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NZ: a2 Milk Company expands into Canada

The a2 Milk Company in New Zealand has entered into an agreement with Canadian Agrifoods Cooperative for the production, distribution, sale and marketing of A2 milk for the Canadian market. The product line will launch this year and will include a range of fresh liquid A2 milk products.

For the expansion into Canada The a2 Milk Company will work with Agrifoods and local Canadian dairy farmers to source milk locally. It will identify cows that naturally produce only the A2 protein type. A2 milk is processed separately.

CEO Geoffrey Babidge of The a2 Milk Company is very pleased with the new partnership with Agrifoods. "This arrangement gives us the ability to leverage the brand development work we have already undertaken in North America and expand into the Canadian market with a well-respected partner," he said.

Photo: René Groeneveld
Photo: René Groeneveld

Agrifoods will now be able to offer A2 milk products to its Canadian customers. "We are very excited," said CEO Maheb Nathoo of Agrifoods Cooperative. "The a2 Milk Company is an innovator in the dairy industry and we are delighted to be partnering with them."

Know-how

The a2 Milk Company will provide Agrifoods with access to its IP and marketing assets as well as its proprietary systems and know-how relating to the sourcing and processing of a2 Milk. Agrifoods will leverage its capabilities in-market to establish distribution across Canada and has primary responsibility for funding this venture.

The expansion is the next international step for The a2 Company after strong growth in the US and China. The revenue of the company increased in the second half year of 2019 with 31,6% to 806.7 million New Zealand dollars. In the US revenue more than doubled, with NZ $28 million (+116%).

In China and other Asian countries the revenue was NZ $317.2 million, up 76.7%. Following a detailed strategic review in 2019, The a2 Milk Company stepped up investment in its China label infant nutrition business considerably in the second half of last year. This has continued broadly in the first months of 2020.

The a2 Milk Company is well-established on the Australian market, where it started out in 2007. Liquid milk sales in Australia were up 11.3% in the second half of 2019 to NZ $74.7 million. Its infant nutrition sales in Australia grew 9.5% delivering NZ $352.0 million in revenue for the half.

Benefits

Conventional cows' milk contains two main types of beta casein protein, A2 protein and A1 protein. The A2 milk is produced from cows selected to naturally produce only the A2 protein type and not A1. According to The a2 Milk Company consumers and healthcare professionals report that certain people who experience challenges drinking conventional cows' milk, may experience benefits when they switch to a2 milk. Research suggests a2 Milk may help avoid stomach discomfort.

The a2 Milk Company was founded in 2000 in New Zealand by Dr Corran McLachlan after scientific research showed that proteins in milk affect people differently. The A2 milk products include a2 Milk Full cream, Light and No fat, a2 Smart Nutrition, Premium a2 Milk powder with Mānuka honey, Pre, during & post pregnancy formula a2 Nutrition for mothers, a2 Skim milk powder and Full cream milk powder.

Agrifoods is a leading provider of innovative quality dairy and food products and services. Agrifoods Cooperative has been in business for over a century and has over 2,700 members. Agrifoods' brands are Organic Meadow, Rolling Meadow, Meadowfresh, Earth’s Own, Happy Planet and Happy Planet.