Juice maker puts squeeze on its rivals

In a highly competitive market, Nudie has come out a winner, writes Kate Jones.

It's been 10 years since Nudie juices hit Australian shelves and since then the company has overcome a devastating factory fire, the departure of its founder and damaging legal action.

It's been a rocky road, says chief executive James Ajaka, the company's first employee, but a road that has led steadily upwards.

Nudie's first speed bump was a bottle-capping machine that was incompatible with its juice bottles.

Ajaka remembers painstakingly hand-bottling the company's very first batch of bottles with Nudie founder Tim Pethick.

"Our first 1000 bottles were hand-blended, hand-capped," he says. "Afterwards, my hands were so sore I couldn't grip the steering-wheel and had to drive home with open palms, pretty much.

"They were magical nights, all that extremely hard work."

To make sure their hard work didn't go to waste, Pethick and Ajaka gave their family and friends money to buy their juice from their first distributor - a cafe in Waverley. The ploy proved successful and with the help of a new capping machine, the company got off to a good start.

Nudie's unconventional blends of fruit juices such as strawberry and banana, and blueberry and blackberry made a splash among the bottles of traditional apple and orange.

Australia's fruit juice market was worth $1.1 billion at the time of Nudie's launch in 2003. Back then most products were made from concentrate, contained preservatives and sourced from overseas fruit. With its risque name, simple stick-drawing logo and strong health appeal, Nudie posed a real threat to the major brands.

The company's popularity saw distributors grow from 25 to 50, mostly cafes close to train stations and beaches.

But it was a hard-fought battle to keep distributors, says Ajaka.

"Some told us our juice was too expensive, its shelf-life was too short and the brand was a bit out there," he says.

"But consumers were telling us it was the best juice they'd ever tasted, that they loved the brand.

"We knew the key to success was just introducing the product, just getting people to try it. We knew they'd love it."

Nudie quickly won over hesitant cafes and within 12 months of its launch the company had set up offices and distribution centres in Perth, Melbourne and Brisbane in addition to the factory in Sydney.

Combining Ajaka's expertise in marketing and Pethick's reputation as a brand guru, Nudie had generated significant media buzz.

Consumers were willing to pay more than usual for a juice that was seen as edgy and health-conscious.

Things couldn't get much better when disaster struck.

Nudie had just signed on with Woolworths when their factory burned down. "It was arson; we just don't know who did it and we were completely uninsured," says Ajaka. "I just remember standing there with Tim and Andrew [Binetter, co-founder] watching it burn."

It would have been easy to throw in the towel, but Nudie's momentum was too strong. So the company began looking for a temporary home. It took six weeks, in which time Nudie stock was off supermarket and cafe shelves.

The next challenge came in 2005 when Pethick exited the business he had poured so much effort into.

"At the time it was a big loss," Ajaka says. "But we knew we had to stick to what we were doing and do it well."

Pethick still looms large over the Nudie name.

The company's website goes to great lengths to laud his work establishing Nudie, as does Pethick's own "entrepreneur at large" site Tall Tim. Nearly four years after the blaze, Nudie's reopened its rebuilt factory.

Around the same time, Nudie ditched its own distribution trucks, cutting staff numbers from about 80 to 50.

Ajaka says this was done through a mix of retrenchments and attrition.

"It was a difficult decision for us, but financially we couldn't keep running the trucks," he says.

The company suffered yet another setback in 2008 when the Australian Competition and Consumer Commission pursued legal action against Nudie for making misleading representations about its Rosie fruit juice label.

Nudie admitted using reconstituted apple juice as the predominant ingredient in its Cranberry Cloudy and Rosie Blue juices despite advertising cranberry as the sole ingredient.

The case may have dented Nudie's squeaky-clean image but consumers didn't seem to mind. Fifteen new flavours were received well in the market, as was the company's foray into coconut water. A new kids range of lunchbox juices is due to hit shelves this week.

Ten years on, Nudie holds a 20 per cent, or $60 million, stake in the lucrative juice industry. An admirable record for a company that has learnt to take its share of good with the bad.