2015 was a pivotal year for the non-dairy milk category with entries, exits and more consumers pondering the choices in the specialty milk aisle than ever before.
Last year, we brought you an in-depth look at innovation in the global milk market and got up close with two macadamia milk manufacturers, Jindilli and Patons, as they launched new products in Australia and the USA.
A year on, we caught up with both to find out if their products have performed as expected and what’s next in the world of macadamia milk.
Patons: Suncoast Gold shining bright
Australian manufacturer Patons launched its Suncoast Gold macadamia milk onto the Australian market in late 2014 with two variants – Original and Unsweetened. The journey began with ranging in 75 Woolworths stores in New South Wales only and selected IGA outlets. It performed so well that it wasn’t long before Woolworths committed to full ranging of the Original variant, while the other major Australian supermarket chain, Coles, picked up the Unsweetened variant for national ranging as well. Both variants are also stocked in a selection of larger independent supermarkets. The product has proven popular with early adopters and average weekly sales are on the rise.
With so many alternatives to dairy now available, it’s more important than ever for manufacturers to produce offerings that deliver on taste, and it seems that this is where Suncoast Gold really shines.
As Patons Head of Sales Tim Jarman explains, “So much of our growth is the result of getting our taste profile just right. Consumers love it and whenever we conduct sampling at trade shows or in store, the response is incredible. It sells itself once people taste it.”
So what is it about the taste that consumers like so much? According to Jarman, it’s the creaminess and versatility. “We constantly receive positive feedback about the creamy flavour. People always say it’s like a liquid macadamia and they love that. They also love that it’s a flavour that can be built on because it’s not overpowering.”
Jarman estimates that the leading use for the product is smoothies, followed by breakfast dishes. As the Suncoast Gold Instagram account reveals, it’s a product that inspires consumers and food bloggers to get creative in the kitchen, with plenty of amazing dishes lighting up the feed.
While Suncoast Gold’s progress in Australia is certainly pleasing, it is only part of the story. 2015 also marked the launch of the brand’s macadamia milk in the USA, and the expansion has been rapid. “The US now accounts for 50 per cent of our sales volume – it has performed even better than we expected. We’re now stocked in around 2600 stores across 28 states in this market, and growing”, says Jarman.
Jarman believes the maturity of the market in the US has been key to the product’s success there. “When entering the non-dairy milk category, consumers typically try soy milk first before transitioning to almond milk and then they’ll look for something beyond that”, he explains. “American consumers have advanced further along that trajectory than Australians. In the US, they’ve done the almond phase and they’re ready for something else and that’s where macadamia milk fits perfectly.”
Integral to Suncoast Gold’s US expansion has been the use of Tess Masters “The Blender Girl” as a brand ambassador. Masters is an Australian actor, presenter and food blogger with a huge following in the US. She recently fronted a satellite media tour for the brand, appearing on breakfast TV programs that delivered reach of around 10 million. Brand awareness has skyrocketed as a result, as has engagement on social media, with many other food bloggers getting behind the product as well.
Further north, Suncoast Gold macadamia milk is also making a name for itself in Canada. Currently being trialled by Canadian supermarket chain Loblaws in 400 stores, full distribution into all 2,200-odd outlets is anticipated if initial ranging performs well.
Suncoast Gold is made from Australian grown macadamias, and this continues to deliver a strong point of difference, particularly at trade shows. Jarman explains, “At US trade shows, we find people love hearing about Australia and the fact that macadamias are indigenous to Australia. Most people don’t know that. The farm-to-plate story resonates really strongly and Australian origin is highly trusted.”
So what’s next for Suncoast Gold macadamia milk? Internationally, Patons has Asia firmly in its sights, specifically Japan, Hong Kong and mainland China. “Japan is probably the more mature Asian market,” says Jarman. “Japanese consumers are ready for our product. In China, soy is still very popular and they’re yet to establish an almond milk market there, but we’re determined to introduce Chinese consumers to nut milks as quickly as possible. Australian origin is a very strong selling point in Asian markets – they trust our product.”
In terms of product innovation, Jarman says there’s an abundance of ideas on the drawing board, but they’re committed to proceeding strategically and ensuring optimal timing. “It would be easy to produce a basic chocolate, strawberry or banana flavoured mac milk, but that may not be what the market wants. We’ll be looking to launch two new variants by the end of this year in both Australia and the US, but our new product development will be very much guided by our customer base, particularly in the US where new trends emerge first.”
Domestically, Jarman says the next few months will be focused on bedding down their baseline to get it prepped for new offerings. “We want to drive regular repeat purchase among those consumers who already know us and attract new users to the segment,” he says. “Once that base is really strong, we will be perfectly placed to launch something new. As to what that will be, we’re looking at a range of options.”
