of course marketing isn't cheap in the us especially prime time oh I wonder f he has a big pay-check due if things don't work out or will the 20m cover that?
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I see that ATM is trading on the ASX under the unfortunate ticker of A2M. They may want to reconsider that one!
Nothing new in this article. The $20m spend - over three years - to grow in the USA was revealed in the half year results
From the article:
"In China a2 sold mainly through distributors, who received product from a wholly-owned a2 subsidiary. This subsidiary contracted Canterbury-based Synlait Milk to do the manufacturing. The a2 Milk Company also did some direct spending on marketing in China."
China doesn't cost much to service because they don't have to sign up and quality check any milk supply from China. All that is done in NZ. "A2 Milk China" is in essence just a marketing operation based on NZ milk.
The UK is a different story with milk sourced locally. Perhaps the lack of traction in the UK is becasue A2 don't have enough money to make traction (see below for my comparative costing of the US start up)?
I presume the US expansion will ultimately involve sourcing A2 milk from the USA. That cost will have to be added to the marketing cost. So it stands to reason that launching in the USA will cost more. So lets say A2 want to spend $NZ7m this year to get things started. That translates to around $US5.1m. So how to spend that?
1/ Buy a warehouse, in the outskirts of LA, say $US2m.
2/ Hire four sales reps: Pay 'em $40k cash with a $60k sales target top up payment. Add $30k for signwritten van for them to drive around in. Expenses for each sales rep $40k per year (fuel, out of town sleepovers). Total $US0.63m / year
3/ Hire a branch manager with some branch office support staff $US0.37m /year.
4/ Have some stock on hand to sell $US1m.
5/ Put up $1m for promotional purposes, including advertising.
Add that up and there is just $100k left to start scouting around for some A2 milk suppliers on the ground. I can't see much fat in the budget. Can A2 do the 'Conquer the USA' plan for this price?
SNOOPY
Snoopy - your ATM 'roadmap' was something like AU profits to drive UK growth, UK profits to drive China growth, China growth to drive US growth (something like that)
With that much spend planned for US big money being made somewhere in the world
Yes?
Still not sure how to best model the China growth plan? I am now thinking that China is more like a lucrative branch of Australasia as all the product is imported from NZ/Oz.
So I think the ATM growth model is more like:
(Oz/NZ/China) funds (UK) funds (USA)
Of course 'conquering the UK' seems to be mainly happening in the lower right hand corner of England including London. And conquering the USA might initially translate to conquering just California. So I am picking that UK will have to fund growth over the rest of the UK as well as the USA. Or maybe Australian growth covers the expansion into the rest of the UK? That is the money that Australia generates that isn't needed to develop China! The problem is $20m over three years for the USA is big money for ATM, but not big money for the task they want to do. All the future cashflow looks to be on a knife edge. Keeps me on the sidelines not buying. I wonder when the necessary upcoming cash issue will happen?
When ATM was 70c, the institutions balked at paying more than 50c for new shares. So with ATM arround 55c, I think 40c is looking likely. But wouldn't that leave you as a fund manager looking red faced if you paid 50c for the last cash issue? Perhaps that is why those institutions don't want to do it?
Big cash being generated in Australia? I guess so, but 'big' only in relation to ATM shareholder funds, not the road map that ATM have drawn out ahead of them.
SNOOPY
Who says there's a lack of traction there?
That's for sure, and not just "ultimately".Quote:
I presume the US expansion will ultimately involve sourcing A2 milk from the USA.
You're making quite a lot of assumptions about sales strategy, Snoopy. For example, I would think ATM will get deals signed with two or three significant retail chains before they start, rather than hiring sales agents to run around trying to sign up retailers.Quote:
So let's say A2 want to spend $NZ7m this year to get things started (in the US). That translates to around $US5.1m. So how to spend that? ...
I think they will play a patient game and just slowly build UK . USA they will push harder than Uk and china who knows what will happen there fresh milk looks promising. I think the history shows slow and steady or perhaps conservative is a better word. As before the future sp price is all on another market gaining traction. If your not patient then this company is not for you.
