nestle - doing A2 infant formula, page-96

I think those that sold into the dip in fear today will rue their decision in time to come. Lets liken for arguments sake  the rise of A2 and luxury SUV's. The only thing they have in common, you cant patent a SUV and the demand is growing for both and has been for a long while. Did BMW throw in the towel when MB and Audi jumped onto the bandwagon when they saw the demand for a luxury SUV  was not just a fad ? No the arrival of new entrants into the space helped fuel the rise of the SUV to the point where it is today. Its gone from being a niche category with 10% of the market like A2 is to well over 50% where it is today

A2 has said time and time again they have always said it was not a matter of if, it was only a matter of when their competition would enter the A2 space. A2 is not a fad or a niche IF product and going forward the old adage says if you cant beat them, join em and thats exactly what Nestle has done.  A2 has expected and anticipated this event for quite some time and behind closed doors they probably even welcome it as its more a admission of the growing popularity of A2 over A1/A2 by their opposition.
The more the size of the A2 market grows the better it is for A2M as its product range is exclusively A2 and its not going to cannibalize sales

Its not like the size of the pie is fixed and another entrant is going to take market share from us. Indeed the announcement of a major, if not the biggest player in the IF space making a A2 exclusive product actually will increase the growth of A2 IF and milk over the A2/A2 products worldwide.

The world is only months away from several major car players releasing their versions of electric cars in the sedan and SUV sector to enter the space that Tesla has had all to itself for all these years. Has it affected Tesla share price, no. Elon has welcomed the move as it only vindicates the future of the product when your competitors jump onto the bandwagon and gives you free marketing. Just like Tesla the growth of the A2 product does not hurt us as we dont have any product in the A1 space. Tesla competitors have been late to the party just like Nestle because they saw the future has changed but left it until they could no longer wait any more after watching the rise and rise of a new entrant with a point of difference that was cutting their lunch in China market. Its a double edged sword for Nestle as the success of their A2 product will cost them sales from their existing A1 products. Their push into the A2 space and associated advertising spend will benefit A2M bottom line more than Nestle and that's what people are not seeing at this point following the heard mentality. I think we are going to see a lot of SP fluctuations in the short term from fear and market manipulation but I foresee after another stellar report we will likely see new SP highs.

The A2 pie is growing and the only way this announcement can affect us in the long term is that this new entrant  sells more "Atwo" than the rate of growth of the whole A2 IF market to affect us going forward.

This snipet is from a News.com.au article from today.

A2 Milk has been increasing its market share in Australia and China on the back of strong sales of its A2 Platinum infant formula.
A2 Milk said in February that it expected broader interest in the A1 protein-free category over time.


"Given its pioneering heritage, its comprehensive suite of intellectual property and a business model focused solely on products free of the A1 protein type, the company is well positioned to respond," A2 Milk had said.