NEW ZEALAND – Fonterra and a2 Milk company have entered into a strategic partnership that will enable Fonterra and its farmers source an a2 milk pool to increase production of a2MC products across New Zealand and also, Australia.
They intend to expand the scope of the program in one way to meet the growing demand for a2MC products.
The partnership will build closer relations between the two companies, linking Fonterra with a2MC’s brand strength and capabilities.
Fonterra also plans to link a2 Milk to its global milk pool and supply chain, manufacturing capability and in-market sales and distribution capacity.
The programme was designed not only to generate higher returns but also, use a2MC’s brand strength and capabilities to address the growing demand at both local and international market.
According to Theo Spierings, CEO Fonterra, the partnership was intended to enhance market growth while creating an opportunity for farmers to improve their milk.
To benefit from the growing international market, Fonterra aims to combine its high quality milk pools, global supply chain, manufacturing capabilities, knowledge, in-market sales and distribution expertise with a2MC brand strength.
“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,” said Theo Spierings.
He added that the sector showed great potential especially in Australia where consumer preferences and choices are significantly changing.
The partnership will enable them to continue with a commitment to satisfy consumer wants and giving farmers not only good returns but also value for their milk.
Nutritional Products Manufacturing and Supply Agreement will be used as a guide in developing the New Zealand and Australian milk pools.
They will also engage farmers to come up with the best way to source a2 milk for a2MC products and share with them the likely benefits and value of the program.
Fonterra will produce nutritional milk powder products at its facilities in New Zealand and at its nutritionals facility, Darnum in Victoria, Australia, then supply them in a2MC’s new priority markets across South East Asia and the Middle East.
The partnership also involved distribution and sales arrangements, a jointly owned packaging facility, a New Zealand Fresh Milk Licence and an exclusive period to explore a2MC branded butter and cheese, and China sourced liquid milk for sale in Australia, New Zealand and China.
