Dairy farmers expect to feel the pain of Murray Goulburn cut to milk price

Dairy farmers say they may have no choice but to leave the industry following Murray Goulburn’s decision to cut the price it pays them for milk.

Murray Goulburn’s decision came on Wednesday as the dairy co-operative cut its estimate of net profit after tax to between $39 million and $42 million and its chief executive Gary Helou resigned.

As the ABC reports, Victorian framer Andrew Leahy was not expecting the price cut and does not believe all in the industry will be able to handle it.

“It’s just unprecedented. The main impact will be people just won’t be able to afford to do it and probably start selling cows, and there will be some more dairy farm businesses shaken out of the system,” Leahy told the ABC.

“I think we’ll lose a lot of the northern Victorian dairy farmers.

“We’ll have to really really tighten our belts and we’ll have to do it even again. I don’t know how tight you can go. The future of our family farm is in jeopardy.”

According to the SMH, Units in Murray Goulburn’s ASX-listed trust dropped 42 per cent to $1.24 following Wednesday’s news.

There could be more bad news ahead for the co-operative. As the Australian reports, the dramatic drop in profit estimate may be looked at by the corporate regulator.

Originally, in its prospectus, Murray Goulburn had forecast a profit of $89 million. Then in February it lowered that figure to $63 million. And now the figure stands at $39 million and $42 million.

While the Australian Securities & Investments Commission (ASIC) has not yet investigated this large drop, it well may do so in the near future.

Murray Goulburn chairman Philip Tracy claimed no investigation is necessary.

“Ultimately we reflect on the processes. There was nothing we could have done any quicker,’’ Tracy told The Australian. “With everything we had in front of us we were comfortable with the forecast we made at that time in the prospectus.’’

Murray Goulburn boss quits after profit downgrade

Dairy processor Murray Goulburn managing director Gary Helou is stepping down following the co-operative’s decision to cut both its profit forecast and the price it pays framers for milk.

The co-operative said in a statement that it now estimates a net profit after tax of between $39 million and $42 million. Originally, in its prospectus, Murray Goulburn had forecast a profit of $89 million. Then in February it lowered that figure to $63 million.

It will now borrow as much as $165 million to maintain milk prices paid to suppliers.

MG’s performance has been affected by a jump in the Australian dollar as well as China’s decision to cut spending on bulk dairy products and Russian trade sanctions on western produce.

MG chairman Philip Tracy said history would judge Helou as a “visionary leader”.

“Gary has made a significant contribution to MG and has been a powerful driving force behind our transition to become a globally recognised, ASX-listed food business. We thank Gary for his passion, drive and leadership during what has been an important transformation period for MG,” he said.

Helou will step down as managing director but remain to assist with the transition to an interim Chief Executive Officer while a search for a successor is undertaken. He will also cease to be a director of MG Responsible Entity Limited, the responsible entity of the MG Unit Trust.

Mövenpick expands range with Blueberry Cheesecake flavour

Swiss ice cream brand Mövenpick has launched a new Blueberry Cheesecake flavour into the foodservice category.

Mövenpick Blueberry Cheesecake is a delicious interpretation of the original dessert with a curd ice cream enriched with an intense blueberry ripple and chunky biscuit pieces.

The new flavour is available in 2 x 2.4L cartons and joins the brand’s 24-strong range of ice creams and sorbets purchasable for wholesalers nationwide from Mövenpick distributor, RoyalCDS.

Created by chefs for chefs, the Mövenpick Maîtres Glaciers have crafted their own ice cream version of an iconic dessert made with naturally sourced ingredients with no artificial additives or colours including delicious seasonal blueberries.

Mövenpick ice cream is made so each scoop is consistent in taste thanks to evenly distributed ripples, sauces and pieces, and its low melting point means it will always stand strong on the plate.

The new flavour is available in 2 x 2.4L cartons and joins the brand’s 24-strong range of ice creams and sorbets purchasable for wholesalers nationwide from Mövenpick distributor, RoyalCDS.

Busy weekends offer opportunities for premium breakfast products

As the fast-paced nature of twenty-first century life continues to change breakfast from an enjoyable pastime to a chore, consumers are increasingly seeking out convenience foods in the morning. While an established trend during the week, it is increasingly creeping into weekend habits.

