North Sydney, Australia—The a2 Milk Company this week reported total revenue of $922.7 million for the year ended June 30, 2018, an increase of 68 percent over the prior corresponding period (pcp).
During the year ended June 30, increased investment in brand and market development resulted in rapid growth of infant formula and the expansion of the liquid milk business in each of the company’s established markets, the company reported.
Sales of a2 Platinum® infant formula again grew substantially in Australia and China, with continued growth in market share, the company stated. a2 Platinum sales revenue was $724.2 million, an increase of 84 percent over the previous year.
The company advanced its growth strategy through multiple initiatives: launching three new products (a2 Platinum Stage 4 milk powder, a2 Platinum pregnancy formula and a2 Milk powder blended with Manuka honey); entering new markets in South East Asia; and establishing a strategic relationship with Fonterra and an exclusive distribution agreement with Yuhan Corporation for the South Korea market.
Fiscal year 2018 “has been a transformative year. Our brand and unique approach are working across multiple products and markets and we are seeing real momentum building in China and the US,” said Jayne Hrdlicka, managing director and CEO of The a2 Milk Company.
“The ongoing momentum reflects the growing strength of our brand proposition, continued execution success in our end markets and in management of the supply chain,” Hrdlicka continued. “The company has continued to invest in brand building and advertising and in the strength of the organization, as we build capability and capacity to deliver on growth against our core opportunities.
“The extended arrangement with Synlait Milk and the new relationships with Fonterra and Yuhan Corporation are important steps in the development of both our supply chain and our capacity to develop new markets,” Hrdlicka added. “The extended relationship with China State Farm is another important relationship, underpinning our platform for growth in China.”
The company said its US region is continuing to build strong brand awareness with an increased distribution by 50 percent since the end of June 2018 to 9,000 stores and sales velocities in both new and existing accounts continuing to build.
“Pleasingly recent research is showing the a2 Milk® brand in the US is successfully growing category consumption, sourcing volume across multiple product segments and trading up consumers from conventional milk,” Hrdlicka said. “This is in line with our experience in Australia. It’s encouraging as it shows our ability to build a broad scale brand that is ripe for further growth and expansion.”
Consumers can now find a2 Milk at more than 1,000 Food Lion stores throughout the Southeast as well as at select Costco and Walmart outlets. Other major grocers carrying a2 Milk products include Wegmans, Stop & Shop, Giant Carlisle, Giant Landover, Whole Foods Market, Market Basket, Sprouts, Safeway, King Soopers, Target, Ralphs, Publix, ShopRite and The Fresh Market.
The a2 Milk Company continues to extend the geographic reach of its US distribution network across California, the Northeast and the Southeast, with plans for expansion throughout the Southwest, West and Midwest.
“The growth that The a2 Milk Company has experienced since launching its US expansion in January represents a true validation of our consumer proposition,” said Blake Waltrip, CEO of The a2 Milk Company US. “The belief in the power of our product by a high caliber retailer like Food Lion bears out the promise of the a2 Milk brand and takes us yet another step closer to bringing American consumers back to dairy, helping dairy farmers in the process.
“We remain committed to providing solutions that can help more people enjoy the nutritional goodness that only comes from real and natural milk,” Waltrip added.
In the US, The a2 Milk Company works with local dairy farmes to identify cows that only naturally produce the A2 protein type and process their milk separately. The company said it pays a premium for that milk.
In 2019, The a2 Milk Company anticipates further growth in revenue, particularly with respect to nutritional products in Australia, New Zealand and China, and liquid milk in the US. The focus on growth initiatives in targeted emerging markets and new product development will continue.
The a2 Milk Company was founded in 2000 in New Zealand by Dr. Corran McLachlan after research showed that proteins in milk affect people differently. Specifically, he noted that ordinary cows produce milk containing two different beta-casein protein types, A1 and A2. a2 Milk contains only the A2 protein type.
