Interesting developments for A2 products in the US. Having just...

Interesting developments for A2 products in the US. Having just turned over another bag in my investment portfolio which is comprised of 100% A2 Milk Company, I have everything vested in its success and am thrilled with Geoff's stewardship. Up to this moment I have only had one question about the management of the company - the hiring and subsequent firing of Jayne.

I have been watching how A2MC handles the distribution network and introduction of new products into the US market and I have to tell you, I'm not impressed. I've written previously about Meijers, the grocery store we use locally. A2 had 5 positions for liquid milk when it was first introduced - 2 whole milk, 2 2% milk and 1 chocolate milk. As of last week they now have only 2 positions - 1 whole milk and 1 2% milk. The coffee creamers that were introduced last year have not shown up yet. I'm not a big fan of people drawing conclusions about a complex distribution networks and supply chains based on 1 local store but results speak for themselves. In this area of the country if it takes a year to distribute coffee creamer throughout the distribution network I have to question how efficient or effective that distributions network is. The 3 lost positions were filled by Meijers' 3rd party packaging company Fresh Goodness. This is a trend that is happening now - grocery chains find it more profitable to use 3rd party packaging companies to package their own brands. Price points and margins are just a little better than brand names. This is happening on dairy, canned goods, staples, and just about every category of food. It doesn't matter that you can't compare the quality and benefits of A1 vs A2 milk, the Meijers brand is cheaper and thus a segment of the consumer population will always gravitate towards those products.

The point here is that I find the discussion about Gerber's introduction of an A2 IF fascinating, I wish A2MC could demonstrate a more responsive distribution network before we get all excited about how we're going to own the A2 market segment in the US. If it takes a year to fully saturate the supply chain with a coffee creamer, how can we expect to capture market share with multiple SKUs and diverse product segmentation?