Fonterra and The a2 Milk Company enter new strategic partnership

Dairy companies Fonterra and The a2 Milk Company (a2MC) have entered an agreement that will see a2 products produced and distributed from Fonterra facilities in Australia and New Zealand.

As part of the partnership, Fonterra will now begin conversations with its farmers to source an a2 milk pool for a2MC products in New Zealand, which is intended to significantly expand over time to help meet the growing demand for a2MC products. A similar milk pool in Australia will also be developed.

Dairy farmers able to source milk from cows that produce A2 beta-casein will be sought after by Fonterra, as this formulation is what characterises a2 products which it will now be making.

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Fonterra CEO Theo Spierings said: “The partnership is intended to fast-track market growth and this creates opportunity for our farmers to create additional value from their milk.

“Fonterra’s high quality milk pools, our global supply chain, our manufacturing capabilities and knowledge, and our in-market sales and distribution expertise is being combined with a2MC’s brand strength to unlock new opportunities in a wide range of international markets. It is a win-win for both companies.

The agreement also includes an exclusive period to explore a2MC branded butter and cheese, and China sourced liquid milk for sale in Australia, New Zealand and China. These are currently not part of a2MC’s portfolio, but would complement Fonterra’s existing product range.

The parties are also exploring the option of a jointly owned packaging facility to cater for future growth in production.

Spierings added: “Consumers like to have choices and the growth of a2MC branded nutritional powders and fresh milk sales in Australia, for example, shows the potential. This partnership is all about finding ways to continue to delight our consumers and generate more value for our farmers.”