Brownes Dairy to export chocolate milk to South East Asia

Western Australia's oldest and largest dairy manufacturer plans to spearhead an export drive into Singapore before the end of the year, then into Thailand and Malaysia, with its flavoured milk products and yoghurts made in Balcatta and its mature and vintage aged cheddar cheeses made in Brunswick Junction.

Chief executive officer Natalie Sarich-Dayton last week confirmed Brownes planned to grow its export operations with an expanded range of products selected to suit individual South East Asian markets.

The export products will retain their local packaging and English language labelling to reduce costs, to make them stand out in Asian supermarket and convenience store refrigerated display cases and to help build both brand and WA source awareness.

Brownes did not intend to simply re-enter the same markets with the same products it had before the COVID-19 pandemic shut down its export operations, Ms Sarich-Dayton said.

Prior to the pandemic, it had exported one-litre cartons of fresh milk to Singapore and a small amount of yoghurt into Singapore and Thailand.

It did not intend to export fresh milk any more because of difficulties and complexity associated with short shelf life and differing milk protein criteria for different markets, she said.

Ms Sarich-Dayton said the matched $1-for-$1 International Competitiveness Co-investment Fund grant announced by Agriculture and Food Minister Alannah MacTiernan last week, had enabled Brownes to bring forward its export expansion plans.

"Most of the export markets died because of the pandemic - there were no planes flying and dairy products really have to go by air because of the shelf life - so no planes meant no way of getting product to export markets," she said.

"Even now, air freight prices are something like three times what they were pre-COVID and once you come off the shelves, you pretty much have to start all over again with export markets - paying listing fees, marketing, all sorts of costs involved in getting products into retail outlets.

"David Wong, our general manager international sales, has just returned from a tour through Asia looking at what it is going to take to get back into some of those markets.

"Singapore is absolutely a no-brainer, it is a very Western market, there's a lot of expats (living there), Aussie travellers stop over passing through and the locals have high disposable incomes and they do love our product - they love fresh, Western Australian dairy products.

"We looked at the numbers, but there was absolutely no way (Brownes could proceed immediately) and then, literally three days after we had that conversation, we got the grant and that changed everything.

"Now we are going full forward to get back in there over the next six months.

"But without that grant we would not have been able to get back into the (Singapore) market this year."

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Brownes is expected to launch its export drive into Singapore at FHA Food & Beverage, Asia's largest food and beverage trade fair, to be held there on September 5-8.

"We were there four years ago and we will be back this year with a stand," Ms Sarich-Dayton said.

"Other markets we are keen to have a look at are Thailand and Malaysia.

"We were in Makro supermarkets in Thailand with yoghurts (pre-COVID) - they love our Greek-style yoghurt.

"We are trying to get back in because Makro are a major retailer in Thailand and the same group owns 7-Eleven in Thailand, so we are looking at how we can get our products into 7-Eleven there as well.

"Flavoured milk would be one product we look at for those outlets.

"Everything is about shelf life - the yoghurt, flavoured milk and packaged cheese have a very good shelf life."

Ms Sarich-Dayton said it might also be possible to ship those products from Fremantle to Singapore in five days, which could help reduce costs and make Brownes' products more price competitive in South East Asia, not only with local products but east coast Australian dairy exports.

Brownes' push into Singapore, Thailand and Malaysia will put it into direct competition there with some east coast dairy companies, particularly Bega Dairy and Drinks, which have been able to maintain some export trade during the pandemic by banding together with sufficient export product quantity to make chartering a freight plane viable on occasion to get product to market.

Brownes already competes on their home territory in the Eastern States with premium milk coffee, flavoured milk, yoghurt and milk in innovative environmentally friendly, recyclable unbleached Tetra Pak milk cartons made from plant-based material.

Also, Ms Sarich-Dayton said, an air-freight subsidy for some Eastern States manufacturers exporting into Thailand is about to end, which will help make Brownes' products more competitive, being closer to Thailand.

Ms Sarich-Dayton said the company had picked up two additional dairy farmer suppliers which will help provide the extra milk needed for the drive into South East Asia.

She said speculation Brownes was holding back surplus milk after it lost the Woolworths own-brand milks supply-and-package contract earlier this year, after seven years, to Lactalis Australia-owned Harvey Fresh was wrong.

"The reality is, we were rationing a lot of our own portfolios in order to service that account (limiting milk for Brownes brand products to ensure sufficient supply to comply with the contractual arrangement with Woolworths)," Ms Sarich-Dayton said.

"I had six months of rationing last year.

"Our brand has grown so well, we have really good market share in WA and we are getting our products into the Eastern States.

"We knew that our branded portfolio would be able to absorb that excess (that previously went into Woolworths' own brand).

"Their contract grew by one third over the seven years we had it and that growth came out of our branded product.

"Now, we need to make sure with what we are doing that we are working within what we can do at this point in time and then hopefully, when the market returns back to growth, we can unlock that potential," she said.

"We do love our flavoured milks in Australia - we are one of the highest consumers of dairy products in the world - and that love of dairy is what we want to export."