Milking market: Coca-Cola to launch double-priced dairy brand
US grocery stores will get a new brand of milk next month from beverage giant Coca-Cola. It will cost twice the price of standard milk, and the company expects the new product will be a money-spinner.
The milk called Fairlife will contain 50 percent more protein and 50 percent less sugar than standard milk, no lactose and 30 percent more calcium. According to the company, the milk will “rain money.”
“We’re going to be investing in the milk business for a while to build the brand so it won’t rain money in the early couple of years. But like Simply, when you do it well it rains money later,” Sandy Douglas, senior vice-president and global chief customer officer at Coca-Cola, said November 19 at the Morgan Stanley Global Consumer Conference, Seeking Alpha reported.
Douglas boasted the milk will “taste better and we’ll charge twice as much for it as the milk we are used to buying in a jug.” The way the milk is filtered will remove the fat and sugar, which will put it in competition with energy and protein drinks, and not just milk.
Since the 1980s, milk has been mass-marketed to America as something that strengthens bones, however a recent study published in the BMJ debunks this theory, showing that high sugar levels may not, as commercials claim, prevent osteoporosis.
Douglas said that test markets have so far been “amazing” and he expects the milk’s brand to take off.
The company has already created a joint venture with several dairy farmers at a time of record-high milk prices. In September, the national average price of milk was $3.73 per gallon, and for the first time since 2011 more expensive than gasoline. The biggest milk processor by sales, Dean Foods, has raised gallon prices by $0.30 after being forced to shut down several plants because of low demand.
Though expensive, the milk industry is struggling, as sales have been riding a four-decade losing low as milk has lost market share to other beverages, such as protein shakes and energy drinks.
The US Agriculture Department foresees improvements next year for the milk industry, which has been turbulent over the past twelve months.