It was bull who speculated on a lack of traction in the UK. I wasn't claiming there was a lack of traction. I did note that managment said that nothing like $20m was being spent to get into the UK and China. So I was joining the dots, wondering if the budget to conquer the UK was a little light? I don't know the answer to my question.
I imagine they would ship in product into teh USA from NZ/Oz initially to get things started? While local suppliers are signed up?Quote:
That's for sure, and not just "ultimately".
Ideally, I think you are right. But supermarket chains don't have shelf space to waste on a punt. I suspect signing up one supermarket chain might be harder than driving four vans around the country. I imagine there would have to be quite a bit of point of sale promotion to get things moving. But I don't know. As you said Nt001, I'm speculating.Quote:
You're making quite a lot of assumptions about sales strategy, Snoopy. For example, I would think ATM will get deals signed with two or three significant retail chains before they start, rather than hiring sales agents to run around trying to sign up retailers.
SNOOPY
Looks like Milford has been selling plenty new notice.
It would actually be doing a great service to those of us who find these SSHs rather opaque if someone who is literate in these matters could explain exactly what they mean in layman's terms, with relevant figures and percentages. What's the net result? And is there a lot more such info to come? Presumably this is largely due to recent revelations about Milford?
A quick look at the Milford statement suggests that during the period covered (up till December), that company bought and sold roughly equal numbers of ATM shares, something over 8m each way. So on the face of it, it was neither a big net buyer or seller.
No, they will source the milk from USA, according to the company. They can quite quickly and easily test and separate A2 only producing cows from any dairy herd. Farmers have an incentive to do so due to the increased premium A2 pays for little added cost to the farmer. In fact I remember reading that ATM already has some suppliers lined up from there last foray into the states.
Supermarkets are already "wasting space on a punt" in the USA. A2 will be sold in West Coast Kroger, Safeway and Wholefoods this month, according to this: http://www.foodnavigator-usa.com/Man...ornia-in-April
So... really there is nothing standing in the way of their success in terms of signing contracts.
It sounds to me like Milford sold ~23m shares, lowering their holdings from 97m to 74m. NZ Super appears to have taken over the shares previously held by Milford? They state "On 31 March 2015, the Guardians of New Zealand Superannuation determined to become the manager of securities previously held for it by Milford Asset Management Limited pursuant to an investment management agreement"
Thanks for that, Blobbles. I knew I'd seen it somewhere. But Snoopy's next question might well be, assuming it takes a year or three for the California operation to generate decent profits, how is the company going to fund a rapid expansion across the US? Good question. It can't just sit around, so will this require a new capital raising?
My guess is that if the California operation succeeds, as seems probable, other operators across the US may be interested in replicating it in other areas. Regions such as Chicago, the Northeast and the Gulf states come to mind as being prime target markets. And as Blobbles says, procuring A2 milk won't be a problem, nor will finding outlets. The challenge will be to get the milk processed and packaged (not difficult in itself) and distributed and marketed by people who understand those markets and have the right infrastructure.
My guess is that a2MC might revert to its original sales strategy of licensing other operators with established track records in such regions to use the "A2" label and relevant IP, and just take a percentage on sales. No need to raise new capital or build facilities or employ a huge staff. OK, the company had some bad experiences with that formula in the past but will have learned from them. And the ex-Pepsi man should be able to put some good deals together, ensuring there isn't a big delay in expanding to other parts of the US. Just thinking.
Well, there's clearly some serious **** going down with Milford - a whole bunch of SSH notices released after market close before a very long weekend. It's clear they have lost the mandate to manage part of the Cullen Fund. With some of the notices, they appear to have also sold a few more than just those transferred back to the fund - this could be to cover client withdrawals/switches out of their other funds/kiwisaver, or just be part of normal portfolio management.......
Oh, I see the financial press have latched on to the mandate suspension story - NBR and Herald have shallow, minimalist reports online
Indeed there is, **** hitting the fan. The tarnished brand falling from grace, in this industry it's guilty until proven innocent, or so it seems. Judge Super has decided, passed down it's verdict and to heck with the FMA. Perception is everything, Milford moving to damage control. Are we on the correct thread?
