Noumi Limited Michael Perich says dairy and plant milk can coexist

Producing both dairy and plant milk — once sworn enemies — is about offering choice, dairy prodigy-turned-ASX listed company boss Michael Perich says.

Michael Perich, CEO Noumi, Shepparton, Picture Yuri Kouzmin

Spend a few minutes with dairy prodigy-turned-ASX listed company boss Michael Perich and one thing becomes abundantly clear – he’s not one to shy away from a challenge.

“I’m probably someone that runs towards a fire, rather than away from it,” the 49-year-old says.

It’s a trait, developed and honed over a long career in the farming industry, that certainly came in handy five years agowhen a food and beverage company majority owned by his rich-lister family found itself in serious hot water.

According to insiders, the situation involving Freedom Foods in late 2020 was, at best, messy – at worst, a complete shambles. The company – which produced breakfast cereals, snacks, and both plant-based and dairy milk – was thrust into the nationalheadlines after being forced into a trading halt, following an uncovering of significant financial and operational mismanagement.

The fallout from the discovery of warehouses overflowing with unsellable, out-of-date stock, and products being sold at aloss, was brutal, resulting in a $591.5 million write-off.

The scandal, which led to a sweeping executive purge, triggered an Australian Securities and Investments Commission investigation.

With the company all but on its knees, and shareholders circumspect, a rebuilding both financially and culturally was goingto require strong leadership. It was then Perich stepped forward for a fight most others wouldn’t dare contemplate.

“I’d always had a lot of belief in the company,” laments Perich, an agricultural-science graduate who at the time was theboss of his family’s Leppington Pastoral business running 2000 dairy cows in the Sydney Basin.

“I was an alternate director to my father (Ron Perich, who with brother Tony boasts an estimated net worth of US$1.1 billionaccumulated through dairy farming and property development) on the board at that point in time and I had just started gettingmore involved at the management level just to try and help fix things.

“A couple of the independent directors asked if I was interested in taking on the (chief executive) role in the interim. Itwasn’t something that the family said ‘we need to go in there’. It was more convincing my family that I was going to leavethe farm to go and do it. I was expecting to do it for a couple of years, but almost five years later I am still here.”

“Here” is Ingleburn, in Sydney’s industrial southwest, the home to Noumi Limited — the rebadged Freedom Foods —now a leadingdairy and plant-based beverage company with annual sales approaching $600 million.

The Freedom Foods name was included in the late 2021 sale of its cereals and snack business to private equity giant KKR-backedArnott’s Group. Milk processing remains central to Noumi’s operations, producing 220 million litres of dairy milk and 90 millionlitres of plant-based alternatives, including almond and oat varieties.

WHEY OF THE WORLD

Farming runs thick in the veins of Perich’s family.

He grew up on his family’s farm at Bringelly, southwest of Sydney, surrounded by a bustling environment that included hisparents, two older sisters, uncle, cousins, and grandparents. Life on the farm was always busy, with no shortage of work tobe done.

Despite this upbringing Perich doesn’t recall being overly passionate about agriculture growing up. “It was just the lifewe lived, and as a kid, you don’t really think about whether you’re passionate about it or not – it’s just what you do,” hesays. “My memories are mostly of hard work. My parents and family worked incredibly hard. We spent a lot of time as kids helpingrear calves, working in the calf shed, and just doing whatever needed to be done. It was a proper family operation. Lookingback, I realise how unique it was. We were close to the city but still fully immersed in rural life. At the time, it justfelt normal.”

When Perich was born, Leppington spanned just over 600ha at Bringelly, with a herd of 600 milking cows. Over the years, thefamily steadily expanded within the Sydney Basin, building a second dairy 7km down the road in 1979. In 1991, they furthergrew their operation with the purchase of a third dairy at Wilberforce, near Windsor, increasing their milking herd to 3000cows.

Two years later their expansion plans hit a hurdle when the NSW government resumed part of their Bringelly farm for Sydney’ssecond airport, forcing the relocation of a dairy, office, and workshop to the other side of the property.

Armed with a degree from the then-Hawkesbury Agricultural College, Perich returned full-time to the family business in 1995.He played a key role in a period of expansion and consolidation, spearheading the construction of a state-of-the-art dairyin 2000.

The following year, the family closed the Wilberforce dairy, consolidating their 3000-strong herd at Bringelly.

THE WHITE STUFF

Noumi employs more than 500 people and boasted revenue of $589.8 million in 2023-24. Some $412.2 million of this was generatedthrough the dairy and nutritional side of the business and $177.6 million in sales of plant-based milk. The Perich family holds 52 per cent of the listed equity in Noumi, with the remaining shares owned by a mix of smaller investors and institutions.

Perich acknowledges that investor perceptions of agriculture are mixed. Many are particularly enthusiastic about the plant-basedsector, drawn to its strong growth potential. Dairy, on the other hand, presents more challenges, with investors cautiousabout industry-wide pressures while still recognising the value in Noumi’s established brands and ongoing innovation.

Noumi’s suite of brands include Milklab barista-designed plant-based milk, Australia’s Own plant-based and dairy beveragesVital Strength, Uprotein, Crankt protein powders and sports supplements, and PUREnFERRIN Lactoferrin nutritional ingredients.Milklab is its signature brand and the only dedicated milk brand in Australia that pays in both the plant and dairy space.While Australia is Noumi’s major market, product is exported around the globe with a strong focus on South East Asia. Noumihas about 18 employees on the ground in China, working in sales and marketing, and eight in Singapore. Perich said thereis steady growth in both the dairy and plant-based sectors, with the latter growing at a slightly faster pace, but both performing well.

‘OFFERING CHOICE’

WHEN asked whether, given his extensive background in farming, that plant-based milk competes with or complements dairy milk, Perich leans back in his chair and chuckles.

“Early on I was maybe less excited by it, but at the same point I look at where plant-based milk doesn’t really replace dairy,” he says. “They coexist. It’s about offering choice.”

While Noumi’s plant-based milks portfolio is experiencing steady growth, Perich’s passion for the dairy industry is evident.

He says while global markets are showing positive signs, with price improvements for butter and protein, challenges remain.He says Australian retailers are still putting a lot of pressure on prices, which in turn make for tough going for processorsand farmers.

“At the domestic level, retailers dropping milk prices by 5c a litre last year didn’t help,” he says. “That took value outof the industry at a time when costs were already rising.”

He says cost-of-living pressures are definitely impacting consumer behaviour. He says industry data that shows some growthin retail, restaurant, and cafe sales, is more due to price inflation rather than increased demand. “People are watching theirspending more closely,” he says, acknowledging that consumers are shifting towards making coffee at home rather than buyingat a retail outlet.

“That shift is actually working in our favour. Because we have a multi-channel strategy – selling through both cafes and retail – our retail sales are picking up as more people invest in home coffee setups and premium milk alternatives for home use.”

He acknowledges the challenges facing the dairy industry but believes it has a bright future.

Looking ahead, Perich sees strong growth opportunities for the business, particularly in the lactoferrin market – both ininfant formula and as a key ingredient in skincare.

He also sees potential in expanding milk exports, particularly to Indonesia, Thailand, and South Korea, where coffee cultureis booming.