At the back of an industry crisis, when consumers reportedly turned away from cheap supermarket milk to more expensive labelled brands, hoping to help struggling farmers, dairy processor, Lion, has posted an unexpected 19 per cent jump in sales. It has also launched a new campaign Milk loves you back”, to encourage Australians to drink more milk – certainly a clear signal to the rest of the industry that it looks to take its products further.
Managing director of Lion Dairy and Drinks, Peter West said the company’s key fresh milk brands of Pura, Dairy Farmers and Masters had indirectly benefited from the 2016 dairy crisis. He was quoted by The Australian as saying profits jumped considerably, with consumers doing an about turn to discounted milk recently.
The report also states that Lion has also “quietly increased” the amount of milk processed annually from 750 million litres to almost a billion litres, thus gaining market share and taking on more contracted dairy farmers.
Lion is now market leader in flavoured milk sales, through its Dare brand; in yoghurt with Yoplait and Farmers Union brands; and in speciality cheeses with Tasmanian Heritage and King Island brands.
Nationally, Lion has become the biggest fresh milk retailer, outside the supermarkets’ $1 per litre private label brands.
With 400 farmers now supplying Lion in Tasmania, Queensland, NSW, Victoria, Tasmania and Western Australia, Mr West said its fresh milk, yoghurt and speciality cheese sales were all attracting more consumers.
Lion also has farmers waiting to become suppliers, a consequence of the company’s farmgate milk pricing.
A big difference with Lion’s dairy business is that 95 per cent of products are sold in the Australian domestic market.
It was also reported that Mr West said Lion was now advancing into Asian markets, particularly with Farmers Union Greek yoghurt, a big hit in Singapore.