Quiet day on A2M, some bewildered punters wondering why the stock went backwards. Check hotcopper for psychology insights, plenty there who bought knowing nothing, expecting a big pop. Good buying? Who knows, this is fickle and fraught, confusion reigns.
it will explain price drop i presume
Milford have proved themselves to be a team that can make a lot of money, but whether it is ethical or even legal is questionable. The minimalist reporting may be the government in damage control mode, moving funds away before the story breaks big time. They are certainly privy to more information than we are (having the FMA onside), so there could be a big story about to hit the papers. Looks good for them if they are out before the s hits the f.
Milford could lose its KS status like hulitch in which case funds will be distributed to default providers. Most would sell a2...too speculative. They wait until success is proven then buy after everyone else has. Xero is at good example. Most bought around the $30 mark
I tend to think positively here. Despite the deliberate downward pressure from two frustrated and stressed insto sellers, A2M still rose 10% this week on a ~2% turnover of shares.
As for Milford, I'm not surprised.
Yes that is true but those who did purchased around the late 20's early 30's. Tendency also to follow each other so that performance differentials align more closely given that investors can easily change KS providers and tend to do so based on performance even though this represents around only 5% of savers. Most providers tend to stay away from stocks that don't produce dividends despite "potential future dividends" they will buy after everyone else has.
if the FMA close Milford down as a KS provider I think there will be some wholesale selling of A2mc as this stock is transferred to other providers. Then I would see 40c....sorry
Do we actually know how many ATM shares Milford and the Super Fund each now have? How many of Milford's shares were being held on behalf of the Milford group, how many for the Super Fund and how many in funds created to hold shares on behalf of other investors whom Milford advises. Do we know any of this stuff?
The Super Fund's statement that it has decided "to become the manager of securities previously held for it by Milford Asset Management" does not imply any change of ownership or any intention to sell down those securities, just an interim change of management of them. The same applies to big stakes in other Top-50 NZX companies
If there is going to be any further divestment, at least this will be in a much bigger market than previously, and both Milford and NZSF will presumably be more interested in selling gradually for a decent price rather than just dumping ATM shares on the market at a big loss.
YES
Milford previously held 97,877,776
Milford now holds 74,272,862, a change of 23,604,914
They have transferred 23,263,857 back to the Superfund
they have sold 341,057, since the last declaration
As we have seen recently Inst's are more concerned with investment mandates than they are with disposition or acquisition at any particular price. If shares don't fit within their investment. Philosophy then they get shovelled out the door until they have gone. AMP happy to let them go at lows 40's! Expect that to happen if Milfords get redistributed to default providers IMO.
Thanks Xerof. That part I understand. But I can’t reconcile that with the NZSF’s SSH which says that following the assumption of direct responsibility for securities previously held for it by Milford, its stake in ATM has NOT INCREASED but has DIMINISHED by about 5m shares.
It states that in its previous SSH dated 3 November 2014 its ATM stake was 41,344,622 shares or 6.264%, comprising 2.799% held directly by NZSF and 3.465% held for it by Milford.
But in its latest SSH dated 31 March its stake following the sacking of Milford is now shown as 36,888,681 shares or 5.589% of ATM.
How does this tally?
Just to confuse things further, ATM has declared to the ASX that as of 20 March (a fortnight ago) the NZSF held 37,848,680 shares or 5.98% of the company. And it did not list Milford at all among its top 20 shareholders (above 3.7m shares).
It listed TEA Custodians, known to be a custodian used by Milford, as being in 11th place among major shareholders, but holding only 16,153,397 shares, or 2.55% of ATM’s capital. Mind you, 33% of the company’s shares were shown in that declaration as being held by nominee and custodial companies, and there seems to have been a major rejig among them in the past few weeks, so a lot of what we’d like to know about the top shareholders in ATM remains hidden.
I would suggest the decrease has everything to do with the AMP selldown since November.
I would also suggest that ATM would not know the status of each nominee, in terms of who holds 'beneficial' ownership.
