a2 Milk Company moves into Walmart as global revenue jumps 68%

By Beth Newhart

- Last updated on GMT

a2 Milk is already sold at select Whole Foods, Target, Publix, Wegmans and Stop & Shop locations.
a2 Milk is already sold at select Whole Foods, Target, Publix, Wegmans and Stop & Shop locations.

Related tags Milk Infant formula New zealand

Australia-based a2 Milk Company (a2MC) entered the US market in 2015 and now makes its Walmart debut this summer. The company reported major growth over its last fiscal year with a 68% increase in total revenue.

a2MC sells a line of milk products that are reportedly more easily digestible than traditional dairy because they only contain the A2 protein. Most milk contains A1 and A2 which has been linked to more difficult digestion. According to a2 Milk, More than 75 million Americans alone suffer from some level of dairy intolerance.

The company was founded in New Zealand in 2000 and is now headquartered in Australia. It’s also sold in China, the UK and entered the US market in 2015.

Doubling US sales

a2MC announced Wednesday that it made its Walmart debut at stores in New York, Pennsylvania, Florida, Texas, Maryland and Washington DC this July. It has already been sold at more than 6,000 other US retail locations since 2015, including Whole Foods, Target, Publix, Wegmans and Stop & Shop.

Blake Waltrip, US CEO of a2MC, said, “Achieving distribution with such a powerful and respected retailer like Walmart further validates the a2 Milk brand proposition in the US and marks a critical point in our company’s drive to bring consumers back to dairy.”

“The a2 Milk proposition is unique in the dairy industry, and we are looking forward to continuing to spread awareness of the benefits of A1 protein-free milk with the first-to-market brand, a2 Milk.”

US sales more than doubled in the 2018 fiscal year, and the company plans to invest around $22m in the US market for the 2019 fiscal year in order to sustain its growth.

The US line of a2 Milk is sold in whole, 2% reduced fat, 1% low fat and 2% chocolate reduced fat varieties.

Baby formula success

a2 Milk is the leading premium milk brand in Australia with about 10% of the total supermarket milk category. It’s also become the Australian market leader in infant formula with a 32% share.

Its Chinese presence has similarly been successful in the infant formula category, with a 5.1% value share and availability at 10,000 Chinese retail locations.

a2MC’s strategic approach to increase retail locations resulted in a successful showing in fiscal year 2018. The company invested NZ$73.6m (US$49.3m) in marketing to improve the US and China markets, a 75% increase in the previous year’s budget.

But it paid off, collecting a total revenue of NZ$922.7m (US$618.2m), up 68% from the prior corresponding period.

Australia and New Zealand lead the pack with NZ$656.6m (US$439.5m) in sales, China and Asia had NZ$233.6m (US$156.3m) and the US and UK with NZ$32.4m (US$21.7m). a2 Milk cited Asia’s growing middle class as one of the reasons for its success in China.

The company’s total infant nutrition sales skyrocketed by 83.8% in the last year, and accounted for NZ$724.2m (US$485m), or 78% of the company’s total revenue. Liquid milk sales hit NZ$142.4m (US$95.3m).

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