If you compare between before DB took over and now, new product development has improved quite a lot. It is easy to forget how few products the company offered up until 2020. Hindsight is golden but there was obviously complacency in multiple areas of the business, innovation and new products being one of them.
Look at the product range on the A2 China website in May 2021:
Versus China products today:
You'll see much of the innovation has occured in the milk powder space and that has likely been enabled by the acquisition of MVM.
In my view the major barrier to innovation in the IMF space is, in a similar vein, the company's lack of IMF manufacturing capacity and reliance on Synlait. Companies like Danone can test and develop new products because they do not have to navigate a thorny supplier relationship whereas A2M still lacks that capacity. Clearly the current management can carry the science / R&D through to new products for market when they have the manufacturing capability to support it.
A2M Price at posting:
$4.85 Sentiment: Hold Disclosure: Held
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