Thursday, October 21, 2010

Why you haven't heard about the A1/A2 milk issue

This quote from the book "Devil in the Milk" by Keith Woodford, wonderfully summarizes why most people have not heard about the A1/A2 milk issue...

"One question that people often ask me is why should Fonterra [New Zealand's largest dairy co-operative that markets over 95% of New Zealand's dairy production and about 45% of the world's internationally traded dairy products: they produce/sell mostly A2 milk] oppose A2 milk? The reasons are complex but they are encapsulated in a quote from Warren Larsen on the Four Corners programme:

'There's one thing in marketing you always need to understand. You never do anything that destroys the category. Nothing. And in this case, that's precisely what the A2 Corporation, in my view, has done.'

Stripping aside the marketing jargon, what Larsen meant was that promoting A2 milk would have to be done in a way that did not destroy the overall market for milk. A2 milk would therefore need to be marketed in a way that did not cast doubts on A1 milk! Clearly that would be a challenge!

The reason Warren Larsen argued this way is that although it is not particularly difficult for farmers to change their herds over to being A2 milk producers, it does take time. In fact it takes about two cow generations of breeding, and this means about 10 years. The important point here in relation to 'destroying the category' is that while such a change in the herds is occurring, dairy companies such as Fonterra still have to sell a huge amount of A1 milk. So from a dairy company's perspective it would be much easier if A1 milk was a non-issue. And once A2 Corporation started arguing that A1 milk was a health issue, rather than just saying that A2 milk had special positive attributes, then the knives were out on both sides."

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