Food & Beverage Industry News - September 2019

Page 34

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Disruption to milk market not a bad thing Sometimes, The a2 Milk Company has a target on its back. That’s fine, according to CEO Jayne Hrdlicka. Here’s why, explains Mike Wheeler.

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2 milk had a rocky start when New Zealand businessman Howard Paterson and research scientist Dr Corran McLachlan founded the A2 Corporation in 2000. The milk, which claims to help reduce the risks of digestive problems, diabetes and heart disease because it is said to contain only A2 beta-casein, seemed to hit a nerve with people who were sceptical of its health benefits. Three years after the founding of the company, both men died, which left the company in a state of flux. It went through several highs and lows – including going into administration in late 2003 – before becoming The a2 Milk Company, which now is based in Australia. It is run by Jayne Hrdlicka, who started at the company just over 12 months ago. Hrdlicka was the CEO of Qantas subsidiary Jetstar before joining the milk company, and has held positions at Ernst and Young, Bain & Co, and was a director of

Woolworths between 2010-2016. At the Global Food Forum held in Sydney, Hrdlicka spoke about where A2 milk is headed, why it is seen as a premium brand in China, and the science behind the milk’s claims. It’s a risky strategy to base your whole business model on one product – more so when some are a little uncertain of what makes it different from similar products. It’s share price has fluctuated over the past 12 months, but it does help when news gets out that discerning Chinese consumers think the milk is a premium brand. It has entered two of the most lucrative markets in the world – the US being the other – and Hrdlicka sees nothing but growth in the company’s near future. “We’re not talking specific numbers, but we’re playing in the two biggest consumer markets in the world,” she said. “We’re building a deep franchise with those consumers and we’re really excited about what the possibilities bring to the

34 Food&Beverage Industry News | September 2019 | www.foodmag.com.au

A2 milk powder is popular in parts of Southeast Asia. brand and shareholders.” When it comes to the science behind A2 milk, Hrdlicka makes no apologies about its brand strategy and indicates that it is the disruption that A2 milk is bringing to the marketplace that is causing the issue. Most of the noise about the benefits, or lack thereof, of the milk, is coming from those who have a vested interest in the milk not being commercially successful. The irony being that this is also keeping the brand in the spotlight, which is

not a bad thing if you are Hrdlicka. “We are quite comfortable with the company getting beaten up by big legacy players who feel uncomfortable because we are doing something different,” she said. “It happened in Australia, it happened in New Zealand. We expect it to happen everywhere we go and that is what happens when a disruptive approach to a category that has been around for a long time unfolds. “It happened in aviation, and it is happening across all consumer


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