In Conversation with Cornel Lodewyks
By Jaco Visser
Ten years ago, Lancewood Cheese was in financial distress. Last year the company grew its product range with 91 new lines over the past year. Cornel Lodewyks, CEO of the Cape Town-based company, talks about the journey.
Libstar Holdings acquired Lancewood Cheese in 2008. How did the dairy company fit into this new home of varied brands?
LODEWYKS: Lancewood was a strategic fit for Libstar. When Lancewood was acquired, the company was financially distressed. There was a relentless focus on business basics to turn the company around. Innovation contributed considerably to the turnaround of the company with sharp attention to product development and quality, allowing Lancewood to fit into Libstar’s group of varied brands.
How did this turnaround plan pay off for Lancewood?
The Lancewood brand currently holds the number one position in the market in terms of value share of the hard and soft cheese categories in formal retail.
Our objective was to attract more consumers into our categories which range from cheese, yoghurt, spreads, and sauces to cream products, thus improving our product offering mix.
We have a passionate marketing team focusing on how Lancewood can deliver products that consumers want. The brand also has a strong social media presence with our Facebook following in excess of 700 000, allowing us to engage with consumers daily.
People development in the business, one of our greatest assets, was a key enabler to our success. Our focus on point of purchase and visibility of our brand on shop shelves was also crucial to the turnaround.
How does Lancewood decide to develop a new product and which market segments do you target?
Innovation is key for Lancewood and we work closely with Libstar in this regard. We utilise consumer insights, trend reports, as well as sales data directly from grocery outlets, to determine where the opportunities are.
Lancewood’s unique and extensive product offering allows us to effectively target different market segments. We see huge opportunities in growing our brand presence in all households with our yoghurt and cheese range.
The acquisition of Sonnendal saw Lancewood enter the yoghurt market aggressively. Why enter the yoghurt market at all?
The South African market for yoghurt is around R4 billion. The Sonnendal acquisition allowed Lancewood the opportunity to enter the yoghurt category, with their manufacturing ability and know-how. We wanted to create an innovative yoghurt and travelled internationally to gain insight. Soon after launching Lancewood’s own differentiated yoghurt range, we saw double-digit sales growth. There are huge opportunities in single-eating yoghurt in South Africa and abroad.
Lancewood, together with the rest of Libstar’s divisions, are large players in the private-label goods production market. Why is this the case?
The production of private-label goods has seen significant growth worldwide and we decided that Lancewood should be aligned with our customers and their private label strategy. At Lancewood we view the private-label products we produce as our own and ensure they are consistent in quality, ensuring category growth and value for all stakeholders.
Aren’t you afraid that private-label goods will cannibalise on Lancewood’s own brand?
No, because we work closely with our customers who sell private-label products to see how we can grow categories together. Lancewood manages both its own branded products as well as private-label products in a bid to gain new shoppers into specific categories.
How were you involved in Libstar’s “From our home to yours” marketing strategy?
All the executives in Libstar’s divisional companies were part of this and importantly are aligned to the same objectives. You can say that we’re a family of companies working towards the same goal.
Lancewood receives strategic support from Libstar in a way where knowledge is shared. Libstar hosts a lot of knowledge in the fields of marketing, sales, manufacturing and strategy. We couldn’t have achieved the Lancewood success story without Libstar’s support.
Libstar’s philosophy as a holding company is “the head of a corporate but the heart of an entrepreneur” – how does that play out?
The essence of this philosophy is that we have Libstar’s support while we continuously grow and anticipate change in our markets. In a decentralised group such as ours, we are business-minded as individual entities, with a passion to innovate, with the responsibility to generate value for all stakeholders.