Australian milk used in Starbucks coffee for emerging markets

While Starbucks has floundered in Australia, they’ve flourished around the world. And they’re now using Aussie milk.

Whether it’s consuming a canned coffee in Kyoto or tasting a milky tea in Taipei, Australian travellers may be surprised to learn their beverage of choice is partially home grown.

Burra Foods has been exporting milk to Japan for nearly three decades but in these unstable coronavirus times, the Korumburra-based processor is making inroads to other markets such as Taiwan, Vietnam and mainland China.

“Japan has been interesting, with the Olympics being on-again, off again,” Burra chief executive Stewart Carson said.

“We saw a surge of demand leading into the Olympics. Then, when the Olympics were postponed for 12 months, then obviously that demand sat in warehouses and had to get chewed down.

‘Then as preparations for the Olympics restarted, we saw an increase in demand again.

“And there were no international visitors, just athletes at the Olympics.

“So we’ve seen a saw-tooth in Japanese demand. At the same time, the Japanese dairy industry has had strong growth in milk, so they’re carrying super-high inventories of dairy produce at the moment — of skim (milk) and butter in particular, which means you have to be careful with the products you sell into those markets and be agile with how you engage with your customers.

“It’ll even itself out — we’ve been in Japan 30 years, it’s our longest and oldest market.”

Like several processors, Burra has weathered the coronavirus storm reasonably well. It has more than 200 suppliers to its Korumburra site, and the business overall has 180 staff on the books.

Mr Carson said the processor pumps $200 million dollars annually into the Gippsland community through wages, supply agreements and milk procurement.

One of the driving factors for Burra in recent years has been the Taiwanese market, which along with Australia and New Zealand, were judged as nations that best handled coronavirus outbreaks both from a social and economic perspective

“Some the frozen dairy ingredients we make that go to Taiwan ends up in Starbucks,” he said.

“When it comes to the milk in (Taiwanese) Starbucks, we make our dairy ingredients to suit that application.

“Taiwan has been a good market for us — they performed well through that (2020-21 coronavirus) period.”

One of the key lines sold by Burra abroad are 20kg bladders of milk, which are then contained in boxes and blast-frozen for export, then shipped in a frozen state.

Long lasting, the frozen product has a shelf life of between 18 and 20 months.

Customers in Japan and Taiwan then can store the package and once needed for consumption, chip at the frozen produce and add water to revert it back to a consumable beverage.

Mr Carson said the frozen option was popular abroad because it retained its flavour profile, unlike powdered milk, which can tend to add a caramelised flavour.

However, Indonesia still seeks out Australian powderised milk due to its affordability.

Meanwhile, Mr Carson said the past few years have seen an upswing in demand for Burra’s products in Vietnam.

“It’s early days for us in Vietnam,” he said.

“They’re starting to get that westernised diet. Vietnam is relatively stable from a regulatory perspective. We see some really interesting opportunities throughout South-East Asia at the moment, particularly with the evolution of cafes and coffee culture and bubble tea stores.

“We’re working on innovations at the moment with customers so we can provide solutions for those different applications.”