That also involves several research projects focused on adults, infants and pre-schoolers.
A2 has found a lot of people who might normally be lactose intolerant were good with the A2 milk, Shanghai-based chief medical marketing officer Dr Julia Zhu said.
Doctors and friends and families of potential customers were the key word-of-mouth promoters for A2.
Zhu was the third person appointed to the Shanghai team when A2 started in China, highlighting the group’s attention to medical detail, China chief executive Scott Wotherspoon said.
He and Zhu were part of a 15-strong sales and marketing team visiting the central Canterbury operations of Synlait Milk, the maker of the A2 Platinum infant formula sold in China.
The group watched a process run at Synlait’s Dunsandel plant, from raw milk to the canning of the A2-branded infant formula, as well as visiting a milk supply farm.
It was outside milking time, but the group, many of whom had never been on a farm before, was able to feed the calves.
The visit gave them first-hand knowledge of the A2 Platinum story they could take back to distributors, retailers, customers and potential customers in China, Wotherspoon said.
“It is very reassuring for them to see it.”
The visit came just a month after the two listed companies extended their supply agreement for at least five years, allowing for increased levels to meet market demand.
A2 would be Synlait’s preferred customer with “favourable and commercial pricing” and Synlait would have exclusive supply rights up to a certain level and first option for certain levels above that.
“A lot of mums are willing to spend a lot of money on overseas-made dairy products and NZ is important in that.”
Dr Julia Zhu
A2 Milk Co
All of the Platinum brand infant formula was from Synlait and A2 also exported fresh milk direct from Australia.
Infant formula was now the group’s biggest-selling product with strong demand in both Australia and China.
Zhu said the A2 milk concept was not established in China when the company started business there so a lot of research and a lot of doctor and customer education were required.
“All the doctors we’ve met with are convinced about it now.”
A lot of work had been done to prove A2’s point of difference as a milk-based product, Wotherspoon said.
A year ago, A2 Platinum was a new and “hot” brand for the Chinese but now there was a great awareness and understanding of its benefits.
As well as doctors, A2 was also depending on the recommendations of friends and family.
In that, the early success of the A2 milk brand in Australia was important, Zhu said.
“We found that there were a lot of Chinese Aussie mums who were asked by friends and family in China about A2 milk and they recommended it.
“That was a springboard into China for us and we’ve built on that.”
With well-publicised issues around health and safety in the domestic dairy industry, NZ’s good reputation was very important for Chinese consumers.
“A lot of mums are willing to spend a lot of money on overseas-made dairy products and NZ is important in that.”
THE WORD: Synlait milk supplier Stuart Litchfield explains the computer technology of his milking system to A2 sales and marketing team from Shanghai.
Once back home, Zhu was planning a detailed public relations programme for distributors and retailers.
A2 sold the Platinum infant formula in about 1500 Mother and Baby stores serviced by 42 separate distributors.
Wotherspoon, who also headed the United Kingdom business for A2, referred to a recent visit to a store in Wuxi province which had been opened by a woman who had been a customer first.
“She’s got a lot of attention for that and for me is a classic partner for life. She’s got every new mother coming and that is where we win.”
However, most of the business was based on website trade.
“We’re in with the top players,” Wotherspoon said.
“That is the joy of a brand with a fast-growing reputation. They want to work with you.”
A2 began working with big website Tmall in July last year and with JD.com in September last year, selling direct to consumers as well as being with other emerging e-commerce platforms.
A2 took over direct control of sales and distribution in China in late 2014, taking responsibility from the then-exclusive distributor.
Total China sales in the year ended June 30 were $38.2 million, up from $4m a year earlier.
