a2 Milk launches into Costco: ‘We’re building our way to be the second national milk brand in the US’

06-Sep-2018 - Last updated on 07-Sep-2018 at 10:07 GMT

Two weeks after rolling out into Walmart stores, The a2 Milk Company became available in 3-packs at Costco stores across the southeast, signaling that a2 Milk is no longer a niche product concept, said managing director and CEO Jayne Hrdlicka who took the helm in July.

Founded in New Zealand in 2000 and headquartered in Australia, the dairy company produces fluid milk products containing the ‘easier to digest’ A2 protein found in specific cowherds (most milk contains both A1 and A2), the

JayneHrdlicka_a2Milk — a2 Milk Company managing director and CEO, Jayne Hrdlicka

company claims.

More about the science of a2 Milk HERE.

“The dairy industry has been struggling and the fresh milk category has been in structural decline for years. What we’re hoping to do is regenerate energy into a classic category of dairy and get people drinking fresh milk again,” Hrdlicka told FoodNavigator-USA.

“Costco and Walmart are both interesting additions to the retail family for a2 Milk. Both I think come about as a consequence to strong underlying consumer demand.”

Costco stores in Australia represent the company’s third largest retailer by volume sales and the company expects very strong sales results from working with US Costco locations with the plan to expand nationally with the retailer.

“Costco [US] is really excited about the role they can play for us because they want to be early in the evolution of the category in dairy,” Hrdlicka said.

“They make very attractive margins working with us.”

The 3-pack format is available in whole, 2% reduced fat, chocolate 2% reduced fat, and 1% low fat.

‘We’ve had great uptake from farmers’

Just as in Australia where a2 Milk holds a roughly 10% market share of the overall fluid milk category, a2 Milk aims to become a top fluid national fluid milk brand, Hrdlicka said.

“We’re building our way to becoming the second national milk brand in the country,” she said.

a2 Milk has been ramping up distribution in the US since a soft launch in the natural channel in California. The company previously announced a major expansion in the US market into the US Northeast, making products available in New York, New Jersey, Connecticut, Massachusetts, Delaware, Pennsylvania, and Rhode Island.

In addition to Costco, a2 Milk is sold at more than 6,000 retail outlets in the US including Walmart, Wegmans, Stop & Shop, Giant Carlisle, Giant Landover, Whole Foods Market, Market Basket, Sprouts, Safeway, King Soopers, Target, Ralphs, Publix, ShopRite and The Fresh Market.

Its broad expansion into the US market has contributed to the company’s total combined annual revenue posting a 101% gain in FY18, according to the a2’s annual results on August 22.

The company’s supply chain in the US has also expanded greatly to supports its national distribution tapping into dairy farmers who are interested in supplying the value-added fluid milk.

“We’re in a situation where we have a very broad base of supply that really covers the country. We have had no trouble in finding farmers who had interest in having their herds tested (using the company’s IP testing methods) and then segregating their A2 only dairy cows,” Hrdlicka added.

“We’ve had great uptake from farmers and we would expect no difficulty going forward.”