The competitors also will determine how much market share they want to take over time. If the competitors choose to take market share, via various means, the issue will be whether it is profitable enough for them to continue, and at what level they do so.
Interesting, you say competitors will decide how much market share to take and then the share will be determined by profitability. I assume you are meaning that someone like Nestle can come in and run at a loss until it kills off competitors..... Supply will be key to them being able to do that. With the largest Dairy exporter in the world now on A2's side, I believe that any competitor will be in for a torrid time if they wish to grow into a large competitor.
I see Fonterra using the A2 brand to sell everything that A2 doesn't in volume, i.e. UHT milk into Asia, Milk powder into Asia, cheese, butter, milk byproducts (i.e. whey etc). Any competitor will have to cater for Fonterra boosting the A2 Brand as well as A2.
At the same time the existing A2 farmers are loyal to A2 as they have been receiving a premium that has not changed, unlike other farm gate prices.
Small niche competitors will always be there, but big ones will struggle for a long while.
Further in fresh milk, nearly every local dairy business has the option to produce their own A1 protein free product over time. It will be very unlikely A2M will be able to match such a cost structure.
Yeah....nah....hasn't been working out so well for them so far has it. As I said small niche maybe, but in fresh, nothing big for 5-10 years at least. Their supply farmers would have to be converted over to A2 only herds, that takes time.
Add to My Watchlist
What is My Watchlist?
