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Building Markets in Milk

This co-manufacturer is betting on a new American appetite for shelf-stable milk. Though much of the U.S. isn’t ready for shelf-stability in its everyday milk, Gossner is a first mover on specialty, value-added milk products that lay a foundation for turning the larger adoption tide.

Gossner customers Kahlua Coffee Creamers, licensed by Diversified Foods, and High Brew Coffee Drinks, have been early adopters of the Tetra Evero Aseptic package design for their shelf stable beverages with dairy content.
Gossner customers Kahlua Coffee Creamers, licensed by Diversified Foods, and High Brew Coffee Drinks, have been early adopters of the Tetra Evero Aseptic package design for their shelf stable beverages with dairy content.
Gossner Foods Inc. is a growing, family-owned dairy product co-manufacturer with two locations in the Western U.S. Production facilities in Heyburn, ID, and the original location in Logan, UT, combine to produce a fifth of the nation’s Swiss cheese, mostly via private label co-manufacturing channels.

But since 1982, the Logan location has also been home to an ultra-high temperature (UHT) milk facility producing shelf-stable milk products. Milk is heated to 285º F to sterilize it, a step beyond pasteurization, and is then packaged aseptically.

In 2017, the company added North America’s first Tetra Pak A6 filling machine, designed to form, sterilize, and fill the 32-oz. Tetra Evero Aseptic carton bottle. With this new line, Gossner is carving out a niche in a burgeoning market, and chipping away at a currently tepid U.S. appetite for shelf-stable dairy products. By and large, Americans don’t yet abide milk they perceive to have been left out of the refrigerator, even if they know it’s safe.

“Almost every region outside the U.S. has embraced the notion of shelf stability in traditionally fresh foods, especially with dairy,” says Kelly Luthi, Vice President of Aseptic Operations, Gossner Foods. “In recent years, the U.S. has begun to come around to shelf-stable packaging for plant-based products, chicken broth, and some other things, but not quite yet for dairy. But we feel like it’s continuing to grow, and because the market is so new, there are still a lot of opportunities out there that we’re trying to get ahead of. Ultimately, the goal is to get people to drink more dairy, and shelf-stable UHT milk is a route to doing that.”

Four focus areas
While many regional American notions about what constitutes fresh milk currently preclude shelf-stable formats from breakfast and lunch, the core daily usage occasions, that’s certainly not the only liquid dairy game in town. Gossner is taking aim just outside of the center of the daily-use milk bullseye to find inroads to adoption.

“It’s interesting to see all the different types of dairy-based drink products that they have in Europe—there have to be 20 or more. There are products to help you go to sleep, products to help you wake up, and everything in between. And they’re all in dairy-based, milk-based products that are given additives to give them their function,” Luthi says. “With the help of Tetra Pak, we identified four different areas where we could succeed here in the U.S.”

The company’s four-pronged strategy spans all age groups. Fortified, milk-based drinks addressing bone health and osteoporosis prevention have a strong pull to women. In fact, baby boomers in general are looking to vitamin- and mineral-fortified dairy drinks to maintain health. Also, dairy drinks with specialty formulas promoting fast recovery and nutrient replacement are increasingly accepted in active lifestyle and sports communities, where sweeter options once reigned. Lactose-free products for the lactose intolerant tend not to carry the same consumer preference for cold or chilled, and the market segment targets a consumer that, out of necessity, tends to be more informed. Finally, parents of toddlers or young school children are drawn to the health implications of fortified milks, plus the convenience of refrigerator-free transportation.

Importantly, shelf-stability doesn’t preclude these products from being sold in a refrigerator, chiller, or cooled grab-and-go case. This can reassure guarded consumers without sacrificing supply chain and inventory advantages that shelf stable products carry for retailers.

Thinking beyond retail, Gossner sees potential for aseptic, shelf-stable milk products in areas like e-commerce, though shipping costs tend to far outstrip the cost of the milk itself. The company also works with meal-kit purveyor Hello Fresh, competitor to Blue Apron, and sees long-term legs in that market.