According to a Canadean survey of packaging executives worldwide, 77% expect high or moderate demand for on-the-go grocery products during weekday mornings, while 63% forecast high or moderate demand during weekend mornings. While the high demand during weekday mornings is to be expected, this study shows that the industry is preparing to take advantage of a surprising opportunity: convenience breakfasts for those who are time-poor at weekends.

As a result, Canadean said it expects more innovative pack formats to be developed for breakfast drinks and smoothies, including dual packs separating liquid and solid contents, and heat-retaining packs to keep indulgent breakfasts warm while on the go.

“Brands built around convenience should consider brand extensions targeting weekend needs, while those built around enjoyment and indulgence should consider diversifying their product portfolios to offer new, more convenient products that still provide something special for weekend consumers,”

Safwan Kotwal, Analyst at Canadean, says: “Focusing purely on weekday breakfast convenience means brands risk leaving money on the table. While consumers’ timetables are arguably more flexible during the weekend, busier social lives are creating a new market for convenient, but at the same time indulgent, weekend breakfast products.

“Convenience purely targeted at busy office workers or busy parents on the school run means brands could be excluding themselves from a potentially very profitable weekend market.”

While convenience is an important consideration for many consumers, indulging and enjoying breakfast on the weekend is something they look forward to. Although high demand on weekday mornings will remain the most important occasion for convenience products, Canadean said it believes brands must not discount weekends as an opportunity.

“Brands built around convenience should consider brand extensions targeting weekend needs, while those built around enjoyment and indulgence should consider diversifying their product portfolios to offer new, more convenient products that still provide something special for weekend consumers,” Kotwal concluded.

Bulla brings Fairy Bread to its Dairy Foods range

Bulla Dairy Foods has built on the success of their Lamington and Coconut Ice range with the introduction of three new flavour stick ice cream combinations.

The newest ice cream range, including Fairy Bread, Cookies & Cream and Cookie Crumble, aims to provide consumers with fresh milk and cream that they love.

According to Bulla Dairy Foods General Manager Nick Hickford, Bulla is committed to tradition and innovation.

“There is nothing more iconic for Australians than fairy bread. By reinventing this family classic and bringing it to life in a fun frozen format, we’re confident that we’ll be keeping this much loved treat alive for many more generations to come,” Hickford says.

Fairy Bread features vanilla-flavoured ice cream dipped in a white choc coating and covered in colourful sprinkles. Cookies & Cream includes cookie-flavoured ice cream dipped in a white choc coating and covered with chocolate cookie pieces.

Bulla’s new range comes in packs of six and is available in most supermarkets.

Frosty Boy signals intention to expand into Asia

FROSTY Boy Australia is determined to become the world’s preferred dessert and beverage base
manufacturer, with the Asia-Pacific market key to success.

In seeking new business prospects, the company is set to attend two of the region’s largest food and beverage expos, HOTELEX in Shanghai and Food&HotelAsia 2016 in Singapore.

According to Frosty Boy CEO Dirk Pretorius, the company manufactures the equivalent of two million serves of soft serve ice cream daily, with export making up 75 per cent of business.

“We have already had great sucess in the Asia-Pacific region, with a great deal of our product being exported there, but there is still so much room for growth,” Pretorius said.

Frosty Boy had recently been placed in high esteem to the rest of the world when its partnerships with Asian companies took place under Australia’s improved trade agreements.

“Brand Australia in particular has contributed towards the company’s growth and is strongly
recognised in international markets, particularly in China. Good quality Australian products, such as
our beverage, frozen yoghurt and soft serve bases are in constant high demand,” he said.

Fonterra doubles first half profit

Fonterra, the world’s largest dairy exporter, has more than doubled its net profit despite the global fall in milk prices.

As the Business Spectator reports, the Auckland-based dairy cooperative increased net profit for the six months to January 31 to $NZ409 million ($537 million). This a 123.5 per cent increase compared to the corresponding period last year.

Other positives included a 27 per cent gain in first-half normalised earnings before interest and tax for ingredients to $NZ617 million; and a 108 per cent increase in Ebit for higher-value consumer and food service products.

Fonterra chairman John Wilson noted that the state of the global market had negatively affected farmers’ incomes. In response, he said, Fonterra had focussed on higher value and more profitable products.

“The low prices have placed a great deal of pressure on incomes, farm budgets and our farming families,” Wilson said in a statement.

