Coca-Cola takes full ownership of fairlife

By Rachel Arthur contact

- Last updated on GMT

Coca-Cola takes full ownership of ultra-filtered milk fairlife

Related tags: Coca-cola, fairlife, Dairy

The Coca-Cola Company has acquired the remaining stake in fairlife LLC from its joint venture partner Select Milk Producers: giving it 100% ownership of the ultra-filtered milk company.

fairlife ultra-filtered milk debuted in the US in 2014. Since then it has seen double-digit growth each year and surpassed $500m in retail sales last year, according to Nielsen figures.

fairlife’s patented cold-filtration process seeks to concentrate the protein and calcium found naturally in cow’s milk - its ultra-filtered milk has 50% more protein and 50% less sugar than regular milk.  

Coca-Cola continues move beyond soda 

fairlife

fairlife was founded in 2014, seeing an opportunity to add value to milk. Its milk concentrates the goodness - such as protein and calcium - through a special filtration process.

Milk is separated into 5 key components (water, butterfat, protein, vitamins and minerals and lactose) then recombined in different proportions. 

Coca-Cola already holds a 42.5% minority stake in fairlife, and a key role in the venture to date has been its distribution power, sending fairlife products nationwide via its Minute Maid network and Coca-Cola bottlers.

Jim Dinkins, Coca-Cola North America President, says the acquisition of fairlife is part of its mission to become a ‘total beverage company’ – one that plays in a number of categories far beyond its traditional soda stronghold.

In addition, he sees value-added dairy products as a category growing steadily in the US – in contrast to the traditional fluid milk category.

“fairlife plays an important part in our strategy to continue growing as a total beverage company as we innovate to bring people more new products that meet their changing lifestyles and needs,”​ he said.

What next for fairlife?

fairlife has grown its reach across the US over the last six years and in 2018 launched its flagship ultra-filtered milk in Canada. It has also innovated with new products such as high-protein recovery and nutrition shakes and drinkable snacks.

Coca-Cola says fairlife will continue to run as a standalone business in Chicago; ‘giving fairlife CEO Tim Doelman and his team the space and running room they need to innovate and build the fairlife brand in a unique and fast-changing category’.

Coca-Cola will provide resources and expertise in areas such as sustainability and supply chain management.

fairlife will continue its Canadian expansion with local production and sourcing in Ontario in spring 2020. It is also continuing to expand production capabilty in the US by complementing production in Coopersville, Mich. and Waco, Texas, with a new facility in Goodyear, Ariz.

fairlife portfolio

  • fairlife ultra-filtered milk
  • fairlife with DHA, ultra-filtered milk with DHA Omega-3 fatty acids
  • fairlife YUP! - a line of flavored milks
  • fairlife Core Power High Protein Shakes
  • fairlife smart snacks - a drinkable snack
  • fairlife nutrition plan (nutrition shake)
  • fairlife coffee creamers

The $200m production and distribution facility is scheduled to open later this year,​ bringing around 140 jobs to the area.  

The company says it is also taking a closer look at its supply chain following an undercover expose last June that reported severe calf abuse​ at one of its supplying farms. fairlife says it immediately discontinued the use of all milk from the farm and conducted multiple independent audits of all supplying dairies.

“The disturbing abuse reported at one of our supplying farms last year was not in keeping with our values, our culture or who we are as a company,” ​said Doelman. “To say we were deeply saddened and disappointed is an understatement. But we knew we had to use this unfortunate incident to push for better. 

“This didn’t just mean correcting an isolated issue, but taking a closer look at everything we do to ensure we can continue to raise the bar on animal welfare throughout our supply chain. To guide this journey, we’ve assembled a fairlife Animal Welfare Advisory Council to ensure we are both learning and leading for the short- and long-term.

"We’re working with our supplying farmers across the US to outline more detailed animal welfare policies and protocols for any farm supplying fairlife. We’re investing with and in our farmers to ensure the most up-to-date animal welfare practices are encouraged and rewarded. And we continue to require that every farm in our supply chain is subject to regular third-party unannounced audits with clear action plans for learning and improvement after each audit.”

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