Australian dairy products find success in China

18 Feb 2015

Australia’s Freedom Foods Group has launched ‘Australia’s Own Kid’s Milk’, its first branded retail food product for the Chinese market, in China and Australia.

The product is being marketed in China by Shenzhen JiaLiLe Food Company (Shenzhen JLL), the group behind one of the largest selling ready-to-drink beverages in China. It is the first product launch by the two companies, who have entered into a 50-year marketing and distribution agreement.

‘Australia’s Own Kid’s Milk’ is one of the first Australian milk products marketed specifically to the post-infant-formula toddler market. It is produced by Pactum Dairy Group’s Shepparton facility.

Australia’s Own Kid’s Milk joins other recent Australian dairy successes, including the recent launch of one-litre bottles of fresh milk by Norco, A2 and Jonesy’s Farm, available in-store and online.

‘China is increasingly becoming a focal point for Australian dairy producers,’ said Brent Moore, Austrade’s Trade Commissioner in Shanghai, who was a guest panellist at the China launch of ‘Australia’s Own Kid’s Milk’.

‘Chinese consumers rate Australian dairy products very highly for quality and safety. This is particularly important for dairy products, given their role in baby and toddler nutrition,’ Mr Moore said. ‘Deals like this expand the availability and profile of Australian products in China and gives consumers more choice, which is good for families and good for competition.’

The Shenzhen JLL and Freedom Foods agreement follows a November 2014 Memorandum of Understanding (MoU) between Freedom Foods, Australia’s Perich Group and China’s New Hope Group. The MoU was completed during official ceremonies in Australia to mark the formal signing of the Declaration of Intent to work towards bringing the China-Australia Free Trade Agreement into force.

Under the November 2014 MoU, Freedom Foods, the Perich Group and New Hope Group will work together to increase long-term dairy milk supply by setting up new large-scale intensive dairy farms in south-east Australia.  

Freedom Foods Managing Director Rory Macleod said: ‘Australia has a unique advantage in the supply and manufacture of high-quality premium agriculture-based foods. With increasing demand from markets in China and SE Asia for high-quality value-added product, Australia through companies such as Freedom Foods Group and Perich Group are well placed to play an important role in the development of this supply chain.’

New Hope will be a core investor and partner in the operations, while continuing to market and distribute value-added dairy products into China through its New Hope Dairy business. New Hope has established an investment fund of up to A$500 million to develop agricultural and food processing activities in Australia, with a substantial proportion to be invested in dairy farm and processing activities in the longer term.

Consumer and trade interest in Australian food, beverage and consumer products is at record levels. According to an analysis of statistics released in 2014 by the Department of Foreign Affairs and Trade, total food exports from Australia to China grew by more than 50 per cent in 2014 to reach A$4.3 billion, with sales of value-added foods estimated at A$800 million.

In the past six months, Austrade has supported the launch of five Australian products or brands and three e-commerce platforms specialising in Australian food and consumer goods in China.

Beijing-based Austrade Trade Commissioner Susan Corbisiero said participating in in-store, business-to-business and online promotions are effective ways for Australian companies to win the business of Chinese consumers.

‘Each year, China buys more than US$100 billion of imported food from across the globe,’ she said. ‘In the face of competition from the US, Europe and New Zealand, winning in China requires an investment in brand and relationship building.’

On 16–20 March 2015, four Australian dairy companies will join 19 other Australian companies at Premium Australia, a three-city travelling showcase of premium Australian food and beverages.

Read about exporting food and beverage to China or contact Austrade on 13 28 78 or for more information. Austrade will release a guide to exporting to China via e-commerce in the coming weeks.