Brand loyalty needs continued support

By Ross McInnes, QDO Vice-President

The national milk sales figures for the period after the Murray Goulburn (MG) farmgate price cut were released last week. Since the initial MG markdown there has been a significant community and media campaign culminating in rallies in support of dairy farmers all around the country. The figures recorded by Dairy Australia confirmed what we had already been hearing – that branded milk sales had increased in excess of 20 per cent nationally.

Small processors in our region have been reporting sales increases of 30 and 40pc. While this initial burst of consumer support of the major brands has tempered, the campaign has clearly shown the power of consumer-led sentiment.

In the five-and-a-half years since unsustainably pricedmilk hit the market, the most common question for the dairy industry from consumers has simply been –“What brand of milk should I buy?”

The clear message has always been “buy branded” as this puts more money back into the dairy supply chain. From a financial point of view this has been quite easy, but from the quality side, the increasing requirements of supply into home brand tenders mean the ability of the milk processors to differentiate their product has become more difficult.

Branded milk sales have suffered since 2011 and the recent burst of consumer support has given processors a small windfall to offset these falls, however capturing permanent consumer support still sits at the end of the rainbow.

Queensland Dairyfarmers’ Organisation (QDO) and other industry bodies have put a lot of time and resources into the debate of brand versus unsustainably priced milk and the lack of transparency in the market place has not made it easy at times.

Consumers need to know their choice at the milk cabinet makes a clear difference on the farm. At the moment this line of sight is more blurred than it should be.

The Queensland dairy industry needs sustainable farms and sustainable milk processors, and that future is not guaranteed when executive bonuses are based on selling unsustainably priced milk.