The latest commentary from Keith Woodforde highlights some difficulties new entrants to the a1-free milk market have. In particular, in sourcing milk from NZ/Aus which, as we know, the China market values very highly.
"For the next five years, the potential supplies of A2 milk are largely restricted to wherever there are dairy farmers with multiple herds. These farmers can segregate out and concentrate the A2 cows from within each of those mixed herds, so as to produce pure A2 herds. In practice, this largely means the USA, New Zealand and China.
In Australia, there are also some limited opportunities, but these are very limited compared to the previously mentioned countries. Most of the limited opportunities there will have already been ‘spoken for’ by either The a2 Milk Company or Freedom Foods."
"Given the dominance of Fonterra in New Zealand, together with Fonterra’s new alliance with A2Millk, plus the existing and increasing demand by Synlait for A2 milk, it is apparent that most of the New Zealand supply of A2 milk is ‘spoken for’. Nestle’s statement that they searched unsuccessfully for a New Zealand supply of A2 milk provides confirmation."
The next five years gives A2M a great head start to take market share and establish itself as the leading a2 brand. There will be other brands appearing but having control of most of the a2 milk from NZ/Aus is a huge advantage.
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