Milkadamia: baristas and beyond
In late 2014, Jindilli Beverages launched Milkadamia in the USA. A macadamia milk created specifically for baristas, it made waves early, winning the USA’s highest award for excellence in product development for the coffee industry.
Milkadamia’s strength lies in the fact that it performs as well as cow’s milk in barista-made coffee – a sought-after quality that had eluded other nut milks. It produces a beautiful, velvety foam and its flavour complements the coffee, without overpowering it.
Fast-forward 18 months, and the Milkadamia story has many new chapters, with some interesting twists along the way.
Jindilli’s Chief Executive Officer Jim Richards says Milkadamia has performed beyond expectations. “Our barista formulation is now distributed in every state of the USA as well as Canada and Australia and occasional orders from South America,” he says. That’s a huge achievement for a business that started off selling and distributing its product directly to individual cafes. While Richards concedes it was a difficult way to build up volume, he would not have had it any other way. “Having that direct, personal contact with our customers was invaluable,” he says. “It was how we really got to know the market and café owners loved dealing direct with the producer. It was that hard work that eventually put us in a strong position to develop partnerships with third party distributors, which in turn has expanded our business dramatically.”
While the rise of the Milkadamia barista formulation has unfolded as hoped, what Richards and his team had not expected was the pressure they encountered to launch a retail product. “We had developed a niche product specifically for the coffee market, but almost immediately retailers began asking for it as well, particularly those in the health food sector”, he explains.
Jindilli heeded the call and the company’s product development team has now created two macadamia milks specifically for the retail market for use in smoothies, frappuccinos and cereals. Available in Original and Unsweetened variants, the first production run took place this month and judging by the reaction at recent trade shows, consumer uptake should be swift. “The taste is amazing. When we conducted sampling at trade shows, virtually every retailer in the US wanted to range it”, says Richards.
So what is the secret to the premium taste of these new Milkadamia retail products? According to Richards, it’s the raw materials – quite literally. “Most other nut milks are made by roasting the nut kernel before grinding it to a paste and then transforming it into milk. Ours is made from high quality raw macadamias. We haven’t de-natured them in any way and this delivers the most beautiful, subtle flavour.”
Richards says US research has revealed that millions of milk consumers are happy to switch from dairy to a non-dairy alternative provided the choice doesn’t present a taste challenge or force them to become an “earnest eco warrior”. Jindilli has tackled these requirements by making both the product and its branding palatable for consumers. “Our Milkadamia retail branding invites consumers to make a good choice for the planet, but it does so with a typically Aussie sense of humour. Our packaging features lines such as ‘Moo is moot’ and ‘Product comes from free range trees’, which we define as ‘trees supporting life, not trees on life support’. We’re looking forward to having some fun with this on social media as well”, he says.
Richards believes Milkadamia’s branding will be an important point of difference as they compete in the retail space. “With consumer demand surging for non-dairy options beyond soy, the category is experiencing double digit growth with new nut and seed milk products emerging all the time. Despite this growth, what we are yet to see is anyone building a really strong brand. The products all tend to look quite generic. There’s a real opportunity for us here – the category has matured to the point that consumers are ready to hang their affection for a product on some strong branding hooks.”
Distribution for the Milkadamia retail products will initially be in the US, however Richards hopes to bring it to Australia and Japan as well. “We’ll be presenting the product to Australian retailers soon. Once we’ve built up the barista milk volumes here, we will be in a good position to source a local manufacturing partner. Right now our milks are manufactured in the US using macadamias grown in our Australian orchards”, he explains. “But ideally we’d love to have it made in Australia for the Australian market.”
In the meantime, Jindilli is committed to continual improvement and has recently tweaked the Milkadamia barista formulation in order to simplify the ingredient list and make the taste even better. “Everyone is now looking for ingredient lists that are as short and natural as possible,” explains Richards. “We’re moving to an unsweetened formulation as that’s where the market is heading in the US and ours will be the first unsweetened non-dairy barista product available in that market.”
As to what lies ahead for Jindilli and Milkadamia, Richards says, “Our forward planning is extensive, ambitious and exciting. We are conscious of how macadamias can enhance people’s health, and there’s some really promising research underway in this area. We want to bring those health benefits to consumers across multiple product categories. We definitely see a future for our brand in the fresh milk segment and further down the track, we want to develop products that merge beauty with beverages. A macadamia beverage that offers beauty benefits from the inside out is something we want to explore.”
As 2016 gains momentum it will be fascinating to watch the macadamia milk story continue to unfold as consumers globally explore this dynamic category. We look forward to sharing further developments as they happen.