What kind of change did Phoenix make throughout its history, and how did they do it? Attachments are screenshots of Phoenix and its history.

54 CASE STUDIES IN SUSTAINABILITY MANAGEMENT AND STRATEGY: THE OIKOS COLLECTION a significant quantum leap for us, the day we learnt finally how to pasteurise,\" he said. With that technological leap, a whole range of new opportunities opened up, including the chance to modify its only product, its agship ginger fizz. The three realised that there were a number of negatives with the brandnot the least of which was its ten- dency to explode. \"I could see at that point that we needed to re-brand and we needed to exit from gin- ger zz for a number of reasons. It was a real enthusiast product and it had a lot of cult around it, but it needed to change, it needed to reect what we now knew about the market and where we wanted to head. So we made that change,\" Harris said. Morrison agreed that the technological advance of pasteurisation changed the com- pany dramatically. \"It expanded our range,\" he said, which meant moving into new premises and hiring more staff. Since its bathtub beginnings, the company had moved three times, most recently to a two-acre property with custom-built premises and plenty of room for expansion. Making a Range of Drinks The process for making drinks was pretty simple. First, ingredients were inspected and tested to ensure they were of the required standard before being blended each evening for the following day's production. Usually two drinks in the same bottle format were preparedtwo organic juices, or two sparkling waters, for example. More quality assurance tests were carried out prior to bottling. Phoenix had two fillersone for juice products and one for carbonated products, each operating at around too bottles per minute. Once filled, bottles were sealed with aluminium caps applied in a three-head roll-on capper, and passed through a spray tunnel pasteuriser to ensure the drinks were free of micro-organisms. Bottles were then labeled and boxed before being sent to the onsite warehouse awaiting delivery to point of sale. With a shelf-life of twelve months, drinks were produced to order and distributed within three weeks. Waste and recalls were minimal. The product range had expanded from the early ginger fizz. First to be added was lemonade and cola in 1990, both with honey as the sweetener. Then came a range of sparkling fruit-flavoured waters, including the unusual feijoaseldom found outside New Zealand. Later came sparkling mineral water, vegetable juice and Chai tea (see Exhibit 2.1 for a complete list of Phoenix products). In zoo4, the company was consid- ering adding a liquid chocolate that cafs could use to make hot chocolate. Phoenix produced five to six million bottles of drinks each year. Ginger beer (without the explo- sive fizz} was still one of its leading products, at around 7% of sales. Very close behind were orange mango, apple and feijoa juice. Organic juices were increasing in popular- ity, 3050% annually. Sparkling feijoa water was also popular. Even though it had grown into a multi-million-dollar company, Phoenix still had a strong \"family business\" flavour to it. Morrison preferred to deal with small companies that could buy into \"the Phoenix way of doing things.\" And, in return, he said, \"We really cement the relationship, people feel like they are being looked after by us, it's very much a personal approach.\" The emphasis on strong relationships extended to the company's 25 staff {See Exhibit 2.2 for Phoenix's organisation chart). The company prides itself on upskilling staff, lis- tening to their needs and being responsive. Having staff that were relatively happy at their work meant that productivity went up and turnover went down. \"That's a huge benefit to the company, and so I think it's very important to put a lot of energy in that area\54 CASE STUDIES IN SUSTAINABILITY MANAGEMENT AND STRATEGY: THE OIKOS COLLECTION a significant quantum leap for us, the day we learnt finally how to pasteurise,\" he said. With that technological leap, a whole range of new opportunities opened up, including the chance to modify its only product, its agship ginger fizz. The three realised that there were a number of negatives with the brandnot the least of which was its ten- dency to explode. \"I could see at that point that we needed to re-brand and we needed to exit from gin- ger zz for a number of reasons. It was a real enthusiast product and it had a lot of cult around it, but it needed to change, it needed to reect what we now knew about the market and where we wanted to head. So we made that change,\" Harris said. Morrison agreed that the technological advance of pasteurisation changed the com- pany dramatically. \"It expanded our range,\" he said, which meant moving into new premises and hiring more staff. Since its bathtub beginnings, the company had moved three times, most recently to a two-acre property with custom-built premises and plenty of room for expansion. Making a Range of Drinks The process for making drinks was pretty simple. First, ingredients were inspected and tested to ensure they were of the required standard before being blended each evening for the following day's production. Usually two drinks in the same bottle format were preparedtwo organic juices, or two sparkling waters, for example. More quality assurance tests were carried out prior to bottling. Phoenix had two fillersone for juice products and one for carbonated products, each operating at around too bottles per minute. Once filled, bottles were sealed with aluminium caps applied in a three-head roll-on capper, and passed through a spray tunnel pasteuriser to ensure the drinks were free of micro-organisms. Bottles were then labeled and boxed before being sent to the onsite warehouse awaiting delivery to point of sale. With a shelf-life of twelve months, drinks were produced to order and distributed within three weeks. Waste and recalls were minimal. The product range had expanded from the early ginger fizz. First to be added was lemonade and cola in 1990, both with honey as the sweetener. Then came a range of sparkling fruit-flavoured waters, including the unusual feijoaseldom found outside New Zealand. Later came sparkling mineral water, vegetable juice and Chai tea (see Exhibit 2.1 for a complete list of Phoenix products). In zoo4, the company was consid- ering adding a liquid chocolate that cafs could use to make hot chocolate. Phoenix produced five to six million bottles of drinks each year. Ginger beer (without