“Our priority is to generate more value out of our farmers’ milk by focusing on the areas within our control.”

“We aim to efficiently convert as much milk as possible into the highest returning products.”

As the SMH reports, the company described the performance of its Australian ingredients business as “still not satisfactory”, after its gross margin dropped by 25 per cent to $NZ9 million.

The company said the European Union’s dairy industry should revert to 1 per cent annual growth through 2016 and this should help increase the global price of whole milk powder.

Murray Goulburn axes 54 jobs

Dairy processor, Murray Goulburn announced to staff yesterday that it will be cutting 54 positions from its Victorian operations.

The company’s Leongatha facility was hit the hardest with a loss of 23 jobs, while Kiewa lost 13, Maffra 11, Cobram four and Rochester three, The Weekly Times reports.

A spokesperson for Murray Goulburn said that the company was focusing on its primary goal of delivering a sustainable increase to its farmgate milk price, and that operational efficiencies are constantly under review.

“We continually review our operations to improve efficiency, productivity and global competitiveness, including investing in new technologies, redesigning workflow and work patterns, improving line efficiencies and cross-skilling,” she said.

The spokesperson said that MG will consider a range of options for employees including redundancy, potential redeployment and current vacancies. All staff impacted by the structural changes will receive their full entitlements and have access to counselling and career transitioning services.


Chinese dairy company seeks SA processing plant investment

Chinese company Blue Lake Dairy (BLD) has applied for a permit to create a $AUD15million milk processing and packaging plant in Tantanoola, South Australia.

The application was lodged to the Wattle Range City Council to transform an old potato chip factory into the milk processing plant. If approved, operations will begin in June or July with most of the powdered milk and formula products exported to China. 

The dairy plant is the first of a two-part project by BLD, the second is a $AUD50million investment into technology to produce their own base milk powder. 

According to the Financial Review, Sarah Barnett, BLD’s spokesperson, the company had agreements to receive milk from South Australian and Victorian farms.  

The Associate Director for rural and agribusiness transactions at Colliers International Jesse Manual said that the dairy clients would benefit from another milk buyer and would bring more farm investors to the region.

“I think it’s fair to say that dairy production, and now processing, is very well placed to be a major economic contributor to the south-east region long term.”

Image: The Adelaide Advertiser

Unilever launches Flora with Butter and Bertoli with Butter

Unilever Australia and New Zealand (ANZ) has added two new innovative, premium products to its flagship brands.

Flora with Butter and Bertoli with Butter are being launched in Australia after successful launches in 18 overseas markets including the UK and Germany.

New Bertolli with Butter and Flora with Butter have been launched to meet the changing tastes and preferences of consumers and combine the goodness of Bertolli or Flora margarine, respectively, with the taste of butter. 

Katja Thies, Marketing Director Foods – Spreads and Savoury, Unilever ANZ said, “Our heritage with our margarine brands like Flora and Flora ro-activ continues to be at the heart of our business and we will continue to support our flagship brands.

However, we realised there was a gap in the market to provide for consumers who enjoy the taste of butter but want the spreadability of margarine. 

“We’ve seen great success overseas. In Germany, which is similar to the Australian market in terms of product, 25% of the purchase volume came from new users each month, demonstrating that people are excited to try the new blend and that there is opportunity to grow our brand loyalty.

Overall the German market had a 10.8 per cent penetration rate and 43 per cent repeat rate after one year, which is an excellent result. 

“We anticipate that the Australian market will see trade up of existing users who are loyal to our margarine brands but we also anticipate new users will come on board.” 

Globally, Unilever is committed to its Unilever Sustainable Living Plan (USLP) which aims to reduce Unilever’s environmental impact while increasing our social impact. 

New Bertolli with Butter and Flora with Butter are in line with our USLP commitments including ensuring our spreads contain no more than 33% saturated fat and use sustainable palm oil that is backed by Green Palm (RSPO) certificates.


Quick and easy somatic cell counting in milk

The LactiCyte from Page and Pederson can undertake somatic cell counts for fresh and preserved cow, goat, sheep, and buffalo milk in less than sixty seconds.

The LactiCyte from Page and Pederson can undertake somatic cell counts for fresh and preserved cow, goat, sheep, and buffalo milk in less than sixty seconds.

