A2 Milk expands range to make milk powder with Mānuka honey

New Zealand-Australian company a2 Milk recently expanded its range by introducing a Mānuka honey milk powder to the Chinese, Australian and New Zealand markets.

The company aims to further expand into the adult nutritional powder market.

The product combines pure a2 Milk powder with Mānuka honey, sourced from New Zealand.

The product, packed by Fonterra New Zealand, comes in a 400g tin.

READ: The a2 Milk Company expands into South Korea

Mānuka honey helps improve the digestive system, it helps with sore throats and it can aid in healing wounds.

Combined with a2 Milk, it should create a more nutritious milk.

Most cows’ milk brands today contain a mix of both A1 and A2 proteins. All a2 Milk products come from cows hand-picked to naturally produce only A2 protein and no A1.

This is because, recent research suggests that the A1 protein in regular cows’ milk might cause discomfort in the stomach.

Recently, the company was also quick to pay a $20,000 fine by the Chinese Government for using a child in its advertising.

The advertisement breached Chinese advertising regulations, which state that children under 10 years old cannot be brand ambassadors.

The company used Chinese movie star Hu Ke and her son An Ji to promote the brand.

There were 29 other companies named by China’s advertising market regulator, in July, that breached child advertising regulations.

Other regulations in advertising in China include restrictions as to how companies can advertise baby formula.

For example, it is prohibited for an advertisement to claim that it is a full or partial substitute for breast milk.

The Chinese government aims to encourage breast feeding, therefore it enforces these rules.





Australian milk featured at Alibaba’s Smart Milk Station in China

In line with Chinese internet giant Alibaba’s ongoing efforts at innovation in new retail technologies, college students enjoyed an unprecedented and new experience in how to add Australian-imported milk to one’s diet at a university in Hangzhou earlier this month.

Alibaba has not only been instrumental in creating Hangzhou’s now highly developed internet economy, but has also helped the Zhejiang provincial capital prosper in the new retail sector, a sector that is fully reliant on the internet.

The event, hosted by Tmall Juhuasuan, an Alibaba business unit, in partnership with Tmall International, the internet firm’s popular B2C platform, witnessed the creation at a university in Hangzhou of a unique smart milk station modelled on the look and feel of a conventional roadside gas station. The site, designed to heighten interest in milk as a product that should be a part of everyone’s daily diet, is the first such new retail milk station worldwide.

At the 300 sqm milk station, college students received recommendations on the type of milk that meets their requirements after taking a quick quiz to determine preferences. Brands included Nestle, Freedom, Fonterra and Tmall International’s direct-sale brands Maxigenes and Devondale.

After adding milk, students had a go at winning at the onsite hammer game, akin to those seen at fun fairs, and receive the officially certified “milk power value”. Those with the higher milk power value can upload his or her photo onto the screen, and become the spokesperson for the milk station.

The event attracted many college students and other passers-by who enjoy games of competition and are passionate about expressing themselves. “I am the best at adding milk to my diet.”

The purchase experience is fully in line with what is referred to in Chinese as the “regimen”, especially the fancy “punk regimen” popular with the country’s millennials: staying up all night, drinking the most expensive milk, eating calcium tablets while drinking cola and using the eye-protection green wallpaper available on mobile phones for playing games in the middle of the night.

According to a big data analysis by Alibaba, the millennials, and especially those of college age, prefer choosing the rich-tasting, high-nutrition and easy-to-brew Australian-imported milk powder as a dietary supplement to keep oneself feeling energised in the midst of a busy, and often nerve-racking, academic life.

Based on Alibaba’s big data analysis, the creative team behind the project first analysed the shopping behaviour among adult milk powder consumers. With an understanding of the psychology of China’s millennials, the team spread news about the event far and wide, experimenting with different approaches to what is referred to as “new retail”. Having identified dairy products imported from Australia as a good fit, Juhuasuan teamed up with Tmall International to recommend products to specific consumers using various novel approaches, kicking off a series of promotions and other types of campaigns.

The smart shelf monitors selections made by shoppers in real time, quickly processing the information in order to make on-the-spot recommendations as the shopper moves through the aisles, while perfecting the logistics of the sales process to maximise the quality of the shopping experience. These efforts allowed the Juhuasuan smart milk station marketing event to successfully complete the closed loop combining online and offline sales.

New milk powder factory set to open in SA

The Union Dairy Company (UDC) has confirmed it expects to begin production at its new South Australian milk powder plant in July.

Construction of the facility in Penola, in SA’s south east is almost complete, and 40 staff have begun training, according to Daniel Aarons, managing director of UDC.

Aarons told Adelaide Now the factory will be focusing on “premium, high-spec, high quality milk powder”. According to Aarons, there is a strong global demand for Australian milk products, which are seen as high quality, clean and green.

UDC has also been in discussion with South Australian and Victorian dairy farmers, and it has been decided that approximately 50 per cent of the Penola factory’s milk supply will come from south east SA.

The factory plans to operate 24/7 and produce approximately 30,000 tonnes of whole and skim milk powder each year.

Milk powder and coffee top the export list to China

The demand for overseas goods continues to drive cross-border e-commerce in China and, as a result, further growth for virtual storefront Tmall Global, owned by Alibaba Group.

The B2C shopping site, which provides Chinese consumers with a direct sales channel to overseas retailers, saw the total number of international brands on the platform skyrocket 169 per cent to 14,500 in 2016 from 5,400 in the previous year year. The number of product categories soared 85 per cent to 3,700 from 2,000 over the same period.

Alibaba Group has revealed that Australia is China’s fifth most popular choice for import of goods, following Japan, the US, Korea and Germany.

