Indonesia laps up NZ milk

By CAMERON BATES

New Zealand Milk Indonesia general manager David Ross is upset as he recalls the aftermath of the bombing of the J. W. Marriott Hotel in Jakarta last August.

The emotions are triggered not from the devastation but by the way people of all faiths pulled together in a crisis.

"I do not subscribe that there is a major difference between Muslims, Christians, anybody. A good person is a good person - apart from the extreme minority, [Indonesians] are good, warm-hearted people. It was a real lesson in humanity."

The terrorist attack claimed 12 lives, highlighting the risks of being in the wrong place at the wrong time.

But the benefits of being in Indonesia - with a population of 220 million people - appear worth it to NZ Milk and its parent company, Fonterra.

Although Indonesians drink on average just six litres of milk a year each, its dairy market is growing at 10 per cent a year.

NZ Milk Indonesia is expected to post record annual sales of US$50 million for the year ending this month - a doubling of revenue in just three years.

A casually dressed Ross, sitting in his modest office in a modest building in heavily polluted central Jakarta, explains that a combination of creating consumer demand for milk, building strong brands to meet that demand and constructing a high performance climate within the company have been keys to its success.

Its flagship brand Anlene now controls 50 per cent of a key segment of the large milk powder market.

Though NZ Milk has been operating in the troubled republic for more than 15 years - a fraction of the time of some of its competitors - the company has started to get serious only in the past eight years, particularly after the Indonesian Government, like its regional neighbours, acknowledged it would never be self-sufficient in milk and removed the major barriers to importing dairy products in the 1990s.

Ross, the 38-year-old son of Katikati dairy farmers, who spent five years based in neighbouring Malaysia before taking the helm in Indonesia 13 months ago, said the consumer and food service arm of Fonterra was forced to concentrate on areas it could excel in.

Other than Anlene, which represents 45 per cent of the company's revenue, brand names include Anchor, Anmum, Ucare, Boneeto and Chesdale.

"In some categories there can be up to 15 brands of product. I mean, how does the consumer choose? It is a real challenge to anyone selling here to make its brand stand out and build a loyal consumer base.

"With so much competition you have to be really focused on what you are going to stand for and what you put your resources behind."

Ross said the success with Anlene began when it was the first high-calcium milk to be launched in Indonesia eight years ago. NZ Milk then teamed up with the Indonesian Osteoporosis Society, a body comprising health professionals with Government connections, to educate the public about the dangers of the degenerative bone disease.

"This highlights some of the lengths and activities we go to to keep this issue alive, because Indonesians don't have a history of drinking milk.

"First, you've got to educate consumers about the need to get calcium in their diets to help them prevent osteoporosis and, secondly, you've got to sell a product that offers a solution."

Over the past two years, a series of unbranded public service commercials highlighting the dangers of the disease was interspersed with a series of branded ads highlighting the medically proven benefits of drinking high-calcium Anlene.

The campaign's success was demonstrated on World Osteoporosis Day last October, when 10,000 Indonesian women paid the equivalent of $5 to wear Anlene T-shirts and perform bone-strengthening exercises at Indonesia's national monument, Monas.

In the past five years Anlene has backed a series of osteoporosis gymnastic clubs supporting impact exercise in bone health.

Its status was confirmed when it won the independent Indonesian Customer Satisfaction Award in the milks category last year.

"Which is really the ultimate measure that your brand activities are having an impact on people, and the brand itself is delivering on its promise."

Another element in the success of NZ Milk brands, but one Ross said could not be easily quantified, was the association with New Zealand's clean, green image. The company was enhancing that image.

An annual New Zealand by Nature campaign, offering free trips Downunder, attracted 200,000 entries and increased sales by up to 20 per cent during the competition period, including entries from consumers who had not bought company brands before.

But, said Ross, there was no time for complacency.

"Obviously we are not taking our foot off the accelerator."

Indonesia's milk market

* NZ exports to Indonesia: $391 million (in the 12 months to last September 30).

* Fonterra supplied more than 80,000 metric tonnes of ingredients to the region last season.

* NZ Milk Indonesia is expected to post record annual sales of US$50 million for the year to May.

* Anlene is one of Fonterra's top five brands worldwide.