Media Updates, page-192

Sorry you are incorrect, A2 is not a discretionary product to those who buy it, they buy it due to a reason they have. The area my Woolworths is in would never be classed as a high income area, yet it constantly runs out of A2. 

This is why A2 has the growth it has and will continue to do so, as new customers hear via word of mouth of A2 and try it, if they see the benefits to their needs, i.e bloating/cramps/taste etc then they too will become LT customers.  A2 has moved from from discretionary to essential for this customer segment.  In fact it is probably becoming a 'Destination' product for the supermarkets, in that shoppers come in because A2 is there, if it is not there, they leave.  

The competition for A2 is no longer other milk's, it is non dairy milk, and on price points A2 more than competes with them.    

The reason that shorts have risen is that A2 is lumped into the same category as all other Agricultural commodities, so it is judged based on how the sector is going, including BAL, BUB's etc, A2 is just not in the same league as these others, they are way out in front on marketing, sales penetration and their understanding of China.  BAL has not got certification yet, has a business model problem and is easily brand replacable.  All others  trying to enter the baby formula market in China have struggled for penetration.

There is a macro risk between China and Australia is Sth china seas flashpoint gets problematic, however A2 is an NZ company who have no beef with China at this point.  I suspect the Insto's have forgotten that and lump A2 into the Australian bucket.