a2 Milk Company expands to the US Northeast

By Mary Ellen Shoup contact

- Last updated on GMT

The expansion includes roughly 1,000 more northeast retail locations that will stock a2 milk products.
The expansion includes roughly 1,000 more northeast retail locations that will stock a2 milk products.
New Zealand’s a2 Milk Company is expanding its US business to the Northeast region, a market that accounts for roughly 20% of total US milk volume, a category that is beginning to see some growth in sales after years of declines.

Following a year of significant struggles in 2016, drinking milk products experienced some mild relief in 2017 driven by sales of full-fat fresh milk and flavored milk, according to Euromonitor.

The a2 Milk brand entered the US west coast market in 2015​ with a range of milk products free from A1 beta-casein, a protein type found in conventional milk that may trigger symptoms of milk intolerance in some consumers, according to the company.

The brand expanded to the Southeast last year in an additional 1,100 Publix stores and also added a 2% chocolate milk product to its range, achieving a sales velocity of more than 30 units per store per week in key accounts. 

Its Northeast distribution across nine states (New York, New Jersey, Pennsylvania, Connecticut, Rhode Island, New Hampshire, Massachusetts, Vermont and Maine) will include major retailers such as Ahold, Shoprite, Safeway, Fairway Foods, and Whole Foods Market, increasing its presence from approximately 3,600 to 5,000 stores by the end of January 2018.

The company said it will be investing close to US$25m over the course of FY18 and FY19 to build its brand awareness in the US.

Part of the investment includes the continuation of its integrated multimedia “Love Milk Again” ​campaign launched last year, alongside improved shopper marketing programs. The company added it is also looking into new product opportunities for the market.

Total reported sales revenue for the first four months of FY18 YTD reached US$190.98m, an increase of 68.9% compared to the first four months of FY17.  

“a2 Milk Company expects continued growth in the 2018 financial year, in particular from infant formula and milk powder products in Australia and China and improved momentum in the US and UK businesses,”​  managing director of a2 Milk Company, Geoff Babidge, said.

“We are also positive around opportunities to broaden the nutritional products portfolio.”

Related topics: Markets, Dairy, Dairy-based ingredients

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