Coca-Cola gets into milk business with Fairlife brand

One of the most well-known junk food brands in the world is getting into the dairy business, rolling out a new brand of milk that the company says is much healthier than the stuff you grew up on.

At an investor conference earlier this month, Coca-Cola's North American president, Sandy Douglas, said the company is getting ready to launch Fairlife milk across America.

The brainchild of Indiana dairy farmers Mike and Sue McCloskey, Fairlife is already available in select grocery stores in Denver, Minnesota and Chicago. But now that Coke has gone in on a joint venture with the company, they're preparing for a national rollout.

We’ll charge twice as much for it as the milk [we're] used to buying in a jug.- Coca-Cola North American President Sandy Douglas

Fairlife says its milk is higher in protein and calcium than traditional milk, and much lower in fat and sugar. The milk is lactose free, and has as much protein in a single serving as the equivalent amount of Greek yogurt.

"It's basically the premiumisation of milk," Douglas told analysts at the Morgan Stanley Global Consumer Conference last week. When it goes on sale in late December, it will "taste better and we’ll charge twice as much for it as the milk [we're] used to buying in a jug," he said.

Coke sees growth potential in the dairy market, despite overall sales volumes that are slumping. Milk consumption has been on a downward trend in developed economies for several decades, including the U.S.

"We’re going to be investing in the milk business for a while to build the brand so it won’t rain money in the early couple of years,' Douglas was quoted as saying. "But … when you do it well, it rains money later."

Fairlife's founders say they have built a sustainable business that considers environmental issues. The company's cows receive "24/7 shelter and protection from the elements" and the bottles the milk comes in are recyclable.

The milk has a longer shelf life because it is pasteurized at a higher temperature, and the product will come in skim, two per cent fat and chocolate varieties.

Milk is just the latest new product for Coca-Cola, which has moved aggressively into the sports drink, fruit juice, energy drink, and tea businesses in recent years as a way to recoup slumping sales of its flagship pop brand.

According to the company's latest earnings reports, only about a quarter of Coca-Cola's sales now come from "sparkling beverages" which includes soft drinks like Coke, Diet Coke and Sprite.