started by Earth Hour-founder Nigel Marsh.
“We don’t think it’s all about nudity, it’s about unadulterated, cheeky fun and forgetting your inhibitions,” says Ajaka. “We think it’s the perfect event for us.”
Asked whether he’d be taking part in the swim 100 per cent Nudie, he responds: “I’m not brave enough – besides our staff, supplier and customers will be there,” Ajaka says. “I’ll just have to find some Nudie swimming trunks.”
It just goes to show how things go in cycles: Ajaka’s Nudie experience began with him driving home in his underwear and ten years on he’ll be almost Nudie again!
