Lurpak – Turning thought leadership into market

leadership
Matthew Boffey
Source: IPA (UK), IPA Effectiveness Awards 2008
Downloaded from WARC

Lurpak is a classic brand in a familiar, low-interest category. In an effort to drive growth and
reinvigorate consumer interest in the brand, Lurpak aimed to adopt new thinking to communicate its
strengths, and which would also appeal to the interests of its core consumers. The resulting campaign
was based on the main premise that good food is a simple pleasure that is made even better with
Lurpak. The ads were delivered in a confident, discerning style, and championed the food which
Lurpak could be enjoyed with rather than the product itself, in an effort to demonstrate that the brand
shared the passion its target audience had for food. The campaign contributed a 3.76% year-on-year
uplift to the brand's total sales volume, and added an incremental 1.7 million kilos to total volume sales.
It also improved on the short-term return-on-investment from previous campaigns to the extent that,
long-term, every £1 spent on advertising is estimated to return £4.26. Lurpak has also now become the
most valuable brand in its category, and has gained ownership of the idea of being the "champion of
good food".

Agency: Wieden & Kennedy Authors: Matthew Boffey

INTRODUCTION

This is the story of a classic brand in a familiar category, and how new thinking and a new campaign took a
perennial second-best to first place.

This paper proves how Lurpak's new advertising campaign, launched in March 2007, has:

Contributed a 3.76% year-on-year uplift to the brand's total sales volume.

So far contributed an incremental 1.7 million kilos to the brand's total volume sales.

Improved on short-term return-on-investment from previous campaigns to the extent that, long-term, every
£1 spent on advertising is estimated to return £4.26.
 Helped Lurpak overcome its competitors to become the country's most valuable brand in its category.

Made the brand the champion of good food.

Press, Grocer Magazine, 'Number One'

BACKGROUND

At a national level, the butter, spread and margarine (BSM) category is a mature market. Currently, household
penetration stands at 99%, but sales volume is predicted to decline over the next 5 years with consumption set
to decrease1. At a global level, increasingly Westernised diets in China and India have already fuelled the
world's demand for milk and are driving up domestic dairy product prices as a result. This combination of falling
consumption and rising prices makes for an ultra-competitive market, where brands can only win by stealing
share.

Tracing its origins back to the co-operative dairies of turn-of-the-century Denmark, Lurpak was launched in
Britain in 1957. Imported through the country's North Sea ports, the brand established a loyal following amongst
the surrounding area and, although having grown from this heartland, the brand had yet to fully address this
regional bias.

Between March 2004 and March 2005, Lurpak experienced a penetration decline, from 35% to 30%, the
equivalent of 1.3 million households leaving the brand. Despite this the brand was still in growth. Across the
same period the brand increased its 52-week total volume sales by 4%. This growth was driven by its loyal,
older, Northern consumers buying more and more often. These consumers wouldn't be around forever, so
imperative to the brand's long-term sustainability was the need to bring in new, younger, Southern consumers.

Driven by below-the-line activity, from March 2005 to Jan 2007, penetration rose back to its previous high of
35%. However, it began to decline once more as this support ceased. Further, brand measures reveal that
throughout the entire period between 2004 and 2007, Lurpak's levels of awareness and consideration remained
static, and behind those of its rivals. Marketing activity had maintained the business, but had failed to build the
brand.
All this highlighted a need to strengthen the Lurpak brand. In order to boost its appeal and drive demand,
especially in the South2 and amongst the young, it needed greater emotional significance and meaning.

BUSINESS & MARKETING OBJECTIVES

At the beginning of 2007, the business objective for Lurpak was to become a £187 million brand by the end of
the calendar year.

To fulfil this objective, marketing and communications had to strengthen the brand and boost its appeal enough
to:

Drive Lurpak's penetration to 36.5%.

Drive Lurpak's share of total BSM volume in the South to 8.8%.

Drive Lurpak's share of total BSM volume from under-45s to 8.3%.

IDENTIFYING THE OPPORTUNITY

Research revealed that the BSM category, its brands and products as well as its consumers, could be mapped
against three key qualities and drivers: taste, health and convenience. Lurpak was all about taste, with an
opportunity for growth amongst those consumers with an active interest in food – who made up just under 70%
of the UK adult population3.

These consumers perceived Lurpak to have a breadth of latent positive attributes and associations. The most
immediate qualities of its premium price and iconic silver packaging helped the brand and its users appear
discerning and sophisticated.