You'll drive yourself batty trying to reconcile....best to accept the SSH notices as the truth, and ignore Top 20 lists
Supermarkets are already "wasting space on a punt" in the USA. A2 will be sold in West Coast Kroger, Safeway and Wholefoods this month, according to this: http://www.foodnavigator-usa.com/Man...ornia-in-April
So... really there is nothing standing in the way of their success in terms of signing contracts.[/QUOTE]
Supermarkets do not waste space on a punt. If a2 have secured shelf space they will have paid for the privilege.
looks like the big funds are selling still not just amp
ATM have two different announcements today. One for the ASX and another for the NZX. I would have thought that any anns would have been the same for each exchange. Does anyone have knowledge of the exchange regulations.?
Is it just me or did the chairman just drop a whole lot of dosh on the company he chairs.
I don't mind being in companies where management literally put their money where their mouths are.
It's just you blobbles......
He has been granted free options under the long term employee scheme. A pity they don't announce the terms and conditions - has anyone seen them? But, in short, no immediate cash to the company. He needs to mainline on on-market purchases of ords to gain any respect (from me anyway)
Edit: from an older notice, exercisable at .63 cents (AUD I presume)
One could argue from a perspective of good practice governance, that the Chairman is not an employee of the company and therefore not entitled to employee share/options scheme. The Chair and the Board are effectively employed by and report to the shareholders to set strategy and direct the management in making and achieving business plans, to return wealth to the owners. The Board also decides who is granted options, loans or shares, hence on various levels there is scope for conflict of interest. Nevertheless, this blurring of the lines of ownership, governance and management seems rife in NZ listed companies.
Don't really seem to have been issued as an 'incentive' but as payment for doing stuff
"The Options have been granted pursuant to the Company's new Long Term Incentive Plan, to remunerate Mr David Hearn for services to be provided as an executive/director of the Company's UK subsidiary and an adviser pertaining to the UK"
Bit of a recent lift in the UK ‘a2 milkometer’
Market re-launch exposure, the new internet advertising, and Danny the rugby guy perhaps. Well and/or sales growth providing a complimentary increasing interest in online activity also.
http://www.google.co.nz/trends/explo...m&cmpt=date&tz=
Looks like all the excitement and exuberance of last week is all over.
Business as usual by the looks of it, and that's not all that flash.
Good fun while it lasted though
Interest in the A1-A2 issue is growing rapidly in India, the world's biggest dairy-consuming nation, and both national and state governments are under increasing public pressure to pass legislation banning the breeding of cows with the A1 gene.
According to this story from the influential Times of India, Indian scientists are about to launch a major multi-institutional research project to verify claims that milk containing the A1 gene carries health risks while A2 milk does not.
http://timesofindia.indiatimes.com/c...w/46845039.cms
India's native cattle breeds were once all pure A2, but extensive inter-breeding to increase milk yields has resulted in the almost complete disappearance of pure native stock from which herds of traditional A2 cows could be rebuilt.
This research project could raise some interesting issues regarding a2MC's patents on the technology for identifying A2 cattle. But it's all in a good cause - it could produce verfification from independent researchers that A2 milk has multiple medical advantages, and that A1 milk carries medical risks.
Er, did someone say Fonterra exports dairy to India?
Notice when someone sells 100,000 at 54c, it is quickly replaced by another buyer of 100,000 at 54c. Three times in half hour.
http://www.hotel-industry.co.uk/2015...ghts-for-2015/
Glad a2 will be there, not a price-sensitive news but uplifting :)
If you wanted to buy a 1,000,000 shares as an example at 54c , you would buy them in smaller 100,000 lots at a time. If you plonked 1,000,000 on at 54c it could push the price up too much, and you don't want that to happen if you are still in buying phase. That is my theory anyway.
Generally if an insto or individual has a large order they will not "show their hand" to the market and thus drip feed the order into the market. This is what may be happening with the share price at 54 cents. You see this sort of trading pattern often in the larger liquid stocks like SPK etc as well.
Newbie question for the day.......... can one buy shares on the ASX and trade those same shares at a a later date on the NZX (or vice versa).... if so what is involved (I ask primarily as I see there is quite a price differential for Infratil shares between the ASX / NZX..... ?)
Just curious really.
In Aus at mo. I see that Dairy farmers are still selling milk with "naturally contains A2 protein" splashed all over the milk container.
