THE first commercial export shipment of SADA Fresh milk is due to arrive in China this afternoon.
The shipment of 1872 one-litre bottles left Adelaide yesterday aboard a Cathay Pacific flight to Hong Kong.
The milk was then loaded onto a subsidiary airline for delivery to Nanjing in central eastern China, where it is being marketed to local retail outlets by a Chinese importer.
SADA Fresh was launched 18 months ago by the SA Dairyfarmers’ Association to help secure the future viability of the State's dairy industry and its farmers.
"Using the milk brand to draw investment to South Australia and open up new markets for our dairy products were always primary goals of the enterprise, so this is a very exciting day for us," SADA President David Basham said.
"After the initial run this week, the Chinese importer has committed to purchasing one air pallet of about 3960 bottles per week for the next three months, and there are expectations that will double after that, depending on the market's response.
"Despite all the headlines recently about Chinese interest in Australian dairy products, and the new Free Trade Agreement between Australia and China, the reality is that it is very difficult to crack this market and convert the talk into actual sales.
"Even though the initial shipment is relatively small, we hope this breakthrough will open doors for other SA dairy brands and lead to greater opportunities for us all in the future."
Parmalat holds the licence to process, package and supply SADA Fresh wholesale in SA, where it is currently retailed exclusively through Coles.
The milk destined for China is also being processed, packaged and exported by Parmalat, under a separate licensing agreement with SADA.
Mr Basham understands that about half the bottles in this week's shipment will be distributed as part of a promotional exercise to launch the brand to Chinese customers and help build market share.
The milk will be retailed through conventional shops and supermarkets, as well as online grocery stores which are becoming increasingly popular in China, with consumers able to purchase two or more bottles at a time and even subscribe to receive weekly deliveries.
Mr Basham says this week's shipment follows a series of small-scale trial shipments carried out over the past two months, and something like six months of planning and negotiation.
"The opportunity came about last October when Austrade (the Australian Trade Commission) held a food expo in Melbourne. "Among potential export buyers attending the event was a Chinese importer looking for companies that could supply fresh milk, and I just happened to be in Melbourne at the time so I met with them," he says.
"The association helped set up meetings with Parmalat who negotiated a formal contract with the Chinese buyer last month. In the meantime, trials were organised to fine-tune delivery and distribution protocols, and to make sure the milk meets stringent Chinese quarantine regulations and quality control specifications.
"It's been a far from straight forward process that has also involved developing a new label, not just to incorporate Chinese characters, but to feature blue rather than the brand's usual red or yellow, to meet a request from the importer."
Under the agreement, Parmalat pays SADA 20 cents for every litre of milk sold in South Australian supermarkets, with the proceeds going into a new South Australian Dairy Industry Fund. SADA will also receive 5 cents per litre for the milk sold in China.
The fund was set up last year to finance projects that directly benefit the South Australian dairy industry and its communities. The first call for projects was issued in December, after sales through Coles topped the one million litre sales mark.
Recipients are expected to be announced shortly.
