---
title: "Coca-Cola Makes Major Investment in Dairy: Launching 'Tech Milk' - Ultrafiltered Milk"
description: "This will be a significant long-term investment for Coca-Cola. To adapt to changing societal and consumer demands, the 133-year-old beverage giant is undergoing a century-defining transformation, particularly in response to health-conscious consumers turning away from carbonated drinks. It is actively expanding into new categories and launching new brands to position itself as a diversified total beverage company. Beyond entering healthier organic tea, coconut water, and premium juice markets, this century-old beverage company is also venturing into the dairy industry, targeting the value-added dairy beverage market with its fairlife ultrafiltered milk brand, aiming to make this 'tech milk' its next billion-dollar brand."
author: "澄韵"
publisher: "New Distribution"
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published: "2019-04-22"
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# Coca-Cola Makes Major Investment in Dairy: Launching 'Tech Milk' - Ultrafiltered Milk

> This will be a significant long-term investment for Coca-Cola. To adapt to changing societal and consumer demands, the 133-year-old beverage giant is undergoing a century-defining transformation, particularly in response to health-conscious consumers turning away from carbonated drinks. It is actively expanding into new categories and launching new brands to position itself as a diversified total beverage company. Beyond entering healthier organic tea, coconut water, and premium juice markets, this century-old beverage company is also venturing into the dairy industry, targeting the value-added dairy beverage market with its fairlife ultrafiltered milk brand, aiming to make this 'tech milk' its next billion-dollar brand.

**This will be a significant long-term investment for Coca-Cola.**
To adapt to changing societal and consumer demands, Coca-Cola, the globally renowned 133-year-old beverage company, is undergoing a century-defining transformation. Especially in response to the trend of consumers moving away from carbonated drinks due to health awareness, it is actively expanding into new territories, launching new brands and products, and reshaping itself into a comprehensive, diversified beverage company.
Beyond actively entering the healthier organic tea, coconut water, and premium juice markets, **this century-old beverage company is also venturing into the dairy industry, targeting the value-added dairy beverage market with the launch of the fairlife ultrafiltered milk brand, aiming to turn this 'tech milk' into the next billion-dollar brand.**
Recently, Coca-Cola's brand fairlife **invested over $200 million to establish a new production and distribution facility in Goodyear, Arizona, USA.** The company stated that the new plant is expected to begin operations in the second half of 2020, processing approximately 3 to 4 million pounds of milk per day.
01**'Tech Milk' – Ultrafiltered Milk Is Not Fresh Milk**
What is ultrafiltered milk? This milk may differ from what you might expect. Commercial dairy manufacturers have been producing ultrafiltered milk since the mid-1990s. The milk is filtered to separate protein and fat molecules, making it more concentrated and easier to transport.
Fairlife LLC has made bold attempts in dairy product development. It is understood that fairlife ultrafiltered milk uses a patented cold-filtration process that first separates key components of milk, such as water, milk fat, protein, vitamins, minerals, and lactose, and then recombines them, removing lactose. This results in a product with 50% more protein and 30% more calcium than regular milk, while sugar content is reduced by half. This 'unprecedented milk' has been described by many media outlets as 'premium science milk,' implying it is a laboratory product.
The improved fairlife ultrafiltered milk features high protein, high calcium, and low sugar, with better taste and richer nutrition. Additionally, because it is 'pasteurized at higher temperatures for a shorter time,' it has a longer shelf life than ordinary pasteurized milk. It is a pure milk with perfect taste and more nutrition than regular milk. **However, it also comes with a higher price tag – more expensive than organic milk and twice the price of regular milk.**
02**How Is Coca-Cola's Milk Business Performing?**
In 2012, Coca-Cola formed a joint venture with dairy company Select Milk Producers. Coca-Cola viewed this partnership as an opportunity to develop 'nutritionally rich, high-quality dairy beverages' and prepared to make a significant push into the value-added dairy beverage market.
At launch, fairlife ultrafiltered milk attempted a high-profile debut, using the sexy and slightly provocative 'milk girl' advertising to successfully capture public attention, but it also sparked controversy over sexism. Later, Coca-Cola adjusted its strategic direction, shifting emphasis to the product's nutritional value and sustainability.
Within a year of entering the market, thanks to its novel concept and the soft drink giant's powerful distribution channels, **Fairlife's sales reached nearly $90 million in 2015. This drove growth in the entire specialty milk category and was even named one of the top 10 food and beverage brand pacesetters by market research firm IRI.**
2016 was an even more rewarding year for fairlife ultrafiltered milk. According to Nielsen omnichannel data, **annual sales grew by 79%**, boosting the growth of Coca-Cola's entire high-value-added dairy category and capturing the largest market share. Subsequently, new packaging for Fairlife was introduced, enhancing shelf presence and driving brand awareness and consumption experience opportunities. The packaging redesign appears to have successfully achieved this goal.
In 2017, fairlife continued its strong growth and further segmented its product line. Following the launch of Superkids children's milk earlier in the year, in addition to fairlife, the company also offers **core power**, a value-added high-protein milk beverage targeting athletes and the fitness market, as well as **YUP!**, an ultrafiltered flavored milk for teenagers, which also maintained continuous growth. As the fairlife halo effect grew, both brands were brought under the fairlife umbrella.
In June 2018, Coca-Cola expanded Fairlife ultrafiltered milk from the U.S. market to Canada, investing $66 million to establish a milk production plant in Ontario, Canada.
Currently, to produce higher-quality products, Fairlife has invested over $200 million to build a 300,000-square-foot production and distribution facility in Goodyear, Arizona, which will significantly increase its production capacity. The plant is expected to begin operations by the end of 2020 and has partnered with United Dairymen of Arizona to ensure the milk used comes from local farmers.
03**Is There Hope for Ultrafiltered Milk Fairlife to Enter China?**
As early as 2009, Coca-Cola began entering the milk-containing beverage market, launching a carbonated milk drink with skim milk in the U.S. market and introducing its first fruit milk beverage, 'Minute Maid Pulpy Milky,' in China. However, these earlier products still fell within the beverage category. It was the launch of the high-end milk brand Fairlife that marked a true entry into the dairy industry.
Fairlife has not yet entered the Chinese market. We speculate that the possibility of entering China in the future is very high.
** _1_ ** Investment in LePur
In 2018, Coca-Cola strategically invested in LePur, a health-focused food brand specializing in yogurt in China, indicating its gradual strengthening of dairy layout in the Chinese market.
** _2_ ** Huge Potential for Lactose-Free or Low-Lactose Dairy in China
The lactose-free concept first gained traction in Europe and the U.S. However, East Asians have the highest rate of lactose intolerance globally, with rates in Europe and the U.S. generally below 20%, while China's lactose intolerance rate exceeds 90%. This largely explains why China is the world's largest plant-based protein beverage market. As consumer awareness grows, lactose-free or low-lactose milk will have great prospects. Interestingly, consumers without lactose intolerance are also choosing lactose-free products because they are perceived as 'healthier and safer.'
Currently, many domestic companies have launched lactose-free brands, including Yili Shuhua milk, but most brands remain very low-key (not capturing consumer mindshare), and no leading brand has emerged. This may be related to weak consumer awareness, but for Fairlife, it presents an opportunity.
** _3_ ** Global 'Category Strategy'
Globalization is not only a way to achieve performance growth but also means leveraging global resources for innovation and gaining more sustainable competitiveness. This is why Coca-Cola (referring only to the cola category) can still achieve long-term growth globally even when facing low growth or decline in the U.S.: the power of globalization.
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