Mooove Over Milk, Coke Enters the Dairy Market

Having claimed its place in the soda, water, energy drink, and juice markets, Coca-Cola now is going after milk. In a blog post on HoosierAgToday.com, Gary Truitt said the beverage giant is preparing a nationwide launch of Fairlife, a high-end milk, in 2015.

Coca-Cola and dairy co-op Select Milk Producers formed a joint venture in 2012, said Truitt, to develop “higher quality…health and wellness beverages,” particularly “value-added dairy.” Fairlife contains more protein and calcium than standard milk, and half the sugar, and it’s lactose-free. Initial prices run 65¢ more per quart than conventional milk.

Sandy Douglas, president of Coca-Cola North America, said the company expects the premium milk to “rain money” following extensive marketing efforts. That’s quite optimistic, considering that U.S. per capita milk consumption has been falling for decades. Euromonitor forecasts demand for milk products to continue dropping and U.S. milk production to contract as a result, which likely will take at least another six months.

The October Dairy Products report released earlier this month indicated a 54.1% increase in nonfat dry milk production compared to a year ago. While some of that was a shift from skim milk powder production, it shows a lot of the extra milk being produced in the United States is going into a form which can be stored for a considerable amount of time, according to BrownfieldAgNews.com. The site stated that the U.S. powder price is not competitive on the global market, so exports are down and milk inventories are building.

In the meantime, Euromonitor expects companies to offer more products fortified with nutrients like calcium or omega-3 fatty acids, like Fairlife, said Truitt. So if Coca-Cola successfully paves the way for brand-name premium milk, copycats are sure to follow, which could lead to greener pastures as dairy producers find new markets for their fresh milk. S