Initial enthusiasm for A2M being clobbered by the big sellers who have to be more than just AMP.
As predicted the Aussy SP will go to the 0.49 to 0.52 range until success is proven in sales volume in target markets. Success is reflected in current price premium waiting for confirmation. Sellers are either de risking their portfolios or are losing patience/faith. It's quite a difficult concept to grasp for most people so I expect slower progress than what I initially expected. It will take scientific proof and anecdotal evidence in the media to really getting traction.
An interesting summary and read with some good snippets, and a US launch announcement next week;
“A2 milk's UK sales are forecast to double in the second half of this financial year”
“The A2 Milk Company is also promising to expand its Australian market range into ice cream and cheese in the next 12 to 18 months”
"We are talking to Norco and others, said Mr Babidge, who forecast the A2 cheddar cheese launch to follow next year, with other cheese lines being considered, too”
“The A2 Milk Company has been developing a strategy for next week's North American launch for about 18 months, signing on farmers and a contract processor in southern California to release an A2 bottled product of just under two litres in volume”
http://www.farmonline.com.au/news/ag...px?storypage=0
Thanks MAC, that's a very good read, which gives an excellent overview of where things are at in a2MC's main markets. Pity we're going to have to wait another couple of years for real action in NZ.
Among other things, it's very reassuring that supply of A2 milk by farmers is not a problem.
There've been reports out of Australia recently that mention lactose intolerance is proving a significant marketing issue for fresh milk exports to China. These reports don't mention A2 or the possibility that many consumers would in fact find A2 overcomes that issue, but obviously the word is likely to get around gradually just as it did in Australia, especially with A2 having already moved into a market-leading position.
I'm encouraged most by the FY growth forecast they've provided for the UK, clearly thus the re-launch strategy would be confirmed on that basis, some good traction, and a steepening of the revenue curve. Confirms what we have seen in my UK ‘a2milkometer’ also, nice.
I just have a feel too NT001 that Californians will really take to a2 very well, that's not based on any particular point of market research aside from the notably open health conscious population and the similarities in lifestyle and trends to Australia, more so than to Europe or the UK.
And, although we don't have direct access to the market research a2MC have performed, the vigorous approach they seem to be taking in launching four products at once and directly into three major supermarket chains perhaps shows the potential a2MC see in California.
For an investment of just $20M we could well see another Australian size market develop over time. Three years to break even is enough focus for now though.
I'm interested too in that they have sourced the US CEO, Jeffrey O'Neill, from Pepsi for a couple of reasons;
Most exec appointments over the last couple of years have come from Campbell Arnotts, they could have kept the club going in the US also but they instead took Jeffrey from Pepsi.
Coca Cola are launching a premium milk product also, it is not within the same target market as a2, and thus won't be direct competition, and social media are already calling it "frankenmilk".
I just wonder speculatively though if a Pepsi product may also launch also, where one goes the other tends to follow, and executive connections between companies often spark discussion around opportunities and M&A.
"Frankenmilk"..? That sounds like a competitor's dirty trick.
Yeah, a2MC and Coca Cola are both getting some exposure,
http://www.fooddive.com/news/new-pro...dustry/380627/
No, it wasn't a competitor's dirty trick. The label was pinned on the new Coke-milk by the media and nutrition commentators when its launching was announced, because it isn't real milk at all. Coke makes no secret of the fact that it is put through a series of filters that remove parts of the real milk, and then various additives are added that further alter the nature of the original milk.
None of the cafes I have been to in Brisbane offer coffee with a2 milk. Most have never heard of it. Even in Paddington which is considered to be a little more health conscious/ trendy the barista said they do not use it because it's too much like water! I think basically it's just a question of the more people ask for it the more likely cafes will try and meet the demand. I think it is also a cost factor. As long as people are not walking out because the cafe does not use a2 milk then they will continue to use standard milk.
encouraging articles MAC. USA looks as though it is heading in the right direction. Nothing in those news items to suggest premium built into the SP currently is unjustified.
At Coles in Towoomba this afternoon. A2 selling as much as any other milk, expiry date 20th April. The blue top is so creamy and tastes great on breakfast cereal.
