The Coca-Cola company is entering the dairy business by investing in Fairlife, which is due to launch next month.
Fairlife has 50 percent more protein, 30 percent less sugar, no lactose and will cost twice as much, according to The Guardian.
Sandy Douglas, Senior Vice President and Global Chief Customer Officer and President at Coca-Cola North America, expects it will “rain money” for the company, according to a transcript of a Morgan Stanley Global Consumer Conference posted on SeekingAlpha.com.
“The test markets have been amazing, and we’ve created a joint venture with a bunch of dairy farmers who are innovative leaders in the dairy industry,” Douglas said. “So you put that next to Simply [Coke’s juice line] and you have a nutrition beverage company with tremendous growth potential. Now to be clear, we’re going to be investing in the milk business for a while to build the brand so it won’t rain money in the early couple of years. But like Simply, when you do it well it rains money later. And we can deliver with our business portfolio before the milk comes on full profit line.”
Douglas said Fairlife is “a milk that’s premiumised and taste[s] better.”
Although Coca-Cola claims the milk comes from sustainable family-owned farms, the flagship farm is Fair Oaks Dairy in Fair Oaks. According to Trader’s Point Creamery owner Dr. Peter Kunz, that dairy has nearly 30,000 cows.
While Kunz said he is not against ultra-filtering milk and that it may even have some benefits, he is hesitant to use the process on his own product.
“The more you manipulate a product, the more you damage it,” he said. He said proteins were especially delicate.
He also expressed concerns about how Fairlife would be regulated.
“The idea of ultra-filtering it, which they are concentrating the protein by removing water and sugar, and removing fat as well, we can’t tell if it’s a grade-A product,” he said. Grade-A products are regulated under the Pasteurized Milk Ordinance. Kunz said he does not think the product is grade-A because it does not use some of the mandatory terminology.
Kunz said that the organic milk business has been booming, resulting in a sales decline of conventional milk: 20 percent over the past 8 years.
Fairlife is not yet posted on the Coca-Cola web site. There are no press releases discussing Fairlife, either. But the Fairlife web site features an entire section on how the product is already in schools.