Western Australia’s oldest and largest dairy processor Brownes Dairy is planning to take on Eastern States-based rivals on their home supermarket shelves with a selected range of products.
With the blessing of new owners, Chinese dairy giant Shanghai Ground Food Tech which bought Brownes in November, the company is planning a national market foray ahead of any further moves into Asia.
Ultimately though, Brownes Dairy products are destined for Chinese and South East Asian markets as a niche premium range, complimenting Ground Food Tech’s local products, Brownes managing director Tony Girgis said.
“Their (new owners’) mandate to us was effectively reinforcing our strategic plan anyway, which was number one in WA, then penetrate the national market with a compelling products proposition,” Mr Girgis said.
“Exporting is very difficult.
“The Chinese regulations are such that it’s pretty hard to deliver a special product that complies with all of their requirements and then you hit the distribution chain which is not fully evolved.
“They (Ground Food Tech) have their own brands which cater for the local market.
“They want to use Brownes as a premium brand, not just in China but in South East Asia where we’ve already been exporting so we are already familiar to a lot of people in South East Asia through milk and yoghurt.
“They’ve been very supportive of our plan of WA first, national next, then the world.”
Established in 1886, Brownes is the biggest of the three major milk processors in WA with between 42 and 43 per cent of the State’s dairy processing capacity.
It processes and packages milk under its own labels and for Woolworths and the A2 brand.
In July, it bolstered milk supply by taking on the State’s largest milk producer, the Lactanz aggregate of four farms at Scott River operated by Melbourne-based Australian Agribusiness Group, after Parmalat-owned Harvey Fresh said it no longer required the milk.
The move on national markets will begin this month with a premium cold-brew single-origin coffee, which is bottled and distributed by Brownes.
It was launched in WA as a first-in-Australia and Brownes has a contract to supply Woolworths supermarkets nationally.
The move east under its own brand will follow in March next year, again with Woolworths, but with yoghurt and innovative packaging as its point of difference in a market, Mr Girgis admits, is already very crowded “with lots of stuff on shelves”.
Another Australia-first, a fully recyclable squeeze-bottle yoghurt container developed by Brownes at its Balcatta processing plant over three years from concept to product launch in WA in September, will be its eastern markets penetration spearhead.
“We always had aspirations to take product across, the challenge has been to have a point of difference,” Mr Girgis said.
“If you go in as a me two or me three, supermarkets say ‘well I got plenty of those why do I want you?’
“We knew the product was first class, the innovative packaging was the bridge with the supermarkets to say ‘I think we’ll give it a shot’.
“The product lends itself to this because there is nothing else like this in the country.
“By bringing a product like this onto east coast shelves it will pull our (other) Brownes products over there - we’re not well known in the east.”
There are also plans to try again nationally with flavoured milk.
“The business did attempt to operate on the east coast many years ago, primarily with Chill flavoured milk and Shake ‘N’ Shake products,” Mr Girgis said.
“But we did it badly with no market support and it failed miserably.”
The company has learned from that experience, he said.
With Brownes’ Brunswick cheese plant about to restart production after three years, in the longer term consumer packaged locally-made cheeses may also appear in Eastern States supermarkets, Mr Girgis confirmed.
“We’ve got supermarkets crying out to us for locally-made cheeses,” he said.
Mr Girgis said a second cheesemaker has been hired at Brunswick.
He said there had been recent discussions on site with Ground Food Tech about further capital investment in the plant, which has received a $10 million upgrade to get it reopened.
Brownes plans to build a whey concentrator at Brunswick over the next 12 months to help cut its major waste product disposal cost from commercial cheese making.
“That will give us the ability to concentrate whey into a form that can be used as a feedstock for animals,” Mr Girgis said.
In the meantime, Brownes has a licence for two years to dispose of whey on a beef cattle property 200 kilometres east of Perth as a fertiliser.
Apart from innovation in packaging, moves onto national markets for its WA products had been facilitated by innovation in processing, Mr Girgis said.
Capital expenditure and planned expenditure on new technologies and processing equipment was designed to extend the “shelf life” of its products in supermarkets everywhere, he said.
“It’s becoming harder to just keep doing the same thing,’’ he said.
“We have to change the way we do business.”