Head north. We visited Cairns and the Daintree last October, and there was A2 in every supermarket and store. North of Port Douglas there were a couple of places that seemed to stock nothing else.
Doing a bit of see weeding in Milton/Auchenflower at local stores. Over a period of around 10mins at an IGA store Sunday night a2 trim was discounted to $2.49 from $4.99 for 2L but expiry 14th April. None went except a 2L a2 full cream at full price expiry 16/04!
Quite surprised to see Paul's zymil 2L exp 16/04 going out at $4.75. Non permeate "organic" at a faster click than a2.
Good on you Harrie! Keep it up, promoting a2. I am thinking of printing out a new flyer as my supermarket handout. If anyone out there has some extra tips or suggestions for my flyer, I would appreciate it. As for that milk expiry date of 14th, only 2 days to go from Sunday, if that was in my shop where I buy it, I would tell them to take it off the shelf as it has been there for nearly 2 weeks. It starts going off in the last 2 days. But still keep up the good work Harrie.
No messing about with the US roll out:
“A2 Milk sends out first shipment to local grocers”
“Once the products have been verified to be in stock, that’s when the advertisement campaigns can begin. That will include television commercials, magazine ads and coupons”
http://www.examiner.com/article/a2-m...-local-grocers
Good info MAC!
Seems there are about 30 Wholefood stores in Southern California... probably about 20 for Northern California where there launch. Ralphs looks to have about 20 too, Albertsons seems to be based in Southern California. So I am guessing about a 50 store rollout in the US. That probably represents about 1/4 of the NZ market or so as an estimation. If they start selling though, that could easily balloon to 500 stores pretty quickly providing they have the supply.
(Although in saying that, Northern Calif has about 14m people, so it puts a hell of a lot more than the population of NZ within reach of A2!).
Thanks MAC. After the conflicting dates previously indicated, it's great to know the rollout has actually begun. It'll probably take a few weeks of gently testing the processing, packaging, delivery and retail sales systems before they go full-blast, and I imagine they're still signing up farmers.
The article on the Examiner website is a good one - it explains clearly and correctly (and favourably) what's unique about A2 milk. And presumably it was free - remember, it was media coverage rather than paid advertising that got the Australian market going, although it took time. California is a huge and health-conscious market.
Strange, though, that there's been no corporate announcement in either NZ or Australia of the US launch, which makes me wonder about a2MC's PR policy, or lack of it. It raises the question whether a2MC's bosses have any interest in boosting the SP and generating consumer interest here and in Aussie.
We should then get a couple of months of preliminary US revenues within the FY14 year too, they’ll only be very small of course, but still something to crow about, and rightfully so I reckon, it takes a lot to set up a new geographical operation, and a2MC seem to have done so quicker than many anticipated.
Just needs a health minded Hollywood celeb or two to start banging on about a2 and it’s all up and away.
Mate I hope they are just too busy rolling product into stores and doing instead of talking,I like that.
An announcement(to shareholders) is good,but it only serves the purpose of letting us know where they are at,I'm happy they are doing what they say.
We have you and MAC as excellent posters to keep us in play with this sort of stuff.
Yeah, come on, Zooey Deschanel and Billy Bob Thornton are both apparently intolerant to dairy! Give 'em a 100k and a years free supply for an advert!
Dead right.
just look what Kate has done for the Trilogy price...up 25 pc in 3 DAYS plus a speeding ticket from NZX.
I saw something strange at Coles today but didnt have time to investigate.. a2 had a whole new shelve area seperate from all the other milk, it was about 3 or 4 times the size of their original space (which they still retain) and had only 2 bottles of milk left in the whole new area! At a glance it seemed as if they had a big sale, however its not typical to shift other products around for a once off sale. What really tickled my thinker was - their original spot looked as it normally does and was more or less fully stocked... perhaps i caught them in a transition to a new area such as the "specialty milk area" per the UK strategy... anyroads i will keep y'all in the loop.
