Fonterra and The a2 Milk Company (a2MC) have today entered into a strategic partnership that they say will unlock new opportuntiies for both companies.
Under the alliance, a2 Milk will leverage Fonterra’s global milk pool and supply chain, manufacturing capability and in-market sales and distribution capacity, while Fonterra will draw on a2 Milk's “brand strength and capabilities”.
The news comes as a2 Milk again posts yet another round of stellar financial results, with its interim revenues rising 70 per cent and its net profits rising 150 per cent to $89 million for the half year to December.
As part of the partnership, Fonterra said it is preparing to kick start conversations with its farmers to source an A2 milk pool for a2 Milk products in New Zealand, with the hope of significantly expanding this over time to help meet the growing demand for A2 milk. A similar milk pool in Australia will also be developed.
“The partnership is intended to fast-track market growth and this creates opportunity for our farmers to create additional value from their milk,” said Fonterra CEO Theo Spierings.
“We continue to see a strong future for dairy based on our existing range of products, including recent additions such as organic, low-lactose and high protein milk choices that consumers seek out for a premium. The a2MC products promoted by this partnership sit well within our overall portfolio of products," Spierings said.
“Consumers like to have choices and the growth of a2MC branded nutritional powders and fresh milk sales in Australia, for example, shows the potential. This partnership is all about finding ways to continue to delight our consumers and generate more value for our farmers.”
The partnership also includes an exclusive period to explore a2MC branded butter and cheese, and China-sourced liquid milk for sale in Australia, New Zealand and China, as well as the possibility of a jointly-owned packaging facility.
