AwaRua's three organic powdered milk products include Organic Mum2Be for pregnant women, Organic Toddler Plus for children aged three to seven (both fortified with vitamins, minerals, DHA and prebiotics), and Organic Whole Milk Powder.
The brand's milk is sourced from grass-fed cows on 15 farms in New Zealand under exclusive contracts.
Channelling changes
Speaking to NutraIngredients-Asia, Open Country Dairy's New Zealand GM Tonille Crombie said: "Our products are currently sold in New Zealand and Australia, and they're brought to China via the daigou platform.
"But we are seeking to launch in China by October this year, and looking at using cross-border e-commerce (CBEC) and general trade in China.
"We're considering major CBEC platforms such as VIP, Kaola, JD.com and Alibaba, as well as working with a local distributor who will supply our products to predominantly mother and baby stores."
She added that the firm had 'strong ideas' on its long-term strategy for China, but for the next five years, wanted to focus on building a strong presence in the country, both online and offline.
She also acknowledged Chinese consumers' low level of food trust — thanks largely to multiple food fraud, contamination and adulteration scandals over the years — and said that played a part in how AwaRua approached the Chinese market, especially with regards to traceability.
"We recognise that it's really difficult for people in China to obtain the food security they desire and trust the products they can buy, so we're really interested in providing products that put us on a level playing field with renowned brands.
"We have a unique QR code on the bottom of each can of formula, so buyers can scan it and trace the item — they can see where it comes from, as well as the test results that will assure them it is a genuine product that is safe to consume."
Despite infant formula continuing to be a major category in China, however, the brand is not planning to develop infant formula products at the moment.
"The market in China is actually very hard to crack for infant formula, particularly new formula products. Also, at this stage, we want to focus on products for which we can guarantee the supply chain," said Crombie.
"Ingredients for organic products are difficult to find, and we want to make sure the end-products we develop are sustainable.
“For instance, most of the ingredients for organic infant formula cannot be sourced in Australia or New Zealand, and our products will remain very much of New Zealand origin. So until we can secure a stable source (of the necessary ingredients) here, we won't be entering that category."
Covering the B2B and B2C bases
To support its expansion efforts, AwaRua is also working with Reach China, a cross-border brand incubator that helps to distribute products into retail channels in Australia, and engages the Australia-China Daigou Association (ACDA) to reach the daigou platform.
Headed by Mathew McDougall, who is also president of the ACDA, Reach China is AwaRua’s sole distributor in Australia, getting its products to supermarkets and pharmacies in the country.
Apart from distribution, however, the incubator is also responsible for education both consumers and business owners on the importance of organic ingredients and products.
McDougall told NutraIngredients-Asia: "We provide education for both Australian and Chinese consumers to appreciate the value of organic products like AwaRua's. We want to try to get them to understand why people would pay almost twice for organic products what they would for non-organic products."
To achieve this, Reach China conducts workshops for consumers so they can learn more about organic products and why they should care about them.
Beyond that, it also works with pharmacy owners and retail managers to get them to understand what 'organic' means and why it's important for their business and customers.
"Most people think of organic products as simply being pesticide-free, but there's much more that makes it a viable lifestyle choice.
“You can't just put an organic product on the shelves and expect it to sell — you need to support it with relevant information and materials in marketing, on social media, and in direct engagement with both consumers and business owners."
In terms of upcoming developments for AwaRua, Crombie promised a 'big NPD pipeline'.
"There is quite a lot of interest from consumers in products like UHT milk, yoghurt and liquid milk. But since we launched these three products just a month ago, we want to focus on their distribution and growth.
"We've also been in talks with distributors in Singapore, Malaysia and the UAE, where we intend to use a similar approach to that in China to bring our products to market."
