Agropur launches ad campaign to keep milk consumers buying ’100% Canadian'
PUBLISHED OCTOBER 17, 2018
UPDATED 2 HOURS AGO
One Quebec-based dairy producer is waving the Canadian flag as it tries to defend its market against milk imported from the United States.
Agropur, maker of Natrel milk, launched the campaign targeting Fairlife LLC, a U.S. dairy brand distributed by Coca-Cola Co., shortly after Canada agreed to let in more foreign dairy products in the proposed North American free-trade deal.
“Is your milk 100% Canadian or 100% American?” the Agropur ad reads, beneath two glasses of milk respectively labelled Natrel and Fairlife sitting on coasters bearing the Maple Leaf and the Stars and Stripes.
Fairlife milk began selling in Canadian markets on Sept. 4, said a spokeswoman for Coca-Cola, which announced in June it will spend $85-million to build a Fairlife milk plant in Peterborough, Ont. The factory is scheduled to open in 2020, and will be supplied by Ontario’s dairy farmers. Until then, the Fairlife milk in Canadian dairy aisles comes from U.S. cows.
David Wiens, a Manitoba dairy farmer and vice-president of the Dairy Farmers of Canada, said the Canadian government granted the U.S. company a special permit to import dairy products to build its market ahead of the plant’s opening. “Our hope is this will create new markets,” he said.
Graham Lloyd, chief executive officer of Dairy Farmers of Ontario, said the group that represents the province’s dairy farmers has an agreement to supply milk to the plant when it opens in 2020.
“Coke has declared and it is the Coke model that they prefer to use domestic sourcing for all of their products, and so we look forward to working with them in that regard,” Mr. Lloyd said.
Fairlife bills its milk as a premium, lactose-free product that is highly filtered and processed to boost protein and reduce sugar. It also makes banana, strawberry, coffee and chocolate-flavoured dairy drinks.
Mr. Lloyd said Fairlife’s “premium” products have quickly become popular in the United States with consumers who are not traditional milk drinkers, offering the possibility of widening the market share for Ontario dairy farmers. “We value working with processors like them and we encourage them to come to Canada and start processing,” Mr. Lloyd said.
Shannon Denny, a spokeswoman for Coca-Cola, said the special import permit is temporary. The company is about to break ground on the new factory, “which demonstrates our commitment to be a part of the Canadian dairy industry for the long-term.”
Véronique Boileau, a spokeswoman for Agropur, said consumers care where their milk comes from, and the ad, which has appeared in The Globe and Mail, tries to underline that. “When you purchase from Agropur you are contributing to the Canadian economy,” Ms. Boileau said.
The proposed United States-Mexico-Canada Agreement unveiled two weeks ago grants U.S. producers 3.6-per-cent more access to Canada’s protected dairy market. Domestic dairy farmers bitterly lament the concessions, noting Canada has recently ceded about 10 per cent of its market under recent trade agreements, including the European Union and Pacific Rim pacts.
Canada uses high tariffs and small import quotas to protect its producers of milk, poultry and eggs. Farmers’ prices are fixed by producer groups and output is matched to consumption.
It’s a system farmers say protects them from price volatility while ensuring they meet market demand. Critics say the supply-managed regime artificially inflates prices, prevents exports and discourages innovation.
The dairy industry has long used its marketing budgets to promote milk as a healthy drink and to combat declining consumption rates. Now, it finds itself defending its shrinking market against bigger players with deeper pockets and lower costs of production.
“You’re already getting push-back on the announced trade deal for dairy, because they’ve known it’s coming,” said Alan Middleton, a professor at York University’s Schulich School of Business. "It's certainly a sign of fear.”
He predicted the access given to U.S. dairies is just the start of demands for what could amount to “massive” exports of U.S. dairy products.
He said it is tough to make people care about where their milk comes from, but Canadian producers might be partly successful defending their markets if they can highlight consumers concerns over how the milk is processed, or what goes into it.