A difference you can feel
Several thousands of years ago, A2 was the original and only form of beta-casein protein produced by cows. However, through natural genetic mutation and selective breeding, the A1 protein appeared and spread through Western herds. Nonetheless, cows which produce the A2 protein exclusively are still in existence. A2 Milk is natural and additive free milk which comes from cows which produce the A2 beta-casein protein, as opposed to A1. Since establishing A2 Dairy in 2007, business has grown over 500 per cent, and there’s a reason for that.
Benefits of A2
“The benefit of A2 is really the absence of A1,” says Peter Nathan, CEO of A2 Dairy Products Australia. Most fresh milk supermarket brands contain both the A1 and A2 type proteins, unlike A2 Milk. This difference in protein composition could mean improved digestive wellbeing for some drinkers. In addition A2 Milk has also helped many consumers who incorrectly assumed that they were completely lactose intolerant. “23 per cent of consumers have a perceived dairy intolerance, only about five to six per cent are actually medically diagnosed as lactose intolerant, and about one per cent have a cow’s milk protein allergy,” says Nathan. “Most of those people in that 23 per cent may perceive benefits from A2. When they switch to A2 many claim that they can drink dairy without feeling uncomfortable and without what we call ‘post-dairy discomfort’. Therefore, many consumers reengage with dairy again without noticing discomfort.” While A2 milk still does contain lactose and will not help those who are medically diagnosed as lactose intolerant, A2 Dairy Products believes that it may help people who believe they are lactose intolerant but are actually not.
A2 Milk is particularly unique within the industry – in fact, it’s the only product of its kind. “We have a very privileged position in the sense that we have a patented unique point of difference. We have patent protection around the genetic testing distribution, collection, and marketing of A2,” says Nathan.
If you need further proof of A2 Milk’s high quality, know this: it is award winning. At the 2009 Victorian Dairy Products Competition, which was hosted by Dairy Industry Association of Australia (DIAA), A2 Dairy’s Full Cream and Light Milk took home trophies. The high scoring milks won the Ecolab Trophy, and the Campbell Cleantec Trophy, respectively. What’s more, the DIAA voters have not been the only people that have sat up and taken notice. A2 Dairy has received numerous testimonials from customers praising their Full Cream Milk, Light Milk, and Natural Yoghourt for their taste and for their ease of digestion.
Trends and challenges
In terms of current trends within the industry, Nathan mentions the price war – a war that has seemed to work in A2 Dairy’s favour. “We’ve grown since the price war,” says Nathan. A2 Dairy has been the fastest growing dairy brand in Australia for a while now, as well as one of the fastest growing businesses in the Fast Moving Consumer Goods Industry. They have plenty of reason to believe that this growth will continue.
A common challenge for retailers in the food and beverage industry is that consumers often don’t perceive the difference between generic and branded products. Luckily, A2 is not just a brand. There is a very significant point of difference between A2 milk and regular cow’s milk. According to Nathan, consumers have come to understand this difference. “What the price war has done is actually sharpen the distinction between A2 and competing brands. It’s actually assisted us.”
“The price war confirmed that most competitive brands have very little genuine point of difference as most competitors suffered significant market share losses. A2 on the other hand has experienced vigorous growth post the price war,” says Nathan. Now one of the concerns at A2 Dairy is getting enough supply. Each cow has to be genetically tested to make sure that they are A2. This is done by a simple, non-invasive test done on the hair from the cow’s tail. The process was developed by A2 Dairy, and causes absolutely no harm to the animal whatsoever.
Too good to not share
When consumer markets outside of Australia read about A2 milk, they are likely intrigued. Lucky for them, A2 Dairy has plans for expansion. “We’re looking at the possibility of extending the proposition globally, with other markets,” says Nathan. This means that the goodness of A2 milk will be available in other markets around the globe. While nothing is final, Nathan says it is a serious consideration. “We want to grow the business organically in Australia, both within the fresh milk market and other dairy related categories.” Currently, they are opening a new manufacturing facility in West Sydney and increasing their employment levels.
In order for A2 Dairy to expand and distribute their products around the globe, they will need to inform consumers about why their product is so great. This is a fact A2 Dairy knows well. “It is important to communicate the A2 proposition to consumers via our advertising strategies. This has been a challenge considering the complexity of our message,” says Nathan. Nonetheless, A2 Dairy has used social media to their advantage. “We have a very strong Facebook community and an effective Twitter program. A lot of consumers certainly look for A2 in the online space and have improved their knowledge based on online searches,” says Nathan. In addition to advertising, A2 Dairy has used social media to spread the message about A2. This has been a wise move on the part of A2 Dairy because their story will continually be heard by people all over the world.