You could say milk flows through Ben Dingle’s veins. The fourth-generation farmer swapped the paddock for the boardroom to first co-found New Zealand’s billion-dollar Synlait Milk company, before crossing the Tasman to do it all again – this time with goats.
Nuchev was founded in 2013 and launched the Oli6 goat milk formula brand in mid-2016. The success of Oli6 has seen it become one of the fastest growing brands in Australia and is now making rapid inroads into China’s multi-billion-dollar formula market.
Inside FMCG chats with Nuchev founder Ben Dingle.
It’s been five years since you launched Nuchev. Have you ticked all the boxes in your five-year plan?
Ben Dingle: Pretty much. When we began Nuchev in 2013, goat milk formula was considered quite niche, accounting for just 1.7 per cent of the infant formula market. Fast forward to today and that has now grown to nearly 10 per cent value share, with an annual domestic turnover of about $105 million.
We started at a time when there was a growing global trend for clean eating and people becoming more educated about the nutritional value of the foods they were consuming. Exponential to that there is an awareness among mums about what they are feeding their baby, so we were confident Oli6’s natural digestive and nutritional properties would strike a positive chord with parents.
As a start-up, it’s a no brainer that you first need to establish yourself in your home market, which is what we did in 2016 when we launched the Oli6 goat milk brand. We set about building credibility and stocking levels in the domestic market, deliberately starting with pharmacies to build credibility and build education around the benefits of goat’s milk. Last year’s agreement with Chemist Warehouse to be the only Australian goat milk formula core ranged nationally was really important validation for our brand in Australia. Oli6 is now stocked in more than 1,000 pharmacies and 200 independent supermarkets
You were the co-founder of New Zealand’s Synlait Milk, now a $1.4 billion company supplying A2 Milk Company. Why the switch?
I remained with Synlait until its IPO in 2013 and I was looking for a new challenge, so I changed country and changed species.
I was aware of the health benefits of goat’s milk for humans and recognised that I could do something similar to what I did previously, this time breeding goats for milk production. Goat’s milk is naturally rich in prebiotic oligosaccharides, in fact up to six times higher than cow’s milk, hence the name, Oli6.
We are proud to have made a positive difference and created a product that delivers on our vision of providing “Food for a better life”.
What have been the biggest challenges since starting the company?
When you are a new brand starting from a zero base, it can take time to penetrate. Our strategy was to start in the domestic pharmacy market, which was a challenge, but the proof is in the pudding because we have achieved penetration relatively quickly compared with other brands, and that sales growth continues week on week.
Getting a foothold in China has presented some challenges too, especially with the changing regulations.
We initially launched in late 2016, however, like everyone else in the market we are having to comply with a beefing up of the regulations. But we are almost through that, and ultimately these things work to the advantage of credible companies like Nuchev, effectively eliminating less credible brands.
The mums’ network is a powerful tool. How have you tried to harness that potential to drive growth?
Being a mother can be very challenging at times, so it really spins our wheels that we can support mums who can’t breastfeed, by providing an amazing product like Oli6 which has positively changed so many families.
One of my favourite things is getting emails from mums here and overseas telling us how grateful they are to have found something that has finally settled their bub’s tummy and they are now thriving.
Word of mouth is a really big part of brand building, and mums trust other mums talking about their experiences, so online forums work really well for us in establishing credibility. That was also really helped along by the results of the RMIT University study comparing different milks and formulas, with Oli6 found to contain a high number of naturally-occurring gut-friendly prebiotic oligosaccharides. Having scientific backing has really given mums reason to believe in our product and added confidence when recommending it to other mums.
How big a part does China play in your plans for the future?
We are an Australian company and Australian mums continue to be a priority. Having said that, with a product like ours, you can’t ignore China. We established our office in Shanghai in late 2016 and I now divide my time equally between both countries. You can’t just export product to a market like China – you have to physically be there and invest in building the brand in bricks and mortar mother and baby stores which is the largest channel and continues to grow.
Our domestic goat milk market is growing fast, but it’s dwarfed by the demand in China for goat milk (forecast to exceed $2 billion by 2020). There are a few factors fuelling this, including lifting of the one-child policy and mums concern in the domestic formula supply. Chinese mothers are very savvy and do their homework in researching the best product for their child. That’s why first establishing our credibility in our home market, primarily through pharmacy and now through university research, has been so important for our continued growth.
Speaking of growth, what do the next five years hold for your company?
We are happy with how things are tracking and will work to continue to consolidate growth, expanding Oli6’s footprint locally, and across China and South East Asia. With the blending and canning aspects of the business now established, the next task is establishing a milk processing options in Victoria.
We already farm a large herd of goats and will be looking to ramp up numbers to build local milk production. Every business needs capital, particularly businesses like ours with fast growth aspirations, so It’s possible that we will also consider an IPO to fuel that growth at some point in the future.