This was published 6 years ago
Nut milk wars: manufacturing issues hamper Australia's fledgling industry
By Cara Waters
After realising most almond milks in Australia were made from imported nuts, Linda Monique spent more than a year researching and developing her formulation.
Almo Milk is made from a blanched almond paste, which "is what makes our almond milk white and creamy", Monique says, while competitors use natural almonds or roasted almond paste.
Linda Monique is the founder of Almo Milk. Credit: Justin McManus
But when Monique took Almo Milk to a manufacturer, she was shocked when they created an almost identical product.
"I presented them my formula and showed them my costs for almond paste," Monique says. "They realised my Australian almond paste was cheaper so they contacted my Australian almond growers for 50 tonnes of almond paste and delayed our manufacturing."
Monique's business was nearly scuppered before it even got off the ground.
Linda Monique was shocked to find a manufacturer had ripped off her product. Credit: Justin McManus
Growing demand
As demand for milk alternatives continues to grow, the limited number of food and drink processors and manufacturers in Australia is proving to be an issue for Australian small businesses.
Worldwide sales in milk alternatives doubled between 2009 and 2015 to $US21 billion ($28.7 billion) with varieties including soy, coconut, rice and various nuts, including almond and macadamia.
The category is so popular that there has been a push by dairy farmers for a labelling crackdown on the use of the word milk by the alternatives.
Manufacturing problems
However, Monique says the fledgling Australian milk alternative industry is being undermined by contract manufacturers taking advantage of other companies’ successes and using their power to undermine contracts.
Monique says Almo Milk "pulled the pin" on the manufacturer but because of the lack of contract manufacturing in Australia was forced to go to New Zealand.
Almo Milk has been able to grow to turnover of $500,000 last year after getting ranged in Woolworths and building sales in six countries but Monique says it hasn't been an easy journey because of the manufacturing challenges.
"It's had a significant impact for both sales and distribution because you not only provide intellectual property that we have spent a lot of money on but it also diminishes our competitive advantage and our point of differentiation," she says. "It is very challenging to compete with a manufacturer or someone associated with a manufacturing facility."
Brothers Mason and Morgan Roy own Milkadamia.
Shipping macadamias to the US
The founders of macadamia milk business Milkadamia have also faced manufacturing issues in Australia and are now shipping their macadamias to the United States just to make their product.
Co-founder Morgan Roy says the family owned business includes macadamia farms in northern NSW and a processing plant.
We had a native grown ingredient that we couldn't get manufactured.
Morgan Roy
"Six years ago when we developed Milkadamia we were the first in the world to make a macadamia milk so we started to shop around and approach co-packers and contract manufacturers and see if they could make it for us," he says. "We were cautious not to approach manufacturers with similar products in case we were ripped off. We were considered a nuisance rather than an opportunity. We hit a lot of walls and would rarely get a response from manufacturers so we thought 'Let's go to the United States'."
Milkadamia is now sold across the United States.
Roy says while this was disheartening at the time, Milkadamia has thrived with the product stocked in 10,000 stores including Walmart and turnover now over $10 million.
"It's the best thing that could have happened as now five years later we are the number one macadamia milk in the United States and probably the world," he says. "Going back five years ago the Australian market wasn't ready for dairy alternatives."
Milkadamia has just secured Australian manufacturers so Roy is hoping to bring manufacturing back.
"We are going to use a smaller manufacturer to kind of say to the big guys 'hey you had your chance'," he says. "We have always wanted to come home so Australians can have a taste of a native plant that is grown here in Australia and made here. We had a native grown ingredient that we couldn't get manufactured."