nudie's troubles with the ACCC

Although I have not been actively involved with nudie for about 3 years, I am still somewhat synonymous with it, so it would be remiss of me not to comment on the recent troubles nudie has had with the ACCC.

It was widely reported, but for those who didn't see it, here is just one of the articles:

Sydney Morning Herald - June 21, 2008 "nudie's labels bare-faced cheek" http://www.smh.com.au/articles/2008/06/20/1213770924125.html

Basically, nudie's Rosie branded cranberry juices were actually 80% apple juice (and made from re-constituted apple juice to boot!). The ACCC believed nudie misrepresented them (through their labelling and marketing) to be cranberry juice.

nudie's defence hinged around two primary points. Firstly, that they were effectively using the apple juice as a natural sweetener instead of adding sugar. Secondly, that they always had the apple juice content clearly identified on the ingredients listing so they weren't hiding anything. (By the way, apple juice is significantly cheaper than cranberry juice).

I can see some marginal merit in both these points but it isn't enough to sway my opinion on the subject (nor was it enough to overcome the ACCC's view that a misrepresentation took place).

I feel disappointed about it as I am sure many other nudie consumers would. It is worth noting here that the ACCC action was sparked by a consumer complaint - a member of the consuming public felt cheated enough to raise a complaint.

There are many, many reasons I was able to build the nudie brand from nothing to one of the top 10 most influential brands in the Asia Pacific region (as voted by the readers of http://www.brandchannel.com/) in the space of just 2 years. In the life of this blog I hope to be able to reveal and explore many of those reasons. But one central one was that nudie, whilst always witty, was also always completely authentic, transparent and real. It earned rapid trust with consumers by having integrity.

nudie's actions with the Rosie cranberry juices breached the trust because the actions were not authentic or transparent and they lacked integrity (even if it was not a deliberate action on their part). In so doing they have damaged the brand and the relationship the brand has with consumers and therefore devalued it. This sparks my disappointment.

Last year I spotted some research (from both STW Communications and Grey's Eye on Australia Study) which resonated with me about what consumers thought were the attributes of a great brand. Here is a summary:

• 71% say a great brand had to be trustworthy
• 65% say it should never let them down - it should be dependable
• 63% say it should be honest
• 61% say it should be credible
• 60% say it should be the the best quality [product or service]
• Also important - it needs to be fun, innovative and recommended by people I know.

Anyone assessing nudie's actions with Rosie against this list would immediately see those actions are NOT what we expect from a great brand.

From nudie we had a right to expect better. They have let us down. How could they!!??

Whilst this question is somewhat rhetorical it does deserve some investigation to see whether there are any lessons to be learned.

I am surmising here rather than working from a basis of certain knowledge:

• A lot of pretty pedestrian juices are reconstituted. i.e. made from concentrate. Concentrate is a generally aseptic sludge derived from cooking up a juice and evaporating off the water content in the cooking process. To reconstitute concentrate you generally add back water to take it back to a 'brix' level which approximates the original unconcentrated juice. nudie frowns on concentrates and quite rightly uses real (single strength) fruit and juices in it's eponymous products. But with Rosie they have used some concentrates. It may be that they used apple juice instead of water to reconstitute those concentrates and this would account for the high volume of apple juice in the products. In that case they may have perceived themselves taking the moral high ground and may have been outraged by the ACCC's views to the contrary.
• All this deception took place with Rosie branded products, so nudie may have felt that the high standards applicable to the nudie brand could be relaxed when it came to Rosie.

There are flaws with both these arguments.

I guess I am a much more informed consumer in this area than almost any other would be. I raced out and bought Rosie cranberry juice when it was first launched. I certainly examined the labelling and packaging, but until I was informed of the ACCC action I believed it to be cranberry juice or largely cranberry juice. I really had no idea that it was in fact cranberry-flavoured apple juice. If it deceived me, it is certain it would deceive less informed consumers. There is no moral high ground for nudie to take. Common sense should have revealed the problem.

