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A2C preparing to launch a2 milk brand in US

By Mark Astley+

28-Feb-2014

A2C preparing to launch a2 milk brand in US

Speciality milk manufacturer A2 Corporation (A2C) has revealed plans to launch its a2 brand fresh milk in the US.

In its financial report for the six months ended 31 December 2013, New Zealand-based A2C said that with operations in the UK “now established and showing growth from a small base” it plans to turn its attentions to the US.

“The launch of a2 brand milk into the United States market has been under consideration for some time and is to be the next priority growth initiative,” said the company. 

With a "continuing strong performance" in Australia and "momentum building" around its ventures in the UK and the infant formula sector, "the Board considers an entry plan for the USA should now be developed," it added.

“The plan would involve the Company establishing its activities through a wholly-owned USA subsidiary and recruiting a small management team with in-market experience. As part of the development, a2 brand milk will be showcased at a major natural foods exhibition to be held in California in March."

"Fastest growing dairy brand"

a2 milk is rich in A2 beta-casein proteins, but contains no A1 beta-casein protein, which has been linked to digestive discomfort.

Dairy cows typically produce milk containing both proteins, but a2 milk is sourced from specially selected dairy cows that produce milk containing only the A2 protein.

The product has proved popular in Australia, where A2C says it "remains the fastest growing dairy brand" and holds an approximate 8% liquid milk market share in terms of value.

In the hope of building on its success Down Under, A2C entered into a joint venture with Robert Wiseman Dairies, now Muller Wiseman Dairies, in November 2011 to market its a2 brand milk in the UK and Ireland. The product was officially launched in late 2012.

In January 2014, A2C acquired the interest of Muller Wiseman Dairies in the joint venture and entered into a supply and contract pack agreement with the British dairy processor.

This move, according to A2C, has enabled it to build "distribution and sales whilst continuing to leverage the scale and operational capabilities" of Muller Wiseman Dairies.

"The Company is committed to the successful development of what is currently a small but growing UK fresh milk business and is encouraged by the progress of recent initiatives," A2C said.

Priority growth initiative

In the six months ended 31 December 2013, A2C recorded sales of NZ$54m ($45.4m, €32.9m) - a 22% increase on the corresponding period.

Commenting on A2C's first half performance, managing director Geoffrey Babidge said: "the continuing strong performance of the Australian business together with the momentum building around our priority initiatives in the United Kingdom and infant formula were the highlights of the first half."

"Our confidence in the development of the Group over recent times has enabled the Company to advance North America as the next priority growth initiative."

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