Maui Milk targets 500 litre ewe production by 2030 as leadership transitions
Sheep milk processor Maui Milk is on track to record average ewe production of 500 litres by 2030, says outgoing chief executive Greg Hamill.
Over the last nine years, the Invercargill-based company has grown its market share in China and is the biggest selling brand of sheep infant formula in the country.
Blue River sources quality sheep milk and whey from companies in New Zealand and Europe and blends them into infant formula at the Invercargill plant.
Blue River sales and supply chain manager Gareth Lyness says the sheep infant nutrition market hasn’t gone global yet.
“There are not yet significant volumes consumed outside of China,” he told Dairy News.
“Infant formula is a complex and highly regulated product and is consequently very defensible.
“In many markets, sheep milk formula is simply too niche to achieve a viable scale within that single market.
Read More:
- Maui Milk targets 500 litre ewe production by 2030 as leadership transitions
- Sheep milk cheddar named NZ's top cheese
- Green light for formula exports to China 'a game changer'
“The exception is China where the market is big enough, and consumers have sufficient appetite for premium products, such that a relatively niche product is still able to achieve the scale to develop efficient production processes and continue innovating, as we have with our sheep range.”
Led by Blue River, the sheep infant nutrition category has grown significantly in size and market share over the last nine years, he adds.
“Success in China will enable sheep infant formula manufacturers to springboard into new markets in future.”
The sheep infant formula market in China is becoming competitive. While Blue River is the biggest selling brand in the category, competitors are following the company into the market.
Lyness says overall sales of their sheep formula range have continued to grow.
“Which against the background of China’s well-publicised diminishing birth rate represents a significant gain in market share for us and for the sheep category.
“We’re very proud to have successfully re-registered our sheep formulations with China’s State Administration for Market Regulation (SAMR) in October, as we continue to innovate and improve our products at every opportunity. We have also made significant investments into our plant capacity and technology which have started bearing fruit this year.
“We’re well past the point of leveraging firstmover advantage. Now we are more focused on continued innovation and leveraging the equity in our brand.”
Blue River is owned by the Chen Family from China. They bought the business in 2015 from founder Keith Neylon.
Whey is essential for China registered infant formula and Lyness says the Chinese owners have invested strategically in a European supplier of sheep whey, as the quality and quantity of sheep whey needed for infant formula simply doesn’t exist outside of Europe.
“For sheep milk powder, we leverage that European supply chain as well as the proximity of domestic New Zealand suppliers.
“This dual supply model has many benefits; it maximises freshness from two offset seasons, ensures quality and security of supply by spreading supply, logistical and geopolitical risks across different regions and allows us to respond rapidly to changes in demand without holding excess inventory.”
New Zealand made food products remain popular in China despite changes in consumer preferences.
Lyness says 10 years ago there was a strong preference among Chinese consumers for imported brands.
He says now, for several reasons, including the successful growth of some strong domestic manufacturers, the majority of consumers favour Chinese brands.
“There remains a premium appeal for made in New Zealand products, but that alone is not enough to sell your product; you must have a great product with clear advantages over others, both imported and local, to win discerning Chinese consumers.”
Goat, Cow Formulas
Blue River Dairy also blends cow and goat milk formulas for the Chinese market.
However, they are highly competitive categories. Gareth Lyness says challenges include a shrinking market with diminishing birth-rates, economic conditions which create greater price sensitivity and fierce domestic competition.
“Nevertheless, our strong brand and investment in innovation have enabled us to hold steady in a tough market.
“We have a loyal customer base supporting our quality cow and goat formula ranges which are made using NZ dairy ingredients.”
