Pioneering the challenger approach in New Zealand

New Zealand is known for being a fertile environment for the growth of challenger brands, The Challenger Project's Suzie Plimmer asks why.

By Suzie Plimmer | August 10, 2016 | features

Kiwis invented the jet boat, the electric fence and Xero accounting software. In 1893, New Zealand was the first country to allow women to vote. Ernest Rutherford was the first man to split the atom. And the All Blacks are the greatest sporting team of all time (read why, here).

New Zealanders clearly have an extraordinary history of being pioneers and constantly pushing the boundaries. Especially considering it’s an island situated in the southern Pacific Ocean with a population of only 4.6 million people, half the size of London.

In recent years The Challenger Project has been closely following the many interesting brands that are breaking through their category conventions and challenging the status quo within the country.

Which makes us think - what makes New Zealand such a fertile environment for the growth of challenger brands and how are they achieving this, with such apparent ease?

 New Zealand is a challenger brand 

Doing more with less, challenging the status quo and being ambitious with the resources that are available are all classic traits of a challenger brand, but they are also traditional Kiwi traits.

New Zealand has Australia on their doorstep, a country with a greater abundance of resources, thus making them instinctively more competitive, both with their bigger neighbour and upon the world stage.

The country is positioned on the very edge of the world, instantly causing obvious issues with trade and distribution, and due to these issues, New Zealand has had to develop a certain mentality in order to be noticed at all.

This is perhaps why we can consider New Zealand, as a country, to be a challenger brand in itself.  

The country has become a melting pot of challenger brands which all aspire to continue to promote New Zealand as a forward thinking country; a challenger country. The variety and quality of challenger brands emerging out of New Zealand annually proves this.

This mentality is infiltrated throughout their society, as Peter Cullinane, founder of Lewis Road Creamery explains how, “There’s a rawness and immediacy about NZ that’s highly conducive to doing things differently, taking a risk, and that anyone can (and should) ‘give it a go’." 

Simon Coley, founder of Karma Cola agrees, “We were born into a country of not having all the solutions that you might have in a bigger, more centrally located country”.  As a result, in order to be able to compete on the world stage, Kiwis have always had to think, act and behave within the challenger approach.

The kiwi mentality 

Kiwis have ingenuity baked into their identity - what many from New Zealand call ‘the no.8 wire approach’. This is a reference to the way that Kiwis were able to utilise the full potential of a gauge steel wire, which had traditionally been used for rural fencing and apply it to all kinds of practical uses - essentially turning a resource constraint into a positive and create multiple uses of the product. New Zealand doesn’t possess the same amount of resources as the rest of the world, but by having belief and conviction coupled with being resourceful they can produce compelling challenger brands.

Take Moa Beer for instance. The recipe for the beer wasn’t created by an array of beer experts, but instead by a wine maker who had no idea what ingredients he should use. But through his great level of resourcefulness and belief, he created a great beer.

This is where a level of naivety and inventiveness works in many brand owners’ favour.  Geoff Ross, founder of 42 Below and CEO of Moa, recalls when launching 42 Below, that no one had printed directly onto glass before in the beverage sector. They didn’t take this as an answer, but instead adopted their 'can-do attitude' and found a man printing onto mugs and plates in a garage. The bottles were then printed from this garage.

The pioneering spirit whole-heartedly exists. 

Two degrees of separation 

Six degrees of separation is a theory first proposed in 1929 by Frigyes Karinthy and it implies that any anyone on the planet can be connected to any other person through a chain of acquaintances that has no more than five intermediaries.

In New Zealand they have the benefit of living by only “one or two degrees of separation”. This is due to having the opportunity to connect directly to industry experts, buyers at supermarkets, Venture Capitalists etc., with far greater ease than more competitive markets in more populated countries. As Geoff Ross says, “Getting to the CEO of Xero is a phone call/coffee/beer away. And happens that week.”

Kiwis also have a great willingness to help others to achieve their goals. Being situated on the edge of the world promotes success not only in your own company, but also for your competitors. Peter Cullinane recalls that even their biggest competitors will help out. This promotion of a community encompassing and aiding all challenger brands sets New Zealand as a glamorous place to physically get a brand to market.

Test Market 

New Zealand is a country of trial and has been for many years - Sir Edmund Hillary practiced and prepared on the Southern Alps before heading off to the Himalayas to be the first man to successfully climb Everest. It’s a country that possesses many attributes of a Western country, but of a smaller scale.

Peter Cullinane states that "given the size of the market and how dynamic it is, brand owners can obtain a real sense of understanding how the market operates, where the opportunities are and how successful one is in taking advantage of these opportunities."

This making New Zealand quite an easy place to launch a brand and to secure a level of momentum. 

Geoff Ross explains how “New Zealand is a great prep school for new brands.” The country is a great destination to ‘soft launch’ a brand and to modify the things that don’t work.

Due to limited regulation in comparison to the UK or US, brand owners have the ability to be agile and to constantly tweak their brand offering. Mistakes are far cheaper and consumers are far more forgiving about these mistakes than elsewhere.

As and when they look to expand oversees, whether that be ‘across the ditch’ to Australia or to the world stage, these brands have a grounded business model that resonates with their target audience, and they have the aid of business results to prove this.

Karma Cola founders: Mat Morrison, Simon Coley and Chris Morrison.

 Small budgets lead to bravery 

There’s a belief that creativity happens at the edges, and New Zealand is about as on the edge as you can get. Perhaps this is why there is such richness of it lying within the country.

As a challenger you must be creative as otherwise you won’t break through, and a New Zealand brand will be operating with a vastly smaller budget than their global competitors. Challenger brands thrive in these kinds of conditions. Peter Cullinane endorses this by noting that “Too many resources stifle creativity rather than enhance it, as it encourages laziness”.  He adds, “imagination is the key and having the belief that somehow one can achieve what they imagine.”

If you look to the advertising industry, agencies in Auckland are renowned world-over for their creative work and achieved many awards at Cannes Lions. Contagious awarded BBDO Colenso, Auckland as the ‘Best and Bravest’ agency in 2016, which is a huge honour.  And yet their resources and marketing budgets would have been miniscule in comparison to that of agencies and brands in UK or USA. It’s worth noting also, that agencies in New Zealand don’t revolve around ‘big data’ to drive strategies and campaigns, but instead trust their gut and inner conviction to drive decision-making.

As Simon Coley from Karma Cola says, “ We’re not the experts, but by being creative and not necessarily knowing your limitations, you give it a go, after all, “Why not, instead of why?”

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