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NICHE dairy industry processor a2 Milk needs more supply - The a2 Milk Company

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NICHE dairy industry processor a2 Milk needs more supply

June 29, 2010

By Weekly Times Now

The company’s executive general manager Peter Nathan said a2 Milk was looking to build on its intake of just over 20 million litres.

Up to 15 suppliers across northern Victoria, NSW and southern Queensland supply 20 million litres for white milk sales and an extra “couple” of million litres for yoghurt.

The company also has a licensing agreement with yoghurt brand Jalna.

a2 Milk sources milk from cows with only the a2 beta casein protein gene. Some dairy cows have an a1 gene, while others have a “blend” of both a1 and a2.

Mr Nathan said a2 Milk was ranked the second-fastest growing product group in Australia according to an independent survey released in January.

He said it grew 53.8 per cent last year.

Currently a2 Milk is in the middle of a 10-week advertising campaign in Melbourne from which it hopes to grow sales by 30 per cent.

A year ago, it was launched in Western Australia and during a six-week television campaign sales increased 60 per cent, according to Mr Nathan.

“We need more milk on an ongoing basis,” he said.

Mr Nathan said a2 preferred flat supply milk but was reluctant to speak about farmgate milk prices.

“We can say we do provide a premium … we are very confident farmers are better off … that’s why we have had a great deal of interest,” he said.

In Victoria, a2 Milk is processed at Kyabram through the Mulcahy family’s Southern Processing facility. The Mulcahy family also produces a2 Milk.

Farmers looking to supply a2 Milk must have all their stock DNA tested to determine the percentage of animals which carry solely the a2 beta casein protein. The tests are paid for by a2 Milk.

Conversion time varies from three months to seven years, depending on what percentage of the herd which is already a2 and how aggressively the farmer wants to make the change, Mr Nathan said.

a2 Milk has often been at the centre of industry debate and many have questioned the science and research behind the company’s claims about its products’ health benefits.

Nevertheless, Mr Nathan said a2 Milk’s marketing and communications strategy was about convincing people who claim to have a milk intolerance to switch back to dairy.

He said a lot of a2 Milk’s customers were people who had stopped drinking milk or opted for the soy variety and the fact that a2 Milk had changed these people’s minds was a “positive” for the industry.

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