Norco aims for $1 billion annual sales turnover target

Fri, May 12th, 2017

Dairy co-operative Norco has struck a deal with major supermarket Coles to supply it milk for its home-brand label for a further nine years.

The 60 million litres per year contracted will be sold in Coles stores, and on shelves alongside Norco's own branded milk, in New South Wales and Queensland.

Norco's chief executive officer Brett Kelly said the extension of its Coles' milk contract was significant for the co-operative and its members.

"It gives us a foundation for our farmers in south-east Queensland and northern NSW so we can continue to build the Norco business and enable them to continue to reinvest in their farms," Mr Kelly said.

Since Norco signed its first contract with Coles in 2014 it has taken on 73 new farmers in south-east Queensland.

Although based in Lismore on the North Coast of New South Wales it also has suppliers in the state's Hunter Valley, mid-north coast and southern Queensland.

When Brett Kelly first started in his role at Norco eight years ago the annual turnover was $300 million, and it has now grown to nearly $600 million.

"We're sort of sitting in a good place at the moment, and it's just so great that the consumer has been so supportive of a farmer-owned co-operative," he said.

Aiming for a $1 billion business

With the extension of its Coles' contract, the co-operative is aiming in the next five years to build up to a $1 billion business.

"But our focus always is continuing being able to pay on average the highest farmgate so that our farmer-members can reinvest in their farms," Mr Kelly said.

"We've got so many projects building the brand through the major supermarkets, in the route business we're having a really big concentration in the cafe, coffee market because as you know 25 per cent of a cup of coffee is coffee and the rest is milk, and we're using the Norco story with the coffee manufacturers to develop that.

"Our icecream business is nearly at full capacity so we're looking to reinvest in that and grow that.

"We're very very careful and conservative because turnover is irrelevant without profit and in order to build our farmgate milk price we need to continue to build our profit, so we'll take one step at a time.

"What we tend to do at Norco is that we set the strategy, we then lock it in usually by way of contract like this with Coles, that then gives us the security to then put in capital and continue to grow the business."