Australian Dairy Nutritionals Group infant formula a hot commodity; secures export certification

The Australian Department of Agriculture, Fisheries and Forestry (DAFF) have given the official green light to Australian Dairy Nutritionals Group (ASX: AHF), granting them an significant export certification. This opens up major opportunities ahead for the business, allowing them to take their baby formula into more international markets than previously possible – a big win.

The Group’s ‘Ocean Road Dairies Organic A2 protein infant formula’ is now eligible for export via the widely popular Chinese cross-border e-commerce channel (CBEC) – an attractive pathway to consumers due to its low cost compared to other countries.

To increase their reach and expertise in the e-commerce space, the Nutritional Group sent two representatives to attend two big trade shows across Asia sometime during the last quarter of FY22 in an effort to showcase their formulas to potential customers from global markets.

With the successful certification, it now means that AHF can start exporting its products into the international markets that showed a positive uptake of their formulas at the trade shows, allowing the Group to grow its business and increase customer acquisition.

To ensure economic development and growth within the country, the Chinese government has promoted trade exhibitions and encouraged foreign investment. Seen to be beneficial for large global enterprises and small businesses, it delivers valuable opportunities in social media marketing and brand recognition.

Figures from 2020 showed that total import and export volumes via the CBEC channel topped 1.62 trillion yuan (AU$340 billion) in 2020, surging 25.7% year-over-year – where the growth persevered and continued to a reach of 1.92 trillion (AU$410 billion) in 2021, increasing 18.6% YoY – showing no signs of slowing down and is expected to continue into the 2022 period.

High-quality organic and A2 dairy products are consistently in elevated demand globally, so with the export certification, they can take advantage of this market undersupply, offering a foothold in the industry.

The Group reported net cash outflows from operating activities of $1.67 million for the quarter ending 31 December 2022, a significant reduction on the previous quarter’s $2.22 million.