Business Insider reported that the top six Australian brands over 2016 were Chemist Warehouse, Swisse, Blackmores, NaturesWay, dairy farmer cooperative Devondale and Woolworths supermarket. In fact, Woolworths set up its online presence of Tmall after noticing some of its products, including baby formula, were being exchanged there.

Australian products proving popular on the platform include health supplements, milk powder and coffee, according to the study conducted by Tmall and CBNData.

Milk powder set to disappoint in 2017

2017 is likely to be disappointing for milk powder manufacturing, with an anticipated revenue decline of 12.2 per cent and ongoing concern about the global price of milk powder, according to research by IBISWorld.

Revenue in the sector is forecast to fall 12.2 per cent during 2016-17 to $757 million. This follows on from declines of 35.8 per cent and 22.2 per cent in 2014-15 and 2015-16, respectively.

“The Milk Powder Manufacturing industry heavily relies on export markets, which account for approximately 90 per cent of industry revenue. Consequently, fluctuations in global milk powder prices play a major role in the industry’s performance. Global milk powder prices collapsed during 2014-15 amid concerns about excessive increases in milk powder supplies,” said IBISWorld Senior Industry Analyst Nathan Cloutman.

Prices did not recover during 2015-16 and are expected to only make a minor recovery during 2016-17. Furthermore, local producers are anticipated to reduce milk powder production during 2016-17, with low prices discouraging production. These factors will likely depress industry revenue during 2016-17.

Sugar Manufacturing

Elsewhere in the food & beverage sector, sugar manufacturing is likely to grow strongly this year. Revenue is forecast to jump 19.9 per cent during 2016-17 to reach $3 billion. Local sugar production is forecast to rise 3.7 per cent during 2017, due to an expected increase in planted area for sugar cane.

Increased production typically places downward pressure on prices. However, the Sugar Manufacturing industry’s reliance on export markets (which account for about three-quarters of the industry’s revenue) means that local prices tend to follow global sugar prices.

“The world sugar price indicator is projected to increase 20.1% during 2016-17. This is because global sugar consumption is expected to exceed global sugar production for the second year in a row, reducing world sugar stocks for the second year running. As the world sugar price indicator is expressed in US dollar terms, the projected depreciation of the Australian dollar during 2016-17 is expected to increase the world price of sugar (in AUD terms) even further during the year, boosting returns for local sugar manufacturers,” said Cloutman.

Grain Growing

Revenue for the Grain Growing industry is forecast to fall 5.5 per cent during 2016-17 to $13.3 billion. Local prices of key grains barley and wheat are forecast to fall 25.8 per cent and 15.6%, respectively, during the year. This is due to falling global prices, with the world wheat indicator price expected to decrease 13.8% in 2016-17.

“Record world stocks of many grains, caused by favourable growing conditions in many key grain producing countries (such as Canada and Russia) have created excess global supply, which is likely to place sharp downward pressure on grain prices during the year,” said Cloutman.

Looking more broadly at the whole economy, 2017 is likely to be characterised by growth in Road and Bridge Construction, Oil and Gas Extraction, Data Storage and Child Care Services.

While these industries are preparing for a bumper year, others may have to adjust to new commercial situations or limit their expectations for growth, including operators in Heavy Industry and Other Non-Building Constriction, Multi-Unit Apartment and Townhouse Constriction, and Mineral Exploration.

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New milk powder plant opens in South Australia


Premier Jay Weatherill yesterday opened the Blue Lake Dairy Group’s processing plant at Tantanoola in the South Australia’s South East.

The milk powder plant’s official opening is the first milestone in a two-stage expansion planned by the Chinese-owned company.

Stage one will enable the production of 20,000 tonnes of infant and adult formula, using powdered milk.

When full production at the milk plant starts in coming months, the number of employees will increase from 24 to 60.

Stage two is expected to involve a new $50 million factory to convert milk into powder and create an additional 90 jobs.

“We applaud the Blue Lake Dairy Group for its decision to invest in South Australia’s South East. It’s a decision that is expected to provide significant economic benefit to the economy of Millicent, Tantanoola and surrounding districts,” said Weatherill (pictured).

“The company’s investment demonstrates that South Australia’s regions have an abundance of unique, premium products and many opportunities for foreign investment, which creates local jobs.”

This is particularly the case in the South East which continues to play a big role in driving our State’s economy, contributing $3.6 billion in gross regional product in industries such as forestry, beef and dairy cattle, lucerne seed production and rock lobsters.

Wang Xin Xiang, Managing Director, Blue Lake Dairy Group said the company was pleased to invest in South Australia and thanked the State Government as well as Wattle Range Council for their support.

“The work performed by local contractors engaged on the project has been very professional and of excellent standard and we thank them for their efforts in making our new facility state of the art,” he said.

World first earthquake proof commercial plant for Fonterra starts production

GEA has built a unique whole milk drying plant for Fonterra in Pahiatua, New Zealand on an earthquake fault line that has been designed to withstand an event without damage.

In an effort to speed the process and keep costs down, a new facility was designed to withstand tremors with a base isolation that would allow the building to move should a quake hit.

The milk drying plant is one of only a handful of buildings in New Zealand that is protected from earthquakes –the first commercial plant of its kind.

Processing equipment that includes milk reception, storage, wet processing, evaporation, drying, powder handling, packing and water delivery will be supplied by Fonterra which operates the world’s largest milk powder dryer.

According to GEA’s Project Manager Gary Reynolds, “The RO plant will also produce boiler feed water of very high quality using less chemicals to protect the steam system from corrosion, increasing the life expectancy of the plant and reducing operating costs.”

“We have used a seismic loop on all the supply lines that gives them enough slack while being supported adequately as well,” said Reynolds.

The plant is now commissioned and was on product on 18th August less than two years since GEA received the order. Teams from GEA and Fonterra worked side-by-side in completing the construction in New Zealand.