Extolla
Driving Supply Chain Progress in NZ’s Beverage Industry
A product’s journey from source to supermarket shelf is always susceptible to economic headwinds and ongoing supply chain volatility.
This is certainly the case in the current economic environment and, as a result, the beverage industry in NZ must become bolder in how it redesigns its supply chains.
That is the advice being shared by leading thinkers at Extolla – a NZ and Australian Supply Chain and Solutions Consulting company (and NZ Beverage Council member).
Extolla Chief Commercial Officer, David Harrison, says the ability to adapt - quickly and collaboratively – to optimise supply chains will be the hallmark of leading brands.
“At Extolla, we’re proud to play a role in shaping that future. By combining deep industry knowledge with hands-on implementation and operational support, we continue to help businesses unlock measurable value across their networks.
“Whether it’s through cost reduction, operational efficiency, or improved sustainability, the opportunity for supply chain evolution in the beverage sector has never been clearer,” she says.
David has prepared the following piece that provides lessons from a leading collaboration Extolla has recently been involved in. That “standout” collaboration, with Lion, holds valuable lessons for the New Zealand market.
By David Harrison, Chief Commercial Officer, Extolla
The beverage industry in New Zealand, like many across the globe, is grappling with increasing pressure to optimise its supply chains. From mounting distribution costs to the demand for omnichannel service and the rising importance of sustainability, every aspect of the beverage supply chain is under scrutiny. Yet, in these pressures lie opportunities for innovation, efficiency, and collaboration.
At Extolla, we’ve seen first-hand the impact a focused, agile supply chain strategy can have on the beverage industry. One of our standout projects involved partnering with Lion, a leading beverage manufacturer in Australia, to overhaul how their products were distributed to a major supermarket liquor retail network.
The story of this collaboration is one that reflects broader lessons for the industry in New Zealand.
The Challenge: An Outdated Model
Traditionally, Lion’s product deliveries followed a Direct-to-Store model. While this may seem straightforward, it was anything but. The approach created inefficiencies at nearly every point in the chain: delivery frequency was high, store staff were burdened with stock management, and there was limited visibility or control over inventory. These inefficiencies were amplified when demand spiked or when service levels needed to flex for both online deliveries and in store retailing.
Lion recognised that while they had a strong product and brand presence, their logistical model needed modernisation. They wanted to simplify operations, reduce their Cost-to-Serve, and enhance the reliability and transparency of their supply chain—all while supporting the retailer’s push for better customer experience in-store and online.
The Shift: Moving to Regional Supply Distribution
Working closely with Lion, Extolla led the transition from Direct Store Delivery (DSD) to a Regional Supply Distribution (RSD) model.
This was not a small change. It required integrating Lion’s stock into the liquor retailer’s national distribution centre (DC) network, redefining roles across suppliers and logistics partners, and aligning both commercial and operational teams under a new cost-sharing model. At the heart of this shift was our “Value Creation” commercial construct - an approach that incentivised both Lion and the retailer to collaborate toward shared outcomes. By moving from separate, siloed operations to a centralised, jointly optimised model, the supply chain became more cohesive, resilient, and scalable.
Key Enablers: Collaboration and Technology
One of the most critical factors for success was cross-functional collaboration.
Extolla acted as an independent programme lead, bridging Lion’s planning, replenishment, and logistics functions with the retailer’s supply chain and store operations teams. Our role was not just operational but strategic: we kept both parties aligned to agreed outcomes, facilitated clear decision-making, and ensured that risks were managed proactively.
Another vital pillar was technology. We oversaw the implementation of an Electronic Data Interchange (EDI) system that enabled real-time data sharing across the supply chain. This provided clearer insights into stock movements, improved forecasting accuracy, and reduced the lag in order processing. In short, the EDI implementation brought visibility and accountability—two essentials in any high-performing supply chain.
Tangible Benefits: The results were both immediate and enduring.
• Inventory control improved significantly, with stock levels optimised and expiry dates better managed. This reduced lost sales and increased availability of key SKUs for both parties.
• Lion saw a material reduction in their Cost-to-Serve, sharing these efficiencies with the retailer through the agreed value-sharing model.
• Delivery accuracy and timeliness improved, ensuring that products were available when and where they were needed, supporting both store and online sales.
• Carbon emissions were cut through reduced truck movements, helping Lion and the retailer progress toward their sustainability goals.
What’s perhaps most noteworthy is that this project was delivered ahead of schedule. In just 11 weeks, we had planned, negotiated, built inventory buffers, and implemented the new model nationally. That speed—and the success that followed—was made possible by the trust and accountability that developed between the partners.
What This Means for NZ Beverage Supply Chains
This collaboration holds valuable lessons for the New Zealand market. As beverage companies face increasing pressure to meet customer expectations, reduce costs, and address environmental concerns, partnerships and shared accountability will become key enablers of progress. Retailers and suppliers need to move beyond transactional relationships. True progress comes from recognising where interests overlap and co-investing in smarter ways of working.
In our experience, having an independent supply chain partner like Extolla can help create the clarity and cohesion needed to execute at speed and with confidence.
(May 2025 Supermarket News)