Using a fluorescent microscope technique and magnification approach, the actual cells counted are recorded by a charged-coupled device (CCD) camera and saved to an internal database.

Somatic Cell Testing is critical in monitoring dairy herd health and ensuring quality in milk and milk products.

Dairy processors need to know the level of somatic cells present in milk, as high counts are linked to reduced yields, impacts on organoleptic qualities, and reduced shelf life.

At the farm level, somatic cell testing can be used to indicate the presence of mastitis in individual cows, or assessing the entire herd. Furthermore somatic cell counts can indicate whether medical treatment has been effective, or whether further intervention is required.

The most common test method currently available is microscopy, but this method can often be inaccurate due to subjectivity and may require the use of hazardous chemicals. Alternatively sending samples to an external lab will result in delays for results.

The LactiCyte has a cell counting range of 100,000 to 10,000,000 somatic cells per ml. It is compact, cost effective, and provides immediate results to make timely decisions either at the farm or processing plant.

West Coast butter earns champion award in NZ

Westgold Unsalted Butter was awarded Food for Chefs Champion Butter at the New Zealand Champions of Cheese awards on Tuesday night, ahead of marketing preparations to launch Westgold nationally.

Master Judge Russell Smith said the butter won the supreme butter award because it was, “The sort of butter you just want to slather more and more on. It’s a very good example of a technically well-made butter resulting in an even, smooth texture and delicate, sweet flavours.”

Manufactured by Westland Milk Products, Westgold butter has been sold throughout the world for more than 12 years. However, it has had limited availability on New Zealand supermarket shelves. This is about to change.

“We’ve sold Westgold internationally for years but recently decided it was time to share the West Coast’s best kept secret with our fellow New Zealanders,” said Westland Milk Products Chief Executive Rod Quin.

“If you live in Azerbaijan you probably already know that Westgold butter is a premium product.” Quin said, “but most Kiwis wouldn’t know that the champion butter in New Zealand is produced in Hokitika. The best butter starts with the best cream, and our farmers have a high percentage of Jersey cows in their herds, known for producing high quality cream.”

Westland conducted a complete redevelopment of Westgold in preparation for the launch on to retail shelves, planned for next week.

“We wanted to develop Westgold to reflect what makes the people and product unique,” Quin said. “The butter has new packaging designed to give it a uniquely Kiwi look, while retaining the golden foil that keeps the butter fresh and looking great. The new packaging will be made available to all of our consumers around the globe, but it all starts with New Zealand.”

“Behind Westgold is a tradition of making butter on the West Coast dating back to 1893. The process of butter making at Westland’s Hokitika factory has been refined over generations to become both an art and a science. Using time-honoured processes based on traditional batch churning, our butter-makers take quality, fresh cream and turn it into the butter that has now been recognised as New Zealand’s best.”

New locally made milk brand for SA

A new South Australian milk brand released over the weekend is sourced only from two local dairy farms and available only through locally owned retailers and food service outlets.

Adelaide Now reports that South Australians can purchase the ‘Adelaide Hills Dairies’ brand through Foodland and IGA stores as well as some independent shops, and cafes and restaurants. The products will be made at at B.-d Farm Paris Creek’s processing facility in the Adelaide Hills

According to Ulli Spranz, managing director of both Adelaide Hills Dairies and B.-d. Farm Paris Creek, there are plans to also begin selling yoghurts and cottage-cheeses carrying the Adelaide Hills Dairies brand later this year.

“Consumers can be absolutely assured that by supporting this brand… they will also be supporting an important part of the South Australian economy, while enjoying premium local dairy products,” Spranz told Adelaide Now.

In February the South Australian Government granted B.-d. Farm Paris Creek a $900,000 Regional Development Fund grant to support the company’s $6.5 million into its Meadows-based operation.

The project will place the company among only a handful of producers in Australia capable of ESL fresh milk production.

Fonterra opens new NZ mozzarella plant

Fonterra has officially opened a new mozzarella plant which has created 25 new jobs at its Clandeboye site on New Zealand’s South Island.

The plant has seen the company double its annual mozzarella production to 50,000 metric tonnes, over two facilities.

As stuff.co.nz reports, the opening comes at a time when local dairy farmers are being squeezed by low prices.