Digging deeper, at a product level, Lurpak had a distinct flavour profile, described as being “subtle, creamy and
pure.” Its status as a lactic butter – pale in colour and subtle in taste – encouraged these consumers to believe
that it enhanced the flavour of food in a way inimitable by its competitors.

Deeper still, at a brand level, Lurpak had a powerful culinary prestige. Low water content makes it ideal for
baking and cooking, in turn making it a firm favourite in the fridges of many professional chefs – Jamie Oliver
had even used it in the TV series The Naked Chef. All this gave Lurpak a premium status, and a sense of
authority and influence upon the right and wrong way to do things in the kitchen.

The opportunity for the brand was to use consumers' positive perceptions of Lurpak and their active interest in
food as the basis for a new advertising campaign that would strengthen the brand and boost its appeal.

THE ADVERTISING STRATEGY

The strategy, born from brand strengths and consumer interests, was to offer consumers a series of opinions
about food, each communicating that good food should be a simple pleasure made even better with Lurpak. And
to deliver these opinions with a confident, discerning and sophisticated style and tone true to the cues
surrounding the brand. In championing the qualities of the food that Lurpak's enjoyed with, rather than the
product qualities of Lurpak itself, the brand would better reflect and share their target's enthusiasm, interest and
passion for food.

This went against the dominant advertising conventions in the category. Most competitor ads talked about
product qualities like spreadability or fat content, or featured scenes of twee domesticity or even twee-er farmers
and their cows. No brand talked directly about the food with which they're used. Given this landscape, if Lurpak
talked about food, its communications would be much more broad and much more interesting to its audience –
making the brand far more appealing to boot. Doing this would show real confidence, and demonstrate the
attitude and behaviour of a leader, and help make Lurpak the champion of good food.

The subsequent success of the decision to champion the qualities of the food with which Lurpak's enjoyed,
rather than the product qualities of Lurpak itself, offers a clear lesson for other advertisers in similarly well-
established categories:

Moving beyond traditional product-based point-of-difference advertising in favour of communicating the brand's
point-of-view on the world to which it belongs, is a significant shift in emphasis. It's a move from the micro to the
macro, from the narrow to the broad, from the inward-looking to the outward-facing. And it's often a move from
an area of low consumer interest to an area of high consumer interest. To make such a move before the brand's
competitors demonstrates thought leadership which, if undertaken correctly, can translate into market
leadership.

THE COMMUNICATIONS OBJECTIVE

Make Lurpak the champion of good food.

Media Plan

Creative Work

'Bread' TV spot

We see flour, water and yeast.

We see the magic as bread rises.

We see the bread being kneaded.

We see the bread gradually change colour whilst baking.

We then see a chunk of bread being torn from the loaf.

A generous knob of Lurpak Spreadable is taken from the pack and applied to a hunk of gorgeous bread.

We're in bread heaven.

VO: Bread.
In the hands of those skilled craftsmen we call bakers, it tastes like life itself.
Freshly baked its powerful stuff.
Just the smell alone can sell a house.
Good bread deserves respect.
Give it Lurpak.
A wise man once said 'man shall not live by bread alone'.
But we can give it a damn good try.

Cut to a big bold Lurpak Spreadable packshot.

Legal super: Butter and Vegetable oil blended

SUPER: Good Food Deserves Lurpak

Insearchofgoodfood.co.uk

'Potato' TV spot

We see earth. Lots of it. Rich soil. Almost edible. A dark opening. We can hardly make anything out. Except rich
dark earth. We are under ground. We become aware of a dark mass as it gets pulled from above. It's a potato.

The potato is brought to the surface by hand. As it gets closer to the surface more and more light falls onto it.
We see the potato rise up, earth cascading down as it does. The hand brushes off the mud.

VO: The potato.

We haven't been growing it for 6000 years,

Just to zap it in a microwave for its last 12 minutes 40 seconds.

Baked potato. The clue is in the name.

Show it some respect

We see a close up of a running tap and the potato being washed.

Time lapse of the potato in an oven. From raw to crispy and cooked in a couple of seconds. The cross on potato
splits like a flower. Shot from above.

Give it an oven. Give it an hour.

Lurpak foil unwraps. Then we see the Lurpak being spread onto the potato.

Give it Lurpak.

Some buttered potato is hot on the fork. Too hot to eat. The eater can't put it in his mouth. He blows on it.

Have patience food friends.

And a slice of bread and butter if you can't wait.

SUPER: Good Food Deserves Lurpak.

