A2 beyond formula: Ireland’s Grass to Milk taps livestreaming route to market premium grassfed products in China

By Guan Yu Lim contact

- Last updated on GMT

With the UHT milk, the plan is to work with marketing firm Shanghai Supermom to help market the product. ©Grass to Milk Company
With the UHT milk, the plan is to work with marketing firm Shanghai Supermom to help market the product. ©Grass to Milk Company

Related tags: Ireland, China, A2 milk

Irish dairy newcomer Grass to Milk is using a hybrid of social commerce and traditional e-commerce to market its new A2-protein, grass-fed milk products as it seeks to make inroads to the lucrative China market.
The firm says it will adopt a mix of livestreaming, reviews and content across various social ecommerce platforms and traditional e-commerce for its two products, a UHT milk for all ages, and a children’s milk.

Dr Paul O’Brien, commercial director at Grass to Milk Company, told NutraIngredients-Asia: “We are a small brand and a new entrant, so we want to localise our strategy.

We're going to use a hybrid of social commerce, and standard e-commerce strategy specifically targeting females between 25 to 35 years old, because they're one of the key decision makers in making purchases for the whole family​.”

Some strategies include conducting livestreaming with key opinion leaders on video platforms like Dou Yin. Livestreaming is a popular channel which can positively influence consumer purchasing behaviours by reviewing products or acting as brand ambassadors.

The product will also be available on JD.com and Little Red Book. The latter operates like a marketplace/social media platform in which consumers can share their thoughts and feedback on products.

grass2milk children

For Grass to Milk’s children’s milk, the firm initially trialled this product in China last year to collect feedback, and is now improving its packaging and marketing to better suit Chinese consumers.

The children’s milk is standardised to a protein, fat and carbohydrate level which more closely resembles human milk, and is fortified with vitamins and minerals.

B2B collaboration

In addition to its D2C strategy, the firm also has a B2B strategy.

It recently collaborated with Bright Dairy & Food and New Zealand Focus to develop a UHT A2 milk product for China.

Through this collaboration, Grass to Milk will manage the production and packaging of the milk, tapping on its existing supply chain. The final product will be marketed by Bright Dairy.

Bright Dairy is a state-owned dairy company in China with a strong presence in the fresh milk space.

The product will bear the smartchain logo, a quality assurance identifier used by Bright Dairy on their premium imported products.

This product will launch in October, tapping on existing offline channels of Bright Dairy and New Zealand Focus.

New Zealand Focus is a business promoting New Zealand products, especially dairy, in China. They sell through a membership model using a mix of a proprietary app, WeChat groups, and Wechat shop.

Production

All of Grass to Milk products are manufactured and processed in Ireland, before being shipped to Germany where it is packed in 250mL formats to be sold in China.

O’Brien said it was impossible to package in Ireland due to the lack of a 250mL packing facility.

He explained: “In Ireland, everything runs through co-ops, so the farmers give the milk to co-ops, which are large dairy companies, who will then package in 1L sizes and sell domestically or globally​.”

In China, 1L sizes are often seen as a commodity, and a low value product, making it difficult to premiumise.

New generation of A2

O’Brien said the A2 market is poised for innovation in China, as players move beyond the infant formula space.

A2 has become fairly understood by not all Chinese consumers, but the ones with the biggest spending power, so middle class consumers that are looking for healthy, safer food that offers extra benefits​,” O’Brien pointed out.

Competition has been steadily increasing in the A2 infant formula space, however, and volumes have been decreasing.

The actual volume is decreasing because there's been a contraction in the birth rates, but we’re seeing growth in terms of value​.”

“We're seeing a lot of segmentation in the market now, beyond infant formula, such as UHT milk, yoghurt and more​.”

He added within the A2 space, organic, grassfed and ethical propositions have a lot of room for growth.

I think grassfed has yet to be promoted heavily out in China, although I’m sure it will grow in the future given the well substantiated nutritional, ethical and environmental advantages compared to other dairy systems and as consumer awareness, labelling and marketing improves​.”

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