The changing face of New Zealand dairy

The changing face of New Zealand dairy
South Island Dairy’s new facility, completed June this year, has a footprint of 3200sqm plus a large attached canopy under which trucks can park.

Blue River Dairy has been handling a challenge relatively few New Zealand companies face; dealing with growth at a lightning pace.
Last November the Invercargill-based company was announced in the Deloitte Fast 50, an annual index of businesses with the fastest growing revenue, as New Zealand’s Fastest Growing Exporter.
The producer of infant formula recorded an over-all revenue growth rate of 938% during the previous two years and during the same period its growth in export revenue reached an impressive 1058%.
The Chinese owned company also picked up Fastest Growing Agribusiness and Fourth Fastest Growing Company overall.
It is believed to be the first infant nutrition plant in the world to can infant formula products from three species – sheep, cow and goat.
General manager Robert Boekhout attributes the phenomenal growth to high demand, especially from China, for quality infant formula products manufactured in New Zealand.
“We have used this demand and a global shift to alternative dairy protein to significantly grow our business,” Robert says.
The demand has seen the company go from exporting 400,000 cans of infant formula in 2016 to nearly six million cans in 2018 and to be on target to reach double that this year.
A new blending and canning line capable of meeting this growth forecast has just been completed for Blue River Dairy’s new subsidiary, South Island Dairy LP, which is a completely separate entity to the parent company.
Blue River Dairy has been changing the face of New Zealand dairy with its production of cow, goat, and sheep milk nutritional formulas, Robert says.
“We recognised opportunities in the nutrition market across cow, goat and sheep infant formulas and rapidly geared up our production to meet the needs of our customers who demand the highest quality products.”

The changing face of New Zealand dairy
A South Island Dairy staff member monitors systems in the sterile environment of the new plant’s blending and canning line.

 
The company’s stellar success has partly been the result of a convergence of circumstances.
“We did something different on the global stage by originally manufacturing sheep milk infant formula.,” says Robert.
“It was the initial spark that got the company rolling.”
However it hit a hiccup and had to stop exporting its formula after the China Certification and Accreditation Administration implemented strict regulations that came into effect in May 2014 which changed the industry overnight by requiring infant formula to be registered.
This change in regulation initially threatened the viability of the business, but was followed by the purchase of the company in February 2015 by Blueriver Nutrition HK.
In addition to providing for a substantial capital injection, the takeover put the company in a favourable market position once it had been through the demanding new registration process.
The purchase also brought with it the expertise of Blue River’s chief executive Yuanrong Chen who has 40-plus years of dairy industry experience, as well as considerable business experience in China.
Its new owners were able to marry a product with great potential with very strong, established distribution and marketing networks in China.
The Blue River sheep milk infant formula range was launched in September 2015, and has carved out a growing niche, with sheep milk sought after for its digestibility and nutritional profile.
Blue River Dairy launched its premium cow-milk based range in January 2017, swiftly followed by its goat milk range in February 2017, providing parents more choice and launching the company on a trajectory of rapid growth.
Each range includes three recipes; infant formula for 0-6 months, follow on formula for 6-12 months and growing up formula for 12-36 months.
The Chinese connection has been crucial in understanding its legislation, consumer needs, rapid change in China and translating this information into an effective business model to meet the needs of the market.
“We wouldn’t have been in the same position if we didn’t have that connection.”
Despite this, Robert emphasises the fundamental principles of manufacturing high quality products, good market positioning, along with market and customer insights have always been fundamental to the business since its inception in 2003.
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