Insearchofgoodfood.co.uk

'Mushroom' TV spot

We open on a forest floor. A magical place. In time lapse we see mushrooms of all shapes and sizes start to
grow. We are close to the floor so we can see these amazing structures in detail. They are as big as trees.

VO: The mighty shroom.

Not a vegetable. A fungus.
Underrated, underused, under trees, mushrooms are a meaty mouthful.
(The porcini can take on the lamb chop single handed.)

The last mushroom billows up. It towers above us. It is felled by a huge steel blade.

Mushrooms deserve respect.

So give them Lurpak.

We're in the kitchen now. The same knife cuts a generous knob of Lurpak from the silver pack. In a frying pan
the Lurpak foams, mushrooms soaking it all up.

And to the person who first discovered fungus was edible...

A hot buttered mushroom is put onto a fork. There is a small pause before the mushrooms it is gobbled up.

We salute you brave food warrior

Cut to a block of Lurpak.

SUPER: Good Food Deserves Lurpak

Insearchofgoodfood.co.uk

'Lighter' TV spot

This isn't typical food ad. It isn't airbrushed, slow-mo perfection. Open on a shot of loads of fresh ingredients on
a work surface. We see ingredients crushed, squeezed, ripped up, smashed to a pulp, hands are stained,
fingers licked and so on. What begins with pristine surfaces ends in a beautiful mess.

VO: Healthy eating

What's with all the fads?
Low carb no carb.
Who gives a monkey's?
Forget G.I....try D.I.Y.
Fresh fruit, lean meats, veg.
Fish with scales not breadcrumbs.
No fuss.
Just give it a season.
Maybe a little Lurpak lighter.
Relax waist watchers
Let's think about dessert

Super: 'Reduced fat Lurpak spreadable. Butter and vegetable oil blended'

We then see a shot of a guy in a kitchen emptying the water from a saucepan into the sink, he then licks his
fingers. Cut back to the work surface and the debris from preparing the meal and a skin from an onion floats
down onto the surface.

We cut to a Lurpak Lighter Spreadable packshot.

SUPER: Good Food Deserves Lurpak

Insearchofgoodfood.co.uk
PRE-TESTING

Prior to its launch the campaign went into Millward Brown's pre-test, the Link test. It received a positive
response, suggesting that the campaign would drive re-engagement and re-appraisal. Importantly, testing
indicated that the campaign had the potential to build the brand's appeal through its quality and culinary
credentials.

I've never tried Lurpak before but watching these adverts made me want to give it a go and see how it
tastes, and how different it is from my current brand.

I thought Lurpak was a boring average brand that was the same as everything else. These ads helped to
create a younger fresher image.

Lurpak is a quality butter. Although I tend to buy cheaper brands, the advert reminded me that Lurpak is
the best butter and worth a little extra money.

They made me hungry! They were basic and just played on the quality of the product without gimmicks.

I'd thought of them as good brand but I'd not associated them with passion for real food.

They made you want to cook and eat good food.

That it is superior to other brands – it's the best!4

 How did the campaign change your feelings about the brand?

How has the campaign made you feel positive?

SOFT MEASURES

In strengthening the brand and boosting its appeal, tracking reveals that the advertising helped raise two initial
key measures: awareness and consideration. It managed to put Lurpak back on people's radar and get them
feeling positive and thinking about buying it. In line with this, claimed purchase also increased.

According to Millward Brown, in a well established category dominated by long standing and well known brands
such as the BSM market, these measures are difficult to improve, especially in the short-term. The following
data comes from tracking measures running from Jan 2005 to March 2008.

Awareness: 1st Mention

Lurpak Awareness: Any Mention

Lurpak Consideration: First Choice / Seriously Consider

Lurpak Purchase: Buy Now

Examining the difference in perceptions between those who were aware of Lurpak's activity, compared to those
who weren't aware of anything, further reveals advertising's effect. Not only was consideration higher amongst
those who were aware of the activity, so were positive perceptions of Lurpak's products, even though they
weren't made explicit in the advertising: its quality, as well as its distinctive and superior taste. The following
data comes from tracking measures taken since the launch of the new campaign.
Lurpak Consideration: First Choice / Seriously Consider

Lurpak is Better Quality

Lurpak has a Distinctive Taste

Lurpak is the Best Tasting

Key perceptions justifying the brand's premium status; its role as the champion of good food; its youthful appeal;
as well as plain old love, were also higher amongst those who were aware of the campaign than those who
weren't.

