Organic milk has begun flowing at Open Country Dairy's Awarua plant, in Southland.
The firm says it's taken two years to set up a certified organic supply chain with a group of Southland farmers; eight months of dairy plant re-development and a sizeable investment.
Awarua site manager Mike Butler said there was a sense of excitement and celebration as the first bags of organic milk powder came off the line.
"It is a big achievement for this rural community, for the farmers and our people involved; they feel very proud of getting to this point and knowing that their product will have the potential to reach markets the world over."
Butler said being able to switch between processing whole regular powder and organic milk powder would boost the capabilities of the Awarua site.
Since its inception in 2007, independently owned dairy company Open Country has quickly cemented its position as New Zealand's second largest milk processor and the world's second largest exporter of whole milk powder, it said in a statement.
Since commissioning the Awarua site in 2008 it has built up a steady supply of whole milk powder, tripling its initial quantity.
In 2014 it built a second dryer and doubled the processing capacity at Awarua.
"At Awarua it was always an idea to produce organic milk powder but the problem was we didn't have the volume to make it viable. Two years ago more farmers came on board and began the process of converting to organic. That gave us considerably more volume and it has made it sustainable and viable now and in the long term," Butler said.
"Setting up for organics, the entire front end of the operation needed to be built as a separate system is required to ensure segregation for organic milk."
The organic supply chain starts at the organic farms, where purpose-built organic milk tankers pick up the organic milk.
The organic tankers are fitted with thermo cover to ensure that the milk that was picked up at 6C remains chilled throughout the journey.
Once the tankers arrive at the Awarua site the milk is then pumped into a segregated intake line, into independent storage vats ensuring no contact with regular milk.
The organic milk is then processed separately into premium organic milk powder ready for customers.
The process is simple but effective and it has been audited by AsureQuality.
With AsureQuality audits completed at the beginning of November, Open Country Dairy's Awarua plant successfully began its organic milk powder production.
Butler said: "The market opportunities for premium grass-fed organic milk powder is quite significant. More and more consumers are becoming wary of what's in their food and they are switching to certified organic products as a healthier option. So I think our product has the potential to go very well in a range of finished products."