Speaking at the official opening, Fonterra director and Fairlie dairy farmer Leonie Guiney acknowledged that global oversupply was threatening the future of local suppliers, but added that the new plant which has been operating since last Mat was a milestone.

New Zealand Food Safety Minister Jo Goodhew congratulated Fonterra on the opening.

“I commend Fonterra’s commitment to improving food safety and standards of quality, reliability and traceability. The expansion of the Clandeboye plant and initiatives such as these help to create a business environment that delivers more jobs, higher business investment and higher wages. I’d like to congratulate Fonterra for reaching this milestone,” Goodhew said in a statement.

Morrison ticks off sale of Australia’s biggest dairy to Chinese buyer

Treasurer Scott Morrison has approved the $280 million sale of Australia’s largest dairy farming business to the Chinese-owned Moon Lake Investments.

Morrison announced he had agreed to the acquisition of the land and assets of the Tasmanian Land Company (TLC), including the Van Diemen’s Land Company (VDL) from New Zealand’s New Plymouth District Council (NPDC), subject to conditions on taxation.

He said his decision was consistent with the recommendation of the Foreign Investment Review Board.

Moon Lake is owned by Lu Xianfeng. Lu is the managing director and executive chairman of Kresta Holdings Limited, Australia’s largest window-covering retailer.

VDL, which dates from 1825, owns and operates 25 dairy farms in Tasmania, milking some 18,000 cows. The Treasurer pointed out that “VDL is currently a foreign-owned company that has always been owned by foreign residents”.

Morrison said he had considered the national interest test, including the likely impact on local jobs and increased investment to support economic growth. “In particular, the national interest test requires consideration of the impact on taxation revenue,” he said.

Approval of Moon Lake’s application is the first under new conditions, requiring it to comply with Australian tax law, Australian Taxation Office (ATO) directions to provide information about the investment and to advise the ATO if it enters into any transactions with non-residents to which the transfer pricing or any anti-avoidance measures in the tax law might potentially apply.

Morrison said Moon Lake had guaranteed all VDL employees would be offered jobs on terms no less favourable than their present ones.

It had also committed to investment projects on the VDL farms “which will provide additional economic activity to the Tasmanian economy, and based upon Moon Lake’s estimates will result in a near doubling of employment at VDL”, Morrison said. “This will guarantee more than 140 local jobs, generate an intended additional investment of over $100 million and an expected additional 95 jobs.”

Moon Lake planned to continue to supply the milk under the present contractual terms. This meant the supply of milk and milk products would not be affected – indeed supply might increase with more investment, Morrison said.

He said the VDL land had important cultural and natural heritage significance.

“Moon Lake has committed to honour the terms of all environmental and cultural agreements entered into by VDL, including with the local Aboriginal community. This also includes the ‘in principle’ approval for the construction of a Devil Proof Fence at its Woolnorth property to help reduce the spread of Devil Facial Tumour Disease among the Tasmanian Devil population,” Morrison said.

Businessman Dick Smith condemned the approval as a “disaster”. “You may as well not have borders if you are going to sell everything off,” Smith said.

The decision follows controversy about the purchase and comes before Morrison must decide on whether to approve the sale of the pared-down Kidman empire to a Chinese buyer. Earlier he rejected the Kidman sale particularly on the security grounds that Anna Creek Station, the biggest working cattle station in the world, overlapped the Woomera Prohibited Area. Anna Creek has been removed from the restructured bid.

The Conversation

Michelle Grattan, Professorial Fellow, University of Canberra

This article was originally published on The Conversation. Read the original article.

Is Margarine dead?

The reign of margarine is almost over. Sales of margarine—a plant-based spread that was once immensely popular because of its purported health benefits—have been rapidly declining and is now a cause of huge concern for Unilever, the world’s largest margarine producer and the parent company of brands that include Promise, Imperial, and Country Crock. The butter-substitute has a long history at Unilever—the company was founded through a merger between a soap maker and a Dutch company that began making margarine in 1872.

But, the truth is that butter has made a comeback: new reports argue that it’s not as unhealthy and artery-clogging as once thought, which has pushed margarine into quick decline. In response, Unilever last year created a separate business unit for its margarine operations, a move that its chief executive compared to “putting a sick child in a separate room from siblings, and showering extra care on them.” But the results have remained the same.