Lurpak is Worth Paying More For

Lurpak Enhances the Flavour Of Food

Lurpak is Modern
I Love Lurpak

The new campaign also boosted visitors to Lurpak's website.

Lurpak Website Visitors Per Month

Nicer still were the emails that consumers spontaneously wrote to Lurpak praising the advertising.

I thought your 'leftovers' ad was brilliant. It downplays the brand in comparison to other foods but doesn't
belittle it and it makes you think that it's worth getting decent butter to dress up decent food ... My favourite
ad of all is the ready meal one. Brilliant. It does remind you how some dishes don't need to be complicated
and that if you're going to spend some cash on some decent fish you ought to spend a few more pence on
the butter (Source: Arla Foods Consumer Relations)

Good, eh?

HARD MEASURES

For all the following measures, when calculating change, we've removed any seasonal effect by calculating
year-on-year changes for each month, and then taking averages over the entire period before and after the
launch of the new campaign. And we've used all the available data to do this. When examining penetration,
we've looked right back to Jan 2004.

When examining volume and value sales, the pre-launch period stretches from Jan 2005 to March 2007, and the
post-launch period stretches from March 2007 to Feb 2008. As you'll be able to see, all measures have
improved since the launch of the campaign, and the brand has well outperformed the category.

PENETRATION

The launch of the new campaign coincided with an increase in the brand's penetration, and accelerated
penetration growth.

Total Brand Penetration 2004 to 2008

Lurpak Total Brand Penetration Change

VOLUME SALES AND SHARE

Lurpak's volume sales growth rates increased with the launch of the new campaign, and the brand outperformed
the category.

Volume Sales Change: Lurpak Total Brand & BSM Category (Excluding Lurpak)

The new campaign accelerated the brand's growth in volume market share.
Lurpak Total Brand Volume Share Change

The brand also increased its year-on-year absolute volume share.

Lurpak Total Brand Volume Share

VALUE SALES AND SHARE

Lurpak's value sales growth rates increased with the launch of the new campaign, and the brand outperformed
the category.

Value Sales Change: Lurpak Total Brand & BSM Category (Excluding Lurpak)

The new campaign accelerated the brand's growth in value market share.
Lurpak Total Brand Value Share Change

The brand also increased its year-on-year absolute value share.

Lurpak Total Brand Value Share

THE IMPORTANCE OF LURPAK CLASSIC

Lurpak Classic, the traditional block butter, had been in decline for decades. As all of Lurpak's quality and
culinary credentials stem from this iconic product, it was vital to the success of the whole brand and the
effectiveness of the campaign to reverse its fortunes. Think of it as Lurpak's 501s. Given this, Lurpak Classic
became the hero product in the majority of the advertising, and the campaign's effect turned Lurpak Classic's
decline into growth.

Lurpak Classic 52-Week Rolling Volume Sales Total

Lurpak Classic Volume Sales Change

THE CAMPAIGN'S EFFECT ON ITS TARGET

In keeping with the advertising strategy, the brand increased its volume coming from those consumers with an
active interest in food.

Total Brand Volume From Consumers With An Active Interest In Food

THE CAMPAIGN'S EFFECT: FULFILLING ITS BUSINESS AND MARKETING OBJECTIVES

More importantly, in keeping with its business and marketing objectives, by the end of 2007 Lurpak increased its
value by driving its penetration; its share of total BSM volume in the South and from under-45s; and in the
process exceeded the targets set for it at the beginning of the year.

Lurpak's Sales Value

Lurpak's Penetration

Lurpak's Share of BSM Volume in the South

Lurpak's Share of BSM Volume from Under-45s

RULING OUT OTHER VARIABLES: DISTRIBUTION, PRICE, OTHER ACTIVITY

To help prove that such success is the result of the brand's new campaign, it's necessary to rule out those other
variables that may account for any sales and market share increase.

Changes in Distribution

Total brand distribution could not account for the increase in Lurpak sales because it stayed high and,
importantly, steady throughout the new campaign.
Lurpak Total Brand Average Distributor

Changes in Price

The brand didn't 'buy' market share by cutting price, quite the reverse: over the course of the new campaign,
Lurpak – an already premium brand – increased its price by an average of 23% per kilo, making it on average
93% more expensive than the category average.

Average Price

As it's reasonable to expect, econometric modelling shows that price rises normally reduce the sales of BSM.
But in this instance, Lurpak's price increases were accompanied by increases in volume sales, indicative of the
brand's low price elasticity.