"If you are lactose intolerant or have a cow-milk allergy, a2 Milk isn't for you. That's because a2 Milk isn't medicine, it's milk, and it will sell for $4.50 per half gallon (whole, reduced fat, low fat, and fat-free) at Whole Foods and Ralphs stores in California as well as at some independent California grocers. If a2 Milk catches on, the company hopes to go nationwide."
http://www.nbcnews.com/health/diet-f...dustry-n339586
Good article thanks mayday. Good to see the big media providers educating the market before a2's launch. One thing i would like to see a2 push a little more on the education front is the "all mammals including humans produce a2 milk - except some cows". A qr code on the bottle linking to an educational video on a2, explaining the difference in lehmans terms, would be pretty easy eh??? I dont feel theycan pack enough info into a 30sec tv add. Here you go "Everything you need to know about a2 in 3minutes" - maybe i should make a demo and send it through to a2 - see weed can direct it ;)
Here is one for you see weed. Back from Aussie now and went to find a2 milk at pak n save. They don't have it in Riccarton which is one of the biggest stores in ChCh. I decided to make an email complaint to the store manager saying that as I prefer this milk and can only get it at countdown I am forced to do the rest of my grocery shopping there.(white lie to get some reaction) Got an email back straight back which amazed me. Not only do they not stock it, he was not aware of the product at all and is getting his Dairy Manager to track it down.
Granted , small market not to get obsessed by lack of supply, but just "another brick in the wall" to build awareness.
You guys worked out yet whether share price being driven by NZX or the ASX?
Whatever, both sides of the Tasman don't seem that keen
I think volume has definately risen since the listing,and is probably driven from Aus,otherwise why the lift in vol.
I think to say punters aren't keen is a bit premature don't you think,until there is some traction in new markets why would you go driving the price up. The investment doesn't change just because its listed in Aus as well.
notice the intl crossings pre market, suggests its def driven by the ASX
Big distribution happening at around 54 cents. Only time will tell whether the buyer is bigger than the seller. If they are, we will see another crack at the major 58 resistance.
The word from California is that A2 milk is already on the shelves in over 1500 outlets there including WholeFoods, Ralphs and Albertsons. At the moment a lot of it is being sourced from the midwest, pretty well bang in the middle of the US, which is a long way from California. I guess that's because the company's original unsuccessful foray into the US was centred more in that region and there would be farmers who switched their herds to A2 at that time. Farms in other states are also being lined up.
At present the milk is being processed in New York state (yes!) before being transported to California, although I'm sure that would be just a temporary arrangement for commercial or technical reasons to enable a2MC to speed up its retail launch. No problem about best-before dates, as its shelf life is weeks, not days apparently.
I don't have any info on how sales are going, but A2 is certainly being talked about, including by nutritionists who are concerned that a lot of young Americans are missing out nutritionally because they have problems with supermarket milk containing A1. It sounds all good. Pity the company isn't telling us more - it's already beginning to sound like a real NZ success story in the great US market.
That's all good news NT001, well done and thanks for sourcing that info for us all.
Presumably the long run herds will be centred on and around Colorado. Still any early kick start initiative has got to be a good thing, and the early initial startup sales would start from a low base anyway whatever the origin of the milk and location of the farms.
There must be very good and sound market research on California to make the logistics attractive even if it is just short term.
Odd that a first US sales announcement has not been made yet by ATM on the NZX and ASX, perhaps within the next couple of days ?
1500 stores!!!? Are you sure? That seems a bit high...
If they sold 10 a day per store... 165 days to FY reporting... ~2.5m bottles @$2 USD per bottle after COGS... $5m USD or ~$6m NZD FY?
1500 stores seems high though, I thought they were only going into Northern California to start with?
It does seem a bit high, but entirely possible. Will be nice if its accurate :-)
I remember looking up that in the entire US there was:
Kroger stores = 2640
Safeway stores = 1335
Whole foods stores = ~400
So 1500 stores would mean roughly 1/3 of all possible stores in the US given current supermarkets signed up. Does seem a bit high...
1500 stores @10 bottles per day @$4 makes for a nice revenue figure per year of ~$22m. Get that marketing out there! Zooey, where are you???
Sounds like we are off to a great start then. I would expect US Facebook page to be set up pretty quickly similar to what they have done in UK. It's interesting to look at posts from time to time to get customer feedback. Have to say, ATMs announcements have been pretty lame with contradicting stuff around launch dates. At least they are ahead of the curve.