Margarine never had it easy

The rise and fall of margarine has been dramatic. According to researcher George W. Ladd, who documented trends in the state legislation of margarine, between the last half of the 1920s and the first half of the 1950s, per capita consumption of butter halved, while per capita consumption of margarine tripled. Using 1956 prices, this led to a $240 million loss to dairy farmers, a $430 million loss in the retail sales of butter, and a $240 million gain for margarine. One of the reasons for this dramatic increase was the repeal of various state laws that actually restricted the sale of margarine.

Given margarine’s recent decline, it’s perhaps interesting to look at the history of the anti-margarine laws of the twentieth century. They were mostly spearheaded by Big Diary, especially in Midwestern states where the dairy industry is key and, of course, loathe to lose millions in income. Consequently, in April of 1960, two Midwestern states—Minnesota and Wisconsin—were still one of the last two states to continue prohibiting the dying of margarine yellow to look more like butter.

In New York, for example, a law required retailers to tell customers in writing that what they were buying was not butter. The federal government passed a two-cent-per-pound tax in the Margarine Act of 1886, and the tax was quintupled just a few years later.

But Wisconsin was and continues to be its most vicious critic. It passed its first anti-margarine law in 1881, quickly followed four years later by the color law (which restricted the dying of margarine to resemble butter). Wisconsin didn’t repeal the law until 1967, long after margarine had become a commercial success in the U.S. Today, margarine is still prohibited in restaurants in Wisconsin unless specifically requested by a patron. This law failed to be repealed in 2011.

This article first appeared on JSTOR Daily.


Jstor Citations

Trends in State Margarine Legislation

By: George W. Ladd

Journal of Marketing, Vol. 24, No. 4 (Apr., 1960), pp. 65-69

American Marketing Association

BFC forms alliance with cheese distributor WRG

Beston Global Food Company (BFC) has formed a strategic alliance with leading Australian Cheese distributor, the Washed Rind Group (WRG).

The deal means WRG will distribute cheddar and other cheeses currently produced at Beston Pure Foods factory at Murray Bridge, South Australia; and purchase and age certain cheeses manufactured to the specifications of WRG for distribution through WRG outlets around Australia

WRG was established over 20 years ago and trades under a number of brand names including “Say Cheese Wholesale” and “Cheese Culture” which markets and distributes a wide range of cheese products to retail outlets and food service customers across Australia.

The Chairman of BFC, Dr Roger Sexton said that the strategic alliance represented an important step closer to the realisation of the plans announced by BFC in December to build a dedicated white mould (soft cheese) factory at Murray Bridge, adjacent to its existing hard cheese factory.

WRG will provide a broad range of speciality cheese advice to BFC with a view to producing a superior range of high value soft cheeses to replace a proportion of cheeses currently imported from Europe and all parts of the international cheese world.

The Managing Director of WRG, Mr Peter Heaney said that the highly productive BFC dairy farms and other farms in Southern Australia are capable of producing the quality of milk required to produce import replacing white mould cheeses of a very high standard equal to or even better than many of the imported versions currently brought in from overseas.

Mr Heaney said that a lot of cheeses sold by his company are air freighted direct from overseas producers which adds cost to the products and detracts from their shelf life.

“We are keen to support Australia’s burgeoning specialty cheese industry, and we see our strategic alliance with BFC as an extremely important way of delivering on this objective,” Heaney said.

Dr Sexton said that the alliance with WRG also reflected the determination of BFC to shift the focus of its cheese making facilities at the Beston Pure Foods factories at Murray Bridge and Jervois away from commodity cheese making to specialist high end, value adding cheese making.

As an example, he noted that he had recently returned from Bangkok where BFC has launched a new cheese product designed and developed by BFC called “Kyubu” specifically for the ASEAN market in conjunction with a leading Japanese food technology company.

“Kyubu” is a Japanese style flavoured cheese snack sold in 80g pouch packs, both for Adults (eg as nibbles with a beer or other drinks) and for Children (eg as a school or after school healthy snack).

“Taste testing had been used in major Bangkok supermarkets to fine tune the natural flavour profiles of the Kyubu cheese products prior to release and all the cheese used in the products is being manufactured at our Murray Bridge factory”, he said.

Dr Sexton said that a number of other new BFC initiatives currently in train will be announced by the company in conjunction with the release of BFC‘s Half Year Results on Monday 29 February, 2016.