“And to be honest, we’ve wondered whether we should launch—either under our own brand or a brand for whom we private label—a version of this 32-oz. Tetra Evero Aseptic package with just regular UHT milk,” Luthi says. “We’ve actually gotten some decent responses when we’ve pitched it, and we think it would work in the right market, maybe on the East Coast or in Florida. I don’t think we’re ready for daily use shelf-stable milk nationally, but if we pick our spots, it could work. The Tetra Evero Aseptic design just looks and feels like a milk carton.”

Matched goals
Tetra Pak’s European experience with the Tetra Evero Aseptic design, alongside its research into the U.S. market, revealed opportunities that closely tracked with Gossner’s targets.

“The idea behind Tetra Evero Aseptic is to meet new needs in the market that are driven mainly by demographics, ease of access to information, and changes in the value chain that generate new behaviors,” says Pedro Gonçalves, Vice President of Marketing, Tetra Pak. “People need different things than they used to. We need to be able to address those needs, and we need to stand out when addressing those new needs. Evero was designed to meet consumer nutritional, sustainability, and lifestyle needs. We see those same factors reflected in what Gossner is trying to do.”

Tetra Pak identified several modern trends to which it believes the Tetra Evero Aseptic is well suited. Convenience, functionality, and the “whole-self” health concept are all mirrored in Gossner’s target markets, making the two companies a good fit for the Tetra Evero Aseptic enterprise. More specifically, with Tetra Evero Aseptic fitting nicely into categories like value-added and enriched milk, flavored milks, dairy-infused coffee, dairy creamers, and dairy alternatives, it became clear to Gossner and Tetra Pak that goals were well aligned. Plus, the Tetra Evero Aseptic scratches a growing sustainability itch in the U.S. that’s slowly catching up to Europe’s.

In a peer-reviewed Life Cycle Analysis conducted by Ifeu (Institute for Energy and Environmental Research) in Germany in 2010, the package showed a 24% to 30% lower carbon footprint versus PET and HDPE containers of a similar weight. The body of the carton bottle is constructed of Forest Stewardship Council (FSC)-certified paperboard, and the components of the container can be easily separated by the consumer for recycling.

“We have a strong environmental profile. As any carbon-based package, Tetra Evero Aseptic has a high percentage of renewable material—most of this package is made from renewable material. But we can’t just look at the material, we have to look into the whole value chain, and how it impacts the value chain. For instance, by maintaining roll-fed paperboard design, the Tetra Pak A6 machine saves a lot on logistics. Also, our sourcing is all from FSC, it’s always certified material,” Gonçalves says. “That’s how we see the environmental question. It’s not only in the package itself, but in how we affect the whole value chain until the moment we recycle the package.”

Taking the plunge
Gossner has long partnered with Tetra Pak on flat-packed lines of juice box style-packages and lactose-free formats, but the larger, carton style package more recently came onto its radar.

“Ten years ago, in Europe, company owner and president Dolores Gossner and I first saw a carton called Tetra Top, which uses an injection molded top like Tetra Evero Aseptic now does,” Luthi says. “We liked the looks of it, we liked the size of the opening for a good pour. It looked more like a refrigerator-ready package—just without it needing to be refrigerated. We really felt like it could be more mainstream, and look more like what customers had conventionally purchased in the past.”

A few years later, in 2011, Tetra Evero Aseptic debuted in Spain’s Corporación Alimentaria Peñsanta S.A. (CAPSA). After some market research and strategizing, Tetra Pak and Gossner agreed that it was time to strike in the US market.

“It’s just been crazy, the amount of interest in this package, but it just didn’t seem like any brands wanted to be first to secure machine capacity,” Luthi says. “So, it was a little bit like the movie line, ‘If you build it, they will come.’”

And come they did. First it was Diversified Foods and its Kahlua-brand coffee creamer. Shortly thereafter it was High Brew’s coffee drinks. Interest only continues to grow, and new brands are looking for machine capacity.

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