farmer shareholders

MG capital raising program raises plenty of questions

/ dairymilkmaid / 5 Comments

Farming is all about taking risks. Our businesses rise and fall largely on the backs of increasingly volatile international commodity price cycles, exchange rates and the weather. Plenty of really good farmers have come unstuck through no fault of their own, other than taking a good risk at a bad time.

On the other hand, our co-op, Murray Goulburn, has always been considered a pretty safe bet. It was formed more than 60 years ago by a group of Victorian dairy farmers seeking a better deal for their milk and has grown to become Australia’s third-largest food and beverage company – dwarfed only by Coca Cola Amatil and Lion.

Our managing director, Gary Helou, doesn’t want to stop there. At a supplier meeting this week, he spoke about the need to move at “break-neck speed” with new products to capture new markets within the next three to five years, swallowing competitors along the way.

They’re exciting times for this once risk-averse co-operative. The proposal being put to farmer shareholders is to list a chunk of the co-op on the ASX so that anyone can buy a piece of the action. Farmers with excess shares will be able to sell to non-farmers but these external investors, however, wouldn’t have voting rights.

Am I in favour? Yes, if the new capital structure can:

  • Enshrine farmer control
  • Maximise farmer profitability
  • Treat all farmer shareholders equitably
  • Allow the co-operative to provide great opportunities for new generations of farmers

Those are big “ifs” and there just isn’t enough detail yet to know whether any of them are satisfied. It is incredibly heartening though that the MG Board has listened to member concerns that the initial start date of the program of July 1 was far too soon to consider the complex implications of the proposal.

That’s the beauty of a co-operative: members have a real say in their own futures. And that’s why those of us who cherish it must have no fear of asking questions.

Devondale’s new TV ads spread the love, but who to?

/ dairymilkmaid / 18 Comments

Well, you saw it here first. MG’s new ads will air on TV from tonight but they’re already up on its Devondale website.

I can’t help but wonder if this ad is a direct consequence of the much-despised Dev and Dale commercials that presented the co-op’s own farmer-shareholders as bogans. The deeply unpopular ads set MG directors’ phones alight and were pulled early in response.

Watching it reminds me of Dairy Australia’s own embryonic Legendairy campaign and even the Dodge “God Made a Farmer” Super Bowl ad that unashamedly pandered to a despairing target audience in desperate need of some moral support.

What do you think? Will this ad sell more Devondale cheese, milk and butter? Is it just too cynical of me to suggest that perhaps I and my fellow dairy farmers are the real targets? Or maybe it’s not me they have in mind but the NSW suppliers MG needs to woo in order to meet its Sydney Coles contract.

While you’re having a think about it, check out another new Devondale product ad!

Friendly fire from the milk co-op

/ dairymilkmaid / 23 Comments

I don’t think MG’s chief banana, Gary Helou, was expecting its farmer shareholders to be pleased with the co-op’s rebranding exercise. Referring to the Dev ‘n Dale ads, he writes to his farmers:

“We have received several comments about the adverts in relation to farmer image. It is important to note that the Dev and Dale adverts have been carefully designed to achieve consumer cut-through to drive brand recognition and sales volumes.”

“This strategy is based on humour and the comic characters were designed to be over-the-top so they could not be construed as real representations of our farmers.

“The Dev and Dale characters were also developed to create greater recollection of the brand. Earlier market research found that consumers did not have strong recollection of the Devondale name or brand, and this means consumers are not often enough considering our products for purchase.

“We will monitor consumer response carefully to ensure there are no negative connotations for industry image.”

In earlier letters, the co-op had explained that the old branding was associated with a low-cost positioning and it was important to add value to the brand. I guess Dev ‘n Dale is their interpretation of “upmarket” then.

Please let me know – are the ads funny, memorable and indicative of a premium brand?

PS: For an alternate approach, check out Yeo Valley’s UK dairy promo.