US market beckons as goat milk sector ‘gem’ exits – eDairyNews
Countries United States |27 noviembre, 2017

Sections | US market beckons as goat milk sector ‘gem’ exits

A market breakthrough into the Americas is in the sights of infant formula exporter the Dairy Goat Co-operative after successfully establishing its brands throughout Europe.


Source: Stuff


Outgoing chief executive Tony Giles says the hope is that the Hamilton-based company, which 18 years ago was a tiny one-market enterprise occupying a corner of Livestock Improvement Corporation (LIC), can “make an impact” in Canada, Mexico and South American countries in the next five years or so.

He won’t be there to spearhead that market debut but is more than content to have been there every step of the co-operative’s journey from that four-person office to an international $200 million revenue company.

It developed the world’s first goat milk infant formula in 1988 and is the leader in all its markets.

Giles was its fifth employee, rising from marketer to chief executive over 18 years, in the latter role overseeing the breakthrough into several European countries, including Spain, Italy, France, Greece and Turkey, and some new Asian markets such as Vietnam. Russia is an important customer. In his four years in the job, the payroll has grown from 120 to 220 staff.

The European foray was a big milestone for the farmer-owned cooperative, which had previously focused on Asian markets including its foundation customer Taiwan, and was only possible after significant changes to European market regulations to allow the entry of its branded products.

Giles says the co-operative has just this month hurdled another onerous regulatory wall, this time China.

China is the company’s biggest market – only by a whisker because it has diversified its export reach so thoroughly in recent years – and the company was among infant formula makers which had to formally re-register with Chinese authorities in a process that took a year.

Known as much in the dairy industry for his genuine and sunny nature, gentle positivity and easy communication style as his marketing and strategic skills, Giles will step aside by May after a transition handover to his replacement, for which a search is under way.

Chairman Campbell Storey says it’s not going to be easy to replace “a gem”. But Giles had made it clear when he was appointed he saw himself as a short-term chief executive because he had been with the company 14 years then.

“Tony’s made a huge contribution to the company. He’s been a gem of a guy to work with, so easy and comfortable.”

Storey rates Giles’ communication skills up there with his marketing and strategic edge.

“He has a great rapport with staff and shareholders, our partners and stakeholders. He will be missed and he goes with our best wishes for whatever he ends up doing.”

What that will be is unknown – to Giles himself.

He’s going to take a year off and “do a few things that have been on my list for a while”.

Such as explore his family tree, renovate the house, enjoy family time. An aspiring journalist until his college teachers steered him to business studies at Waikato University, he’d also like to tackle some writing.

And travel. About 80 overseas trips on company business hasn’t been enough. But as he says, there’s a big difference between business and personal travel, though he immensely enjoyed visiting the markets. “I’m a bit embarrassed too that I’ve travelled the world and not seen much of my own country.”

After his gap year he could be open to directorships and consultancy work.

Giles says he’s had “a fantastic time”, growing along with the company within four job roles. Up until he was made chief executive he led business and customer marketing development.

Back in 1999 when his predecessor Dave Stanley pinched him from LIC, did he ever dream the co-operative would grow to what it is today?

“I don’t think any of us did. I like to talk to new graduates and people coming into the business about it being really important to keep relating to where we’ve come from – four people, no plant, no nothing. To remember that for our farmers as well it was a struggle in those early days. They were the driving force along with the likes of our first chairman, Russ Moroney.”

Part of the co-operative’s success is attributed to sticking to a policy of not taking any more milk than it can sell as powder product. This has made for a challenging inventory-market demand balancing act for senior management but has paid off. Supply-shares have been strictly limited. Today just 72 goat farmers, mostly in the Waikato, supply the co-operative. Shares, officially $23, can be internally traded which can command a premium. Farmer payout last year was $18.50/kg of milksolids, a price that’s been pretty constant for five years, Giles says.

He says there have been too many highlights in his time to isolate one, but he’s particularly proud of how the company performed in a critical period when it built a $70 million second powder dryer on its 18-hectare Hamilton site to meet increasing demand from New Zealand, Australian and further-flung consumers. It took on 24 new milk suppliers and as Giles remembers it, “we felt quite exposed”.

“But we’ve come through and grown and now in a good space with our fundamentals. The business more or less doubled in that short period and we’ve invested more in science and quality systems and people.”

Along with Dave Stanley, Giles credits independent director Tony Egan as an important influence in his business career. Egan, managing director of Greenlea Premier Meats, returns the compliment.

“(Tony) came to the role of CEO with strong marketing credentials and these have been clearly evident, however, it is his people skills and clarity of strategic thought that have impressed me most. He has an unassuming leadership style and a quick wit that seems to find a solution to every problem he faces. He has been a great business colleague and will be a friend for life. He has left the business in great shape and some rather large shoes for us to fill.”


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