By Kate Foreman
For the successful Fleurieu Milk Company collaboration and commitment to producing quality dairy products is the backbone behind 10 successful years in the industry.
Established in 2006, the dairy processor is the collaboration of three dairy farming families who came together to remain viable in a competitive market full of multi-nationals and companies focusing on quantity rather than quality.
“These three families came together knowing that if they continued the way they were going, they would to have to sell their family farms,” Sales and Marketing Manager, Nick Hutchinson told the 2016 Regional Summit in Mount Gambier.
“The only way to go was to innovate and try something different.”
Myponga dairy farmers, Barry and Merridie Clarke, Geoff and Louise Hutchinson and Chris and Karen Royans took the plunge and shared their ideas to form a business which now buys milk from four dairy farms.
Nick says by joining forces the families were able to provide an opportunity not only for themselves but for others in the region.
“The set up cost, licenses and registrations were expensive, so sharing these cost amongst three obviously helped,” he says.
“The farms hadn’t been profitable, and the banks weren’t going to loan them money individually, but by coming together it tripled their capital to invest and made it possible.
“Having three families also tripled their network… we were relying on friends to spread the message of Fleurieu Milk.”
Soon came flavoured milk and then about five years ago, the company took another risk in purchasing a yoghurt processing and packaging plant to further generate brand awareness.
However, challenges started to appear with the introduction of $1 a litre milk at Coles and Woolworths.
“It was quiet strange at the time because just after they introduced that, we were approached by Woolworths who wanted to sell our branded milk in their stores,” Nick explains.
“The automatic answer to us was absolutely.”
Fleurieu Milk had to decide whether to cut costs and compete with the bigger companies or stay as a premium product in a niche market.
They decided not to get caught in price wars and paid their farmers what they deserved.
“I personally believe this decision made right there five years ago is the catalyst to where we are today… it was etremely important to our branding and success,” says Nick.
“It was also at this point that we began to form a very strong collaborative relationship with Foodland and other independent grocers.
“We now employ around 30 people and are selling milk to over 600 outlets.”
Nick says now more than ever it’s important to form strong collaborations between like minded people.
“The last three weeks have been huge in the dairy industry,” he says.
“The general public are becoming aware of the effect these low retail prices are having on the producers. Although it has been extremely disappointing to see these large companies slash farm gate prices it has inevitably brought together local producers who have been collaborating without even really realising it.
“I think we can definitely push this further, we are all fighting the same fight about quality and the idea of farm to plate is more important, and a lot more viable for South Australia in the long term.
“Collaborative marketing it critical going forward, not just by working with Foodland to leverage our brand but by aligning ourselves side by side with other local producers and by trying to educate the general public on the exact same thing we all face.”
Fleurieu Milk Company is a Brand South Australia member.
Watch Nick Hutchinson speak at the 2016 Regional Summit