Consumers embrace niche products

Producers have long been told that niche products are one way to avoid being reduced to commodity producers and price-takers.

Now, the BC Milk Marketing Board’s scramble to align conventional milk production with consumer demand is highlighting the challenges of serving the mass market and the benefits of targeting smaller categories.

The board initially announced two incentive days in March to boost conventional milk production, as well as three days in each of April and May. Consumers were staying home and demand for fluid milk had increased.

But a week later, the incentive days for April and May were withdrawn and some producers were asked to dump the equivalent of 3% of the province’s weekly production. The demand hadn’t materialized, and supply chain issues were preventing product from getting to market.

Conventional producers have since been told to produce no more than their daily quota, in line with producers across Western Canada.

Meanwhile, organic producers in BC have kept milking away.

“Organic fluid milk market demand remains stable and at this time requires no decrease in production,” the board reported this week. “The BC specialty market is not reliant on the restaurant sector, with the majority of sales situated in the fresh market retail sector.”

Specialty milk is also set to get a new product, with the board recently inviting producers to submit expressions of interest in producing A2 milk to Agrifoods International Cooperative, which recently signed a licensing agreement with a2 Milk Company Ltd. of New Zealand.

A2 milk contains only the beta casein variant A2, not A1, which some believe is harmful. There is no scientific basis for this belief, however.

The launch of A2 milk in Canada with its allegedly distinctive health attributes points to the growing differentiation in the dairy case, and the growth of specialty products in an increasingly sophisticated marketplace.

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