a2 Milk sues ABC, but still lacks evidence

First published in New Zealand Herald 17 June 2015 

I wrote about the rise of the a2 Milk brand early last year.In March 2014 the company held 8 per cent share in the fresh milk category of the Australian grocery channel by value. Now they hold around 9.3 per cent with their premium-priced milk.

(IBISWorld Australia has them well behind the big four of Lion, Parmalat, Murray Goulbourn and Fonterra, with only 2 per cent total share of milk and cream processing, compared to the combined might of 78.2 per cent of those four producers.)

When it first launched, a2 Milk came in with a unique point of difference and created a need where there was none. They introduced some new words to the consumer vocabulary and suddenly people were talking about this A2 beta-casein protein we’d never before heard of but was supposedly better for us than an A1 / A2 combination. Cows were bred to produce only A2 protein in their milk. This commanded a premium price.

Whether that point of difference is scientifically correct is still inconclusive. a2 Milk always had challenges in its messaging. One of the main issues that their much-cited report was funded by a2, which never stood in good stead as a basis for independent evidence. Also the sample size was very small, with only 41 people recruited into the double-blind study.

After all, when the Parmalat CEO comes after a small business, as a consumer who do you trust? The little guy who claims to have discovered something that’s really good for you or the nasty big corporate that stands to lose millions?

However, word of mouth generated an impressive level of goodwill and the brand certainly rubbed some up heavy hitters the wrong way. The big milk conglomerates came out swinging, which gave a2 Milk a great publicity boost in the early days.

Australian consumers made their choice and a2 had a tremendous period of growth. They launched their baby formula, entered China and listed on the Australian stock exchange.

If you thought milk was boring there’s even a touch of Hollywood with Fairfax Media revealing recently that Parmalat engaged Tony Abbott’s former spin doctors to discredit the a2 brand. Then Lion rolled out their Pura milk brand with a new on-pack strapline that read ‘Naturally contains A2 protein.’ The plot thickens.

I’m sure a2 Milk is not expecting to win the legal battle against the ABC, if indeed it even goes further than angry letters from lawyers. The response is just a process and one that a2 Milk has always been very good at. They have punched above their weight both in the way the brand was developed and control of the message.

But now they’re not such a fighter brand any longer and have become a bonafide corporate in their own right. How they play this next hand is very important and, to be honest, some science and independent evidence wouldn’t go amiss at this point.

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