The new advertising campaign helped reduce the brand's price elasticity to an average of - 0.22, and compares
favourably to another BSM brand with a similar portfolio and an elasticity of - 0.30 from Billets' database. Such
low base price elasticity is a clear indicator of the brand being made stronger by the new campaign.

It's an amazing achievement to have increased the brand's volume and price premium at the same time.
Communications helped sell more Lurpak for a higher price.

OTHER ACTIVITY

National below-the-line, door-drop activity did occur in April 2007 at the launch of the campaign to help drive
penetration. However, econometric modelling can isolate and quantify the contribution from advertising alone.

More interestingly, activity of similar national scale occurred in Jul and Aug 2006, without any advertising
support. In 2006, door-drop activity on its own helped increase total brand penetration by 1 percentage point
from 33% to 34%. In 2007, door-drop activity supported by the new campaign helped increase total brand
penetration by 3 percentage points from 35% to 38%.
Looking at the difference in effect between the two bursts of activity, door-drops had greater effect when
supported by the new campaign, as the new campaign had already begun to enhance base perceptions of the
brand.

Total Brand Penetration from 2004 to 2008

PAYBACK

Billets' modelling proves that advertising alone delivered a 3.76% year-on-year uplift to the brand's total sales
volume, and has so far contributed an incremental 1.7 million kilos to the brand's total volume sales.

Advertising's Contribution to Lurpak's Volume Sales

Billets modelling also proves a short-term return-on-investment of £0.76 –judged against their entire database,
one of the highest ever short-term returns they've modelled, and a dramatic improvement on the returns from
previous campaigns.

Short-Term RoI

Data2Decisions' meta-analysis of all econometric models, reveals the average short-term return-on-investment
from advertising to be around £0.50. Brand campaigns like Lurpak's rarely pay back in the short-term, with the
real benefits of strengthening the brand accruing to the business in the long-term.

Recognising this, econometricians have proposed a variety of short-term to long-term ratios to calculate
advertising's long-term effect. According to the Data2Decisions database, the average of these ratios is 4.6,
allowing the short-term return to be scaled up to estimate its true long-term effect. Given Lurpak's campaign is
relatively new, with less than 12-months worth of data, this calculation can be used to estimate the long-term
payback of the new campaign.

Long-term return = (short-term) + (4.6)(short-term)

£4.26 = (£0.76) + (4.6)(£0.76)

Every £1 spent on the new campaign is estimated to return £4.26.

Demonstrably, the new campaign will pay for itself and far more besides.

According to Billets, the short-term return-on-investment from TV was particularly strong at £1.09. Whilst press
and posters weren't as profitable, these channels contributed to strengthening the brand in a way TV on its own
could not. Pre-testing shows that brand appeal is heightened with full exposure to the campaign, rather than TV
alone. This further adds to the case of taking a long-term view of brand strength accruing to the business.

Lurpak is Much More Appealing

CONCLUSION

The new campaign has strengthened the brand and made it more appealing. It has:

Contributed a 3.76% year-on-year uplift to the brand's total sales volume.

So far contributed an incremental 1.7 million kilos to the brand's total volume sales.

Improved on short-term return-on-investment from previous campaigns to the extent that, long-term, every
£1 spent on advertising is estimated to return £4.26.

Helped Lurpak overcome its key competitor, Flora, to become the country's most valuable brand in its
category.

Made the brand the champion of good food.

Lurpak vs. Flora 52-Week Total Value Sales

The brand has met both its business and its marketing objectives. By the end of 2007 the new campaign had:

Driven sales value to £196 million, £9 million beyond its target of £187 million.

Driven penetration to 37.8%, 1.3 percentage points beyond its target of 36.5%.

Driven its share of BSM volume in the South to 8.9% and its share of BSM volume from under-45s to 8.6%,
both of which are beyond the brand's targets.

Given that this new campaign is barely a year old, with such notable success already, the brand can only move
from strength to strength. With the help of such advertising, the champion of good food shall remain undefeated
for many years to come.

ENDNOTES

1. Arla Foods Category Projections, November 2005.

2. The South is made up of the following TV regions: Anglia, London, Midlands, Southern, South West and
Wales.

3. Source: Arla Foods Strategic Communication Quantative Study, November 2005.

4. Source: MB Link Test, Base: All Adults ('How does the ad make you feel differently about Lurpak?'
'Thinking about all the ads together what, if anything, do you like about the ads?')

/LI>
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