My suspicions that A2 Milk are doing well is proven correct. Check out this story from The Australian:
http://www.theaustralian.com.au/busi...-1226546274296
As supermarket price war continues, premium A2 milking success for all it's worth
WHILE dairy farmers and processors blame the supermarket milk price war for cutting margins to unsustainably low levels, one high-priced brand is raking it in.
Coles and Woolworths have been selling their in-house branded milk for $1 a litre since January 2011, driving a shift in consumer spending away from name-brand milk.
But A2 milk -- which sells for $5 for a two-litre bottle, a premium of 150 per cent to private label -- has seen its sales skyrocket.
"We've grown tenfold in the past five years, it's been phenomenal," said A2 Australia chief Peter Nathan, adding much of this growth has been recorded since the milk price war began.
"Our growth has accelerated in the past two years, particularly in the past 12 months, which has been our strongest period of growth both in percentage and absolute terms."
Figures from industry researcher Aztec National Grocery show two-litre bottles of full-cream A2 are now the most popular milk purchase in Australia, and the 19th most-purchased grocery item overall.Despite ongoing price deflation across the grocery sector and with milk in particular, A2 has held its prices steady. "Some of our branded competitors have reduced their prices in response to the price war, but we've maintained our premium price position," Mr Nathan said.
The milk takes its name from the A2 protein found in milk produced by a minority of dairy cows, which for some is more easily digested than the more common A1 protein in most cow's milk.
"We help farmers find cows that only produce the A2 protein and form herds with them, and people who say they can't ordinarily drink milk tell us they can drink A2 without discomfort," Mr Nathan said.
"There's a bit of a lactose-intolerance myth in Australia -- our research has found 25 per cent of people identify themselves as intolerant to dairy, but only about 5 per cent of those are actually diagnosed as lactose-intolerant, so we think the rest are reacting to A1." The A2 milk is also free of permeate, a milk byproduct from the cheese manufacturing process that has been used to bulk out whole milk in order to save costs.
Public outcry over news that some milk processors were adding permeate last year led major processors to phase out its use -- but Mr Nathan said the the damage to the brands was already done, all to the benefit of A2.
"We were always permeate-free -- it's allowable under the food standards code, but we believed consumers wanted to know what was going into their milk, and that transparency has enhanced the trust in our brand through that period," he said.
"For the brands that have taken it out, consumers want to know why it was there in the first place, so there's a degree of scepticism about those brands."
A2 also pays farmers a premium for producing A2 milk --a welcome relief in an industry squeezed by falling global dairy prices and the shift to supermarket brands.
"It's all natural and there's never been any permeate, and consumers are willing to pay a premium for that, so we can pay farmers a premium," Mr Nathan said.
"Consumers respond to a brand when they perceive they're getting value, but if they think the only difference is the label, they'll trade down to the supermarket brands."
A2 is listed on the New Zealand Stock Exchange, and last year raised $20 million in capital to fund foreign expansion.