Coke kicking butt on Milk

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For decades, conventional dairies tried to attract customers by making milk faster and cheaper. But an unexpected competitor changed the market by favoring trends over tradition.

Move over, dairies. Coke’s got milk.

In 2014, Coca-Cola Co. partnered with Select Milk Producers Inc., a dairy wholesaler, to launch Fairlife ultrafiltered milk with 50% more protein and 50% less sugar than regular milk. The product now represents 3% of the dairy-milk market, and over the last 52 weeks, its sales are up 30%—although some retailers recently pulled it after allegations of animal abuse. (The companies say they are working to improve animal practices.)

Now, traditional dairies are trying to catch up to the interloper who reformulated their product, doubled its price and achieved soaring sales.

“In five years, Fairlife went from zero to $450 million in sales,” said Paul Ziemnisky, executive vice president of global innovation for Dairy Management Inc., a trade association based in Rosemont, Ill.

In comparison, after nearly 30 years in the business, Horizon, the largest organic-milk brand, represents 3.7% of the market, according to Information Resources Inc., a market-research firm based in Chicago. DairyPure, the largest conventional brand, excluding store labels, represents 9.7%. Its maker, Dean Foods Co. , started selling dairy products nearly 100 years ago.

In part, Fairlife has succeeded by capitalizing on the latest food trends: Fat is back. Sugar is out. Protein is in. And rather than asking consumers to squint at a nutrition-facts label to figure out how much of each it contains, Fairlife displays the information in large type on the front of its bottle....

Fairlife’s rapid growth is unheard of in the milk category...

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