On the second point, nudie seems to have fallen into a classic trap for those who really don't understand brands. Brands are far more than just logos and brand names (identities) - great brands have personality; they have values which are played out in the brand promise. 'Brand Slapping' is where you take a brand identity and 'slap' it onto any old product or service, hoping to get some of the commercial value from the brand rub-off on the product. But if the product which has been 'slapped' doesn't live up to the brand promise, you inevitably leach value from the brand. nudie has tried to have its cake and eat it as well. They launched the new Rosie brand and product and then plastered the label with the nudie brand to provide endorsement value. This meant Rosie should have lived up to the high ideals of the nudie brand and it clearly didn't. Apart from being largely apple juice it had concentrates in it an nudie eschews concentrates.

Even with all these problems nudie could still have averted the extent of the problem by living up to their brand values in how they handled the issue. Roughly, (since I am working from memory), the timeline of the issue went something like this:

• Rosie was launched in about October 2007;
• The ACCC commenced their investigation as a result of a consumer complaint in November 2007;
• nudie changed the Rosie labels, to have pictures of Apples all over them, in January 2008;
• The ACCC announced the Federal Court action in February 2008;
• There was a Today Tonight 'expose' of the issue in February 2008 - nudie declined to comment;
• The Federal Court orders by consent were delivered in June 2008;
• The media frenzy such as the article above started after that - nudie continued to decline to comment.

An open, transparent, real brand with authenticity and integrity, a brand like nudie should be, should have leapt straight into the public forum on the issue when they first became aware of the consumer complaint (November 2007). Even if they genuinely didn't believe they were in the wrong they should have thrown themselves on their sword and cried 'mea culpa'. Since they lent the nudie brand to endorse Rosie they should have communicated directly with their nudie customers (not just the Rosie customers, who eventually saw a label change). They should have admitted the error, apologised, explained and changed and shouted the whole lot from the tree-tops (including acceptance that there was an error). They should have invited the opportunity to talk to consumers about it through the media. Such actions would have completely diffused the situation, lived up to the brand values, earned the respect of consumers and gained acceptance of the apology.

Avoidance or denial of the issue compounds it, even if the avoidance or denial is not deliberately constructed.

Great brands and great people have nothing to fear from the truth if they go through life with integrity.

I think it is entirely possible that none of this situation results from nudie deliberately or maliciously setting out to mislead or deceive consumers. They may have 'fallen into a hole' with the best of intentions (this is often called an accident), and then simply not known how to dig themselves out. A quick review of the ACCC wesbite would suggest they are in the company of many august branded players including in the FMCG space, so they certainly aren't Robinson Crusoe.

Nor do I think it is terminal for them. But they will have to work much, much harder future to regain the trust lost.

Great brands are not built through great advertising. They are built through powerful actions.

Incidentally, nudie may have to take some of the Rosie learning's and apply them to the traditional nudie products. For example, I noticed (and I came across it purely as a result of the Rosie issue), that nudie's 'cranberry, raspberry & more crushie' (otherwise known as the "fire fighter nudie") has just 2.5% cranberry. I originally devised and created the recipe for this product and when it was launched, and for a number of years afterwards, it had 15% cranberry content. It's apple content has increased from 40% at launch to 55% currently. It still comprises 17% raspberry.

As far as I know there has been no announcement from nudie that they changed the recipe somewhere along the line. In fact the nudie website still (as at 30 Jun 08) has the original recipe listed.

Once again, I can't speak to nudie's motive. It may well be that there is a perfectly sound reason for changing the recipe. For example, cranberries are very tart; cranking down the cranberry content and cranking up the apple content would make the product sweeter and smoother and possibly, as a result, more appealing to a broader taste. Another, possibly reasonable, explanation might be that there is a worldwide crop shortage of cranberry (I have no idea whether that is the case) and they simply couldn't get enough of them.

So, I am not suggesting there is anything sinister in the fact that the recipe has changed. But for whatever reason it did change there should have been direct, open communication with nudie consumers about when and why. That sort of communication is once again what we expect from the nudie brand.

Innocent, the fabulous smoothie company in the UK, last year changed the recipe of one of their launch products - mangoes & passionfruit - after about 5 years. When I was last in the UK I bought the new recipe product and couldn't honestly discern a difference from the previous one. I can't recall now why or how they changed it, but I can recall they heralded the change on their website and in their newsletter. They spoke to innocent customers and 'asked their permission' to change the recipe before they did so. And once they had received that permission, and changed the product, they told everyone they had done so.

What a great example! It is one of the reasons why the innocent brand is an inspirational example to all, and the company goes from strength to strength in Europe.