10 bottles per day per store sounds optimistic for launch, would be nice to get up to that level by the end of the year. I think my local countdown sells about 2-3 bottles a day.
I seem to remember reading that quite a few outlets are independent stores, not just supermarkets. And I'd be surprised if any will be selling anything like ten a day at the start. It'll be a gradual buildup. But it sounds to me as though a2MC is planning to expand to other parts of the US quite rapidly. Its US CEO is highly regarded and has the experience and contacts to grow the operation pretty quickly. And since the milk is already being processed in New York, the populous and wealthy Northeast would seem like a logical target.
This story about the California launch has just hit my inbox. It doesn't say how many stores, but does say stocks were distributed as of just over a week ago. Media promotion should start pretty soon.
http://www.perishablenews.com/index.php?article=0043853
Mud West to New Yurk to Cali-forn-i-a ?
Either that milk flies more than I do or it is sold as yoghurt.
Attachment 7284
Best Wishes
Paper Tiger
http://zeenews.india.com/news/health...s_1572910.html
My have been posted before by NT001 but interesting.
Some major discreptancies going on here between posters, media and a2! North California or South, would be a great starting point to getting the facts right (posters and media). I think Ill wait for the official communications before throwing wild assumptions out there (i do appreciate your tip off tho NT0001). However i also wonder whether there will be an official communication? a2 have previously stated when and where the launch will take place.
Does anyone know anything about handling costs and wastage in the supermarket business?
I don't, but my guess is that this is probably not a big issue in the overall scheme of things. It seems that a2MC wanted to get the California launch under way quickly, and a bit of temporary extra cost to achieve this (New York-California transport) wouldn't be a big problem. I'm assuming it won't be long before the processing/packaging is done in California as larger volumes are required, at which point the New York plant's output could be re-directed to the Northeastern US. California's a big dairying state with plenty of milk processing plants, but it could be that none were quite ready to take on the A2 job, which requires strict care in handling the A2 milk completely separately from other milk. Just my speculation but it seems logical.
In this present stage a2MC wouldn't have big volumes to transport and put into stores, and given that the product has a long shelf life, wastage shouldn't be an issue for the stores or the supermarket chains. They would just order new supplies when initial deliveries have gone out the door.
A little while ago the company was talking about launching later in the year, and it seems this schedule has been advanced for some reason, which may have required a bit of innovative thinking. Speculating again, it could be that the recently-appointed CEO, being an ex-Pepsi chief with heaps of beverage experience, doesn't want to muck around with "small and gradual". My guess is that he wouldn't have wanted this job if it was going to consist of just introducing a minor niche product into a single state. So we could see things move quite fast. Hope I'm right.
A2 milk is still being advertised on Channel 4 in the UK. Are there any UK based forum posters who know if people are discussing it or are seeing a greater presence in shops?
Rugby World Cup this year
The English team have O2 emblazoned on the front of their jerseys
Surely Danny can organise big A2 logos on the back
Wow, great sponsorship
This item in the mass circulation Daily Express may partly answer your question, Bjauck. It seems to indicate A2 Milk must be selling, otherwise the Waitrose chain would be lowering the number of stores stocking it, not increasing it. And the Express regards it as worth a mention.
http://www.express.co.uk/finance/cit...more-A2-stores
Well yes, not to mention the anticipated doubling of sales in the UK as reported just last week.
UK sales in Q3 must have been strong for a2MC to confidently release that estimate for the FY.
“Already available in major supermarket chains Tesco, Waitrose, Sainsbury, Morrisons and via other specialist outlets, A2 milk's UK sales are forecast to double in the second half of this financial year”
http://www.farmonline.com.au/news/ag...px?storypage=0
The reason I asked is that I have heard how difficult the supermarket industry can be with costs,product ''real estate''(on shelves)-(obviously this would be cold storage) and how products make very small profit margins --hopefully the ex Pepsi chief can help in these matters (it would have been a real windfall if they were associated with Pepsi)
Meanwhile if it got a mention in one of those ''revolutionary new diet books'' it would be a real boost--(they like those ''monumental breakthrough'' sort of things.)