Cream of the crop: Bulla CEO Allan Hood on the sour cream production line at Colac. Picture: Mark Witte

Cream of the crop: Bulla CEO Allan Hood on the sour cream production line at Colac. Picture: Mark Witte

Dairy business creams Chinese market

How Bulla Dairy Foods broke into the Chinese market

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A struggling industry. A small town. That hasn't stopped this dairy business having a big impact on the world stage.

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Inside the walls of a stark white factory in the main street, as many as 500 workers finalise products for the world stage.

Colac, with a population of about 12,500, is a David when it comes to Goliaths like China and its 1 billion people. But through its Bulla Dairy Foods' frozen products operation, it has landed a giant-killing breakthrough.

Bulla's Colac products, including its iconic Creamy Classics ice creams, are now on Chinese supermarket shelves.

It's a ray of hope for the dairy industry - on which Colac and much of the Victorian south-west depends.

"We're pretty excited, this is something new and different for us," Bulla chief executive officer Allan Hood said.

"This is the start of our entry into China. It's taken us a while, about five years, to crack the Chinese market."

Locally made: Bulla Dollop Thick Cream fresh off the production line. It is the number one brand of cream in Australia Picture: Mark Witte

Locally made: Bulla Dollop Thick Cream fresh off the production line. It is the number one brand of cream in Australia Picture: Mark Witte

Bulla's frozen range will be sold on two online retail platforms and in Chinese stores.

"We're now listed on the biggest e-commerce platforms in China which is Alibaba's Tmall and JD.com. Then parallel to that we've been able to push through our bricks and mortar strategy which is really getting Bulla products into stores, both at a high-end grocery level and through convenience stores," Mr Hood said.

"Something like 800 million people use these platforms, it's massive for a Colac-based business to be listed on these two global platforms.

"It shows there's a very strong demand for Australian products, particularly with a focus on quality and freshness. Chinese consumers love Australian brands, they love our Bulla brand and the Australian story."

Bulla factory, Colac

Bulla already has a strong international presence, currently selling products in 19 different countries with major markets in Singapore, Hong Kong and South-East Asia.

International exports make up about 5 per cent of the company's profits.

Back home, it remains one of Australia's largest family-owned dairy producers.

Colac is the company's "heartland" with a frozen and chilled factory, as well as an innovation centre where the company tries and tests its new products.

"We like to call it the 'Willy Wonka' part of the factory," Mr Hood said.

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The Colac factories see about 40 trucks coming and going a day, bringing in fresh milk from farms and transporting products to their Derrimut factory.

The company sources its milk from about 150 suppliers, 100 of those which are from south-west Victorian farms. All products are made with fresh milk and cream all locally Victorian-sourced.

Two years ago the company moved to a direct farm supply system, buying and collecting milk directly from farms through a direct contract with the farmer rather than through a third party.

"Colac is our heartland, we've been in Colac for around 90 years. We employ 500 people locally and have about 750 employees as a total," Mr Hood said.

"We shifted to Colac for its rich fertile soil and flatter milk profile - the area is a rich quality source of fresh milk.

"The community has essentially been built around the factory, and we have a very strong connection with our local farmers."

Site lead for chilled operations Brad Donovan said many of the local workers are employed on a seasonal basis, with summer being the busiest season for the company seeing ice cream popularity skyrocketing.

"The chilled factory employment is more structured and stable, with around 140 people, whereas at the frozen factory there is a seasonal intake around November for the ice cream of about 300-350," he said.

Above: Improvement facilitator of chilled operations Mark Leach, Bulla CEO Allan Hood and site lead for chilled operations Brad Donovan with the final products ready to be distributed. Picture: Mark Witte

Above: Improvement facilitator of chilled operations Mark Leach, Bulla CEO Allan Hood and site lead for chilled operations Brad Donovan with the final products ready to be distributed. Picture: Mark Witte

"We do about 120,000 litres of cream here per day roughly, and then come peak period we're doing around 170,000 litres per day of bottled cream.

"The majority of Australia's cream over Christmas will come off these lines. The cream is put through the plant and processed within a 24 to 48 hour window."

While excited by China's growing taste for Aussie dairy products, Mr Hood acknowledged the challenges facing the local dairy industry.

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"I think there's a lack of trust in the industry and we want to bring that trust back through a transparent and simple pricing model," he said.

"The dairy industry has been through some challenging times of late, but if we are sustainable then we can do the best that we can to pay a sustainable and attractive farm gate price for our farmers so that they can be sustainable businesses."

Below: Bulla Farmers Nathan and Gerard McNamara at there farm in Colac. Picture: Mark Witte

Below: Bulla Farmers Nathan and Gerard McNamara at there farm in Colac. Picture: Mark Witte

Farmers Gerard and Jo McNamara supply 1.8 million litres of milk to Bulla every year from their 380-acre dairy in Colac and their son Nathan McNamara's 120-acre farm in Cororooke.

Bulla pays them $7/kilogram milk solids and collect in excess of 6000 litres a day.

"The dairy is being used 365 days a year every year, this is our second year supplying to Bulla," he said.

"I've got no regrets at all, they have been fantastic. We're getting paid a lot more now that we're on Bulla's flat payment structure."

He said the industry continued to face challenges.

McNamara farm, Colac

"Milk hasn't gone up enough in the last 20 years, it's not much more than it was 20 years ago and all the costs have gone up so much," he said.

"We could milk 120 cows years ago and we were making more money than what we are today. The money's not in it like it used to be."

He said it was a comfort to have a dairy giant like Bulla provide stable and regular income to the farm.

"It's a big incentive, it must be easier for Nathan to get out of bed early in the morning knowing he's going to make a dollar for the day," he said.

Nathan left school at 15 to follow his parents' footprints and pursue a farming career.

He said there weren't many young farmers left in the business, with many getting out because it's too hard.

"There's not a lot of younger ones my age in the dairy industry, I'm lucky that the family farm has continued on which makes it easier," he said.

"If the milk price continues to stay the way it is or go up a bit it sure does make things easier."

Gerard said those looking to get into the dairy industry shouldn't be discouraged.

"Definitely get into it, they've got to enjoy it that's the main thing. If they don't enjoy it then it's no good because you have your tough years and you've still got to work for very little," he said.

"But you do get your good years, weather wise and financially, so that's icing on the cake when you get those years.

"It's been a great life for us."

The story Dairy business creams Chinese market first appeared on The Standard.

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