On the Run drives boutique South Aussie milk sales


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By Belinda Willis

Dairy farmers are tasting success in a growing number of boutique ventures with a leading light, the South Australian owned Fleurieu Milk, preparing to launch into 135 On the Run stores in the next few weeks.

The Myponga-based business was started by three local families when dozens of dairies facing tough market conditions were closing in the early 2000s.

Now, it is part of a brave new independent approach being embraced by SA consumers.

At peak body South Australian Dairyfarmers Association (SADA), CEO Andrew Curtis lists Tweedvale Milk in the Adelaide Hills, Udder Delights, Jersey Fresh, B.-d. Farm Paris Creek and Robe Dairy among others creating a new boutique world for local farmers.

Then there’s SADA itself playing its part in changing the dairy landscape.

Andrew says the industry group joined forces with a Mt Compass dairy farmer and a former MP to broker a deal to support local farmers with supermarket giant Coles in 2012.

As a result, Coles now sells local milk packaged and distributed by Parmalat Australia in Clarence Gardens as SADA Fresh – sending 20c/litre sold back to SADA.

“We use this money for education and projects, introducing kids to dairy farming, and working around on-farm practices such as irrigation efficiency,” Andrew says.

Dairy is now Australia’s third largest agricultural industry with about 230 dairies in SA producing nearly 10% of national production.

In April, 2016, many of these dairy farmers hit rock bottom with farmgate prices plummeting and feed costs rising.

Struggling major national processor Murray Goulburn slashed its price for milk sending shock waves through the industry, already reeling from supermarket giants selling milk as low as $1/litre.

There was a two-pronged fight back for SA farmers.

A major campaign was launched encouraging consumers to support local dairy farmers that Andrew says activated a 10% shift in consumers moving to branded local milk.

Fleurieu Milk are one of many local SA dairy producers helping support local farmers and provide consumers with more choice.

Growing numbers of dairy farmers also realised that a steady movement already underway from the early 2000s to create more independent, boutique brands could be a saviour.

Nick Hutchinson, the general manager of Fleurieu Milk Company, says the incredible support shown by Australians in buying locally branded and owned milk drove an upswell in his company’s sales.

“We had huge growth two years ago when the dairy industry really hit the media, the consumers became more aware and there was a big push to buy local milk where profits didn’t go to companies overseas,” he says.

“It declined a bit after the campaign but this has now stabilised and in the last three months we’ve had substantial growth.”

In two weeks the company, which now also has two other farms supplying milk and has launched a range of flavoured milks and yoghurts, will launch the brand through On the Run service stations.

Products are already sold through Foodland stores, IGAs and other independently-owned stores.

It is also planning to launch a new line of yoghurt celebrating unique, native plant flavours including Kakadu plum and quandong.

Nick Hutchinson, general manager of Fleurieu Milk Company.

Nick says the venture with Indigenous and SA-owned company Something Wild – that sources the ingredients – was a local job creator.

“The industry as a whole is evolving, there’s a push for long life and skim milk products and it’s extremely price competitive, for Fleurieu Milk we’re niche and that works for us,” he says.

While his business is on the Fleurieu Peninsula, about half of SA’s dairies are in the state’s South East, the rest are in the Adelaide Hills, Lower Murray, and the Barossa, with most milk still sent to larger processors.

Andrew from SADA says dairy farmers are facing fresh challenges with the drought creating feed shortages but believes the growing boutique approach will help.

“That’s the great thing about SA in the food space, we are innovative, our artisan brands like Udder Delights or Golden North ice cream all do well,” he says.

The SA dairy industry supports not only local farmers but local producers too, including cheesemakers.

He says Tweedvale in the Adelaide Hills was established in 1974 to process and sell milk and cream from neighbouring dairy farms in Lobethal.

While in the Barossa there’s a group of 14 dairy farms who joined forces to negotiate a higher, fixed minimum price with Woolworths that now sells their milk under the Farmer’s Own brand.

The Alexandrina Cheese Company started on the shores of Lake Alexandrina in 2001 while Alexandrina Farm sells its milk through the B.-d. Farm Paris Creek label.

Then there’s Robe Dairy on the state’s Limestone Coast – milking its own small herd of Jersey cows to produce farmhouse cheese, milk and yoghurt, using the latest and kindest of practices.

“We’ve had a growing number of those companies starting as backyard, kitchen operations to being significant businesses,” Andrew says.

A list of SA milk producers and artisan products can be found at dodairy.com.au

Industry in focus: Agribusiness

Throughout the month of October, the state’s agribusiness industry will be under the magnifying glass as part of I Choose SA.

South Australian farmers, producers, agricultural researchers and biosecurity workers are the lifeblood of our country communities and are big players in the state’s overall economic welfare. Read more stories here.

Visit I Choose SA to meet the people building business and industry in SA, and to find out how your choices make a difference to our state.

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