the explo- sive fizz} was still one of its leading products, at around 7% of sales. Very close behind were orange mango, apple and feijoa juice. Organic juices were increasing in popular- ity, 3050% annually. Sparkling feijoa water was also popular. CASE STUDIES IN SUSTAINABILITY MANAGEM ENT AND STRATEGY: THE OIKOS COLLECTION Filling the Niche The company's founders wanted Phoenix to be something new, something different. \"We knew at the beginning that we wanted to break the monotony, the sameness and the oligopoly of the brand in those days. Seventeen years ago it was Coke and Frucor and if you wanted anything else, you were looking at the wrong country,\" Harris said. Phoenix intentionally targeted the developing cafe culture. Coca-Cola had domi- nated for years. But Harris argued that while Coca-Cola made plenty of money, it also left a gap in the market. \"There was a whole trade that was emerging called the cafe trade and it needed products that were packaged, that had the point of difference, that reected the premium, that could command those margins, that could carry the retail value,\" he said. Phoenix tried to tap into that new market by developing what cafes needed and wanted. Early on, Phoenix spotted that cafes needed to distinguish themselves in ways that would justify charging $N23$NZ4 for a drink. Harris said that Coca-Cola's approach had been to go in and offer caf owners the standard \"big red box\" (the fridge that dis- tributors supply with their products) and the usual beverage suspects. But the Coca- Cola brand, which was so powerful in many ways, was a handicap here. \"Coke was going to, just by the presence of their branding alone, to say something to the audience about what the product was. It says, 'lunchbar, lunchbar, lunchbar'. And that turns off big chunks of their audience." According to Harris, cafe owners knew that they did not have many realistic choices. Phoenix, small and smart enough to be exible and innovative, attempted to fill that niche. Its success was demonstrated by its presence in some 2,000 cafes in New Zealand, a market penetration of close to 70%. Harris would go to cafs and say, \"I know you have needs over and above whatI can meet. So what I'll get you is a fridge where we'll design the product layout, and we'll put Coke in there. We'll put water in there; we'll put fresh orange juice in there. All we want is an agreement with you that gives us enough of the fridge to get the volume we need to pay for the fridge and make this a profitable business.\" In return, Phoenix got to occupy prime fridge real estate. \"We own eye level, we own down to your navel, and they can have the rest," Harris commented. The Ties That Bind Ask Chris Morrison why he thinks Phoenix has been so successful and he will cite the relationships Phoenix had built up with suppliers and customers. \"We've built up respect and trust with our market and those things don't happen overnight. We're not a ash in the pan, we've done the hard yards, and we've built it up with no money. I think that's why we've been successful and why we're in quite a strong position now because we've paid our dues, and really been fairly modest about it. And made sure that we have good relationships with people, not only customers, but our suppliers, and the whole spectrum of people we deal with in the company." Phoenix decided to take advantage of the significant market shift represented by the new interest in organics. The company had been tracking world media for a long time and believed that organics was a global trend that would eventually hit New Zealand. When Morrison and Harris started to get early intelligence that suggested the wave was coming soon, they moved. \"We had a strategy session about three years ago that decided we wanted to create an umbrella organic brand,\" Harris said. \"Chris and I thought, 'We've been in organics forever, we're not going to be left on the sideline. This is our opportunity.' \" The plan was designed to work with the cafe trade, but also be the vehicle to help Phoenix make it big in supermarkets. The plan was to develop an organic food brand, starting with jams and salsas, complementary to its beverage products, ultimately mak- ing Phoenix a household name for all organics. It seemed like a great idea at the time. It wasn't. Harris was upfront about what he thinks went wrong. \"It's a mistake for organisa- tions which are fast growing and relatively light in terms of size to try and pick off too many different diverse areas. It becomes a distraction. It's incredibly tempting. You're really growth-addicted." Phoenix encountered a number of difficulties with the organic food concept. The big supermarkets did take more organic products, but they often segregated them into small organic sections instead of mainstreaming them with similar products. In Harris's words, they were 'ghetto-ised.' For Phoenix, it was the kiss of death. \"I could see this problem of having too diverse an offer and not having the resources to really do the thing properly,\" Harris said. \"We were going to run the risk of basically stretching our- selves too thin, exhausting our resources trying to keep too many different balls up in the air.\" Phoenix did not abandon the supermarket channel for its beverages; however, Har- ris found specialists to help Phoenix tailor beverage products to that trade. In 2004, Phoenix's beverages were in all the national supermarket chains and accounted for about 20% of its business. But selling to supermarkets demanded new strategic think- ing. \"As we start to develop product for supermarkets, we're looking at what the need is there and we're starting to see that the single-serve beverage isn't actually the main answer. We need cluster packs, we need one-litre bottles, we need bulk," Harris said. However, Phoenix could approach both the two main supermarket chains in New Zealand and others as \"the largest organic beverage company in the country." Getting Enough Phoenix was totally committed to organics and in the future hoped to have all of its bev- erages fully certified as organic by BioGro, New Zealand's leading internationally accredited organic certification body. Some products were \"natural\" rather than \"organic" (see box insert below for a definition of organic food). Going organic raised some significant issues for the company. \"Our ingredients are often up to 100% more expensive, plus we often have to carry ingredients from season to season,\" Morrison said. And, organics aside, Operations Manager John Evans pointed out that the natural