Fonterra extends the life of milk

Launched this week, Anchor Milk has arrived in Australia and brought with it a new microfiltration technology, which will initially be available in Victoria.

While all milk is pasteurised Anchor goes one step further by using microfiltration to reduce the naturally occurring bacteria in pasteurised milk that causes spoilage by an additional 95 per cent. 

It does this by pushing the milk through a special ceramic filter, creating a beautifully fresh tasting finished product that has an extended shelf life of 21 days.  Normal pasteurised milk has a shelf life of 15 days.  

No additives or preservative are added to Anchor milk to achieve this longer shelf life.  In fact, it’s all about what’s removed to create the very finest filtered product. 

While Anchor offers a similar nutritional profile to other supermarket milks, the big difference is in its taste.

“Anchor is clean on the palette and has distinctly no after-taste – even after a week or two in the fridge,” said Kiril Simonovski, Director of Marketing at Fonterra.  “It really is beautiful milk and we think it offers consumers the best of both worlds through its superior taste profile, combined with the convenience of an extended shelf life.

“We know consumers shop by used-by-date because they want the freshest product.  We think Anchor will appeal to discerning households looking for a premium product with a recommended retail price of only slightly more than regular milk,” Simonovski added.

CSIRO Food Manufacturing Leader, Darren Gardiner, said microfiltration had been received well in other parts of the world.

“While we’re all familiar with the concept of filtration when it comes to water and coffee, the additional step of filtering out the unwanted bacteria in milk before pasteurisation is a major development in fresh milk,” Gardiner said.  

Anchor Milk is sourced exclusively from a small number of farms in Western Victoria, located close to where the milk is processed.  These farmers deliver high quality milk all year round. 

Private labels the new cash cow for dairy industry

The growing number of private labels in the dairy industry means producers increasingly have to vie for private-label contracts with large retailers to ensure their success, according to IBISWorld.

According to the market research company, private labels now account for approximately 25 per cent of products sold in supermarkets and grocery stores and are particularly prevalent in the milk, cheese and butter segment.

“Increasing numbers of private-label dairy products are contributing to a changing focus for dairy manufacturers. For players such as Murray Goulburn, which has won multiple major private-label contracts with Coles over the past two years, including a contract to produce private-label cheese previously held by Bega, the strategic focus is changing. Private-label products are now accounting for a greater share of products manufactured by the company,” said IBISWorld senior industry analyst Brooke Tonkin.

IBISWorld anticipates that private-label sales, including private-label dairy, will outperform branded product sales over the next five years. As a result, private-label contracts are expected to become increasingly important to the success of dairy manufacturers aiming to service the local market. An increasing number of private-label products will also drive diversification in dairy product manufacturing, as manufacturers eye products such as milk powder and cheese as alternatives to traditional dairy products.

“For the producer, the trend towards private-label contracts also places companies in a good position for investment. Contracts like the milk and cheese private-label contracts won by Murray Goulburn provide an ongoing inflow of cash and give businesses the ability and confidence to invest in their production facilities over the long term,” said Tonkin.

a2 Milk profit skyrockets with infant formula demand

a2 Milk's half year profit has risen dramatically to $NZ10.1 million ($A9.34 million), on the back of demand for its infant formula.

The record half-year profit for the six months to December 31 compares to the profit of $NZ125,000 for the previous corresponding period.

In addition, the company’s total revenue rose to $NZ139.1 million, an increase of 86 per cent compared the previous corresponding period.

Revenue from sales of a2 Platinum infant formula across Australia, New Zealand and China were $73.9 million, an increase of 340% on the previous period. This compares with previously advised sales for the four months to 31 October 2015 of $38.0 million.

The company said it now expected full-year operating profit to be in the range of $45m to $49m, with revenue of $335m to $350m.

“The Company’s strategic agenda has been focused on growing and broadening the ANZ milk business and developing growth opportunities in select international markets,” commented a2 Managing Director Geoffrey Babidge.

“Following a period of development, a2 Platinum infant formula has become a significant contributor to growth and earnings in ANZ and China, which we see continuing. In addition, we see positive prospects for growth of a2 Milk whole milk powder, which was first launched late last financial year.

“We are pleased with the growing level of distribution for a2 Milk in the state of California and the repositioning of our brand in the UK during the period.”