New Zealand milk company A2 Corp says it plans to launch its A2 beta-casein-based milk products in the US on the back of its Australian success.
The company's first half sales rose 22 per cent to $NZ54 million ($A50 million) compared to the previous corresponding half, driven by the Australian market, which made up 97 per cent of these sales.
These sales will fund the overseas expansion, according to the company, which sells milk containing A2 beta-casein type milk protein in Australia, New Zealand and the UK.
A2 holds patents, trademarks and proprietary processes relating to milk containing A2 beta-casein type milk protein, which it says offers digestive benefits compared to traditional milk.
“The continuing strong performance of the Australian business together with the momentum building around our priority initiatives in the United Kingdom and infant formula were the highlights of the first half. Our confidence in the development of the group over recent times has enabled the company to advance North America as the next priority growth initiative,” managing director Geoffrey Babidge said.
The company said that given the UK business is now established and showing growth from a small base, an entry plan for the USA should now be developed, given its strong intellectual property rights and know-how in this market and the attractiveness of the A2 proposition.
“In addition, the industry and market dynamics are considered favourable to a market entry strategy for our product,” the company said.
The company will establish its activities through a wholly owned USA subsidiary and recruit a small management team with in-market experience.
In Australia, the company's products sell in Coles, Woolworths and IGA stores, and A2 has around eight per cent of Australia's market share by value in grocery.
The company also recently launched A2 Platinum infant formula in Australia, New Zealand and China. The company said early sales performance in Australia was positive whereas sales in New Zealand were modest given limited grocery distribution achieved to date.
It also said it continued to assess opportunities to broaden the portfolio of A2 brand products. In January, for instance, the company launched thickened cream into the grocery trade in Australia.
A2 Corp is preparing to launch in the US.
