Alternative dairy brand A2 Milk is to ditch plastic bottles and switch to 100% recyclable cartons as part of a major new fresh milk processing deal with Devon-based Crediton Dairy.
A2 said the move to cartons was a first for a UK fresh milk brand, and reflected an increasing desire by consumers for “solutions to the plastic packaging problem”.
Research by the brand of 2,000 UK adults found that more than two thirds (69%) of milk drinkers would rather buy fresh milk in a carton as opposed to a plastic bottle, while 78% thought cartons were more environmentally friendly than plastic bottles.
The new one-litre cartons will start rolling out nationwide across A2’s fresh milk range from next week. They used 80% less plastic than standard plastic milk bottles, and were made from recyclable FSC-certified pulp.
“We have always been a pioneer and the introduction of our new sustainable cartons in the UK market is another first,” said A2 Milk Company general manager for international development Simon Hennessy.
Switching its fresh milk supply to Crediton would also help to “fuel growth in the brand” in the UK, A2 said, and comes as global revenues for the Auckland-headquartered business hit NZ$922.7m (£465.8m) last year.
The deal with Crediton meant the brand - which first launched in the UK in 2012 as part of a partnership with Robert Wiseman - would also see a change in its relationship with processing partner Müller, who will now only supply A2 with milk rather than supplying and processing it. French supplier Lactinov processes the brand’s UHT milk.
A2 posted an operating loss of £1.2m for the year to 30 June 2017, down from £1.6m the previous year, according to accounts filed with Companies House, with directors noting performance continued to “reflect the significant investment required to launch a new branded milk in a highly competitive market”.
However, revenues rose from £7.3m to £8.6m, and retail value sales also grew by almost £800k to £2.3m last year on the back of new listings with Asda [Nielsen/The Grocer Top Products 2017].
The deal comes as Crediton reported a 9.7% increase in sales to £68.5m last month for the year to 31 December 2017, driven by a combination of inflation in the bulk cream market and growth in its added value range. However, pre-tax profits slid £1m to £6m as the processor focused on the expansion of its iced coffee ranges.
“We are delighted to have entered this new supply partnership with A2 and look forward to helping it achieve its goals and diversify into new product areas and opportunities,” said Crediton MD Tim Smiddy.