Perfectly situated in the settlement of Myponga, South Australia, Fleurieu Milk Company has committed the last decade to reinventing the way consumers view their dairy products. Thriving from a collaboration between farmers Barry Clarke, Geoff Hutchinson and Chris Royans, along with their respective families, the company narrowed their initial focus to place a greater emphasis on quality rather than low cost.
“They were on the brink of having to sell their farms due to low farmgate pricing and increased operating costs, so they collaborated and formed Fleurieu Milk Company; that began operation in 2006,” says Manager, Nick Hutchinson. “Their plan was to target a niche market where they could compete on quality – instead of the price wars that were going on –producing a high quality, natural milk that there was demand for. They put a lot of effort into corporate social responsibility and community involvement, linking themselves with charities and local sporting clubs. They wanted to establish a company that was built on very strong ethics and morals.”
The company’s initial business plan required all three farmers to work extensive hours, running the farms by day, and bottling their products by night. However, they have since managed to streamline production following success of the company within South Australia, and have even found themselves expanding into other additional markets. “We’ve grown from producing nothing to producing approximately 130,000 litres a week,” says Hutchinson. “We’re buying milk from four of the remaining 10 dairy farms in Myponga and, hopefully, will be expanding that even further. Our vision is to buy all the milk in the area, and ensure that all local farms are sustainable long-term.
We’ve diversified our product range to include cream, flavoured milks, and five flavours of yoghurts. Without a doubt, a major selling point of our products is the freshness. Consumers want to know exactly where their food is coming from. With our factory being here on the farm, and the guarantee that the milk is getting to the shelf within 24 hours of the cow being milked is a major value adding point for us. We don’t want to add any gelatine, thickeners, or preservatives to our product. Our cream ingredients are only cream, we don’t add any thickeners or preservatives. Our iced coffee ingredients are milk, sugar, and coffee; there’s nothing else to it. To us, that is how our products differentiate from a lot of other dairy products.”
This year, Fleurieu Milk Company has seen a great deal of both physical and economical growth, partially due to increased media attention towards the dairy industry. “We’ve had 30 percent growth in the last three months,” says Hutchinson. “To accommodate this, there’s a factory extension going on that’s going to double our inventory storage room, double our cold room space; and offer new offices, board rooms and a reception area. Basically, a whole new factory is being built. We’ve also signed an export agreement with Australian Fine Foods out of Melbourne; this is going to make our products available to 24 countries throughout Asia – something we’re obviously quite proud of. We’ve also finalised an agreement with the Royal Adelaide Show and the Royal Agricultural Society to guarantee sole supply rights of milk to the Adelaide Showgrounds. For us, linking with the Agricultural Society is a great initiative, and will open up great branding opportunities as well. We’re also currently deep in negotiation with other well-known retailers.”
Hutchinson believes that Fleurieu Milk Company’s increasing export accreditations will certainly be beneficial for their future; they have also won a variety of industry awards and gained recognition through their strong organisational partnerships, placing a great deal of importance on supporting local, independent grocers. “In 2015, we won the South Australian Food Award for state regional businesses. Obviously, to be recognised as the best regional business in SA was extremely humbling for us. We were also inducted into the SA Regional Hall of Fame after winning our third regional award. After only 10 years of operation, to be put in the Hall of Fame was also very satisfying. We’ve also won a lot of product awards based on quality over the years. A lot those awards are based on our Jersey Premium Un-homogenised milk which is a popular, and well-known product.
To us, building strong relationships is critical. We put a strong emphasis on linking ourselves with Foodland and other independent grocers. We work extremely closely with them to leverage each other’s brands. This offers them quite a strong marketing opportunity to get consumers in their stores, as we don’t supply Coles or Woolworths. We want to promote the fact that we’re working with these independently owned stores and South Australian businesses as much as possible. We also work very closely with associations such as Food SA, Brand SA and Eat Local. These associations are critical to our success and play a major role in us moving forward and changing consumer awareness around local products. Our community involvement is quite high in the area. We’ve been involved in sponsorships and community events with as many sporting clubs and local church or school groups as we can. We also have a strong relationship with the Little Heroes Foundation. Fleurieu Milk partnered with them over five years ago. Part of the proceeds of all products we sell goes to them. Therefore, as sales grow, our charity contribution also continues to grow. This has now gone above $55,000 per year, which is something we hold very close to our hearts.
Currently, the battle between local dairy farmers and larger grocery companies is one that Hutchinson sees as a major issue within the industry. “Farmers and primary producers, as a whole are critical to Australia’s success; but they’re continuing to be squeezed due to retail price wars in the global market driving the value of dairy products down,” he says. “To me, the only way to overcome this is to continue to educate consumers and work with companies and organisations such as Food SA and Brand SA to educate consumers about the importance of buying local and trying to influence their perspectives on the perceived barrier of primary produced products. Obviously, the more consumers we can educate and convince to buy local products such as ours, the more sustainable farmers will be in Australia long-term. However, if Coles and Woolworths are able to continue competing so strongly on price and discounting the price of milk – to me, it could create a major issue going forward in the industry”.
Growing up on a dairy farm, Hutchinson had access to a great deal of industry knowledge. While pursuing his Bachelor of Business, along with his Masters of Business Administration (MBA), he also worked on the production line for Fleurieu Milk Company – a position that allowed him further access to the backbone of the business. Three years ago, he was offered a position in Sales and Marketing, which he was honoured to accept, and has continued to progress forward with the company to today. Going forward, his personal short and long-term goal is to continue to grow the company through the discovery of new market opportunities. He thinks it is critical for Fleurieu Milk Company to uphold their reputation for quality and community involvement, and is very thankful for the many devoted followers they have gained throughout their successful decade in the dairy industry. “As farmers and as a company, we’re extremely grateful. They’re definitely making a difference,” he says. “We’re looking forward to continuing to work to ensure dairy farmers in Australia remain viable going into the future.”