Gippy Milk taking off

Dairy farmers have been hit hard in Queensland and NSW, with private label milk finding it increasingly difficult to find shelf space - but one branded milk made in Gippsland is going stronger than ever.

Longwarry Food Park managing director Rakesh Aggarwal said the company's own Gippy Milk is sold at Woolworths and Coles in Gippsland, South Australia and the Northern Territory.

The brand hit the shelves at the same time the supermarket price war began, so he can't say if the discounted home-brand has impacted on sales, but is confident of its acceptance with customers.

"Sales have grown, which is a really positive sign," he said.

Surprisingly, the company spent little on advertising and has relied on word-of-mouth to grow the brand.

"SA, in particular, has really taken to Gippy Milk," he added.

Mr Aggarwal says the aim is to grow the brand four-fold in the next two years.

A line of UHT Gippy Milk has been on the market for nine months now, with customers receptive to the new product.

"We set up this line to capture export demand for UHT milk, and it's now sold into a dozen countries, including China, the Phillipines, and Vietnam," he said.

Growth is also expected for that product in the next two years.

Mr Aggarwal says the expansion of the supermarket pricing war does not bother him, largely because he's witnessed the growth of the company's Gippy Milk.

"It is a different story in Qld and NSW, because the dairy farmers have no choice where their milk goes but onto the fresh milk market," he said.

"In Victoria we have a choice."

He is also thankful for strong home-brand milk sales, because Longwarry Food Park holds a "significant" contract with a supermarket for its home brand product.

"It is a big part of our business," he said.

Diversification has in many ways been the main driver of the Gippsland company.

"Two years ago, we were a single product manufacturer, making milk powder for the export market," he said.

Today, Longwarry Food Park's 100 suppliers contribute towards making fresh milk, UHT, milk powder and cream cheese.

About 80 per cent of product goes to the export market and 20pc to domestic.

"Even though it's been a tough year for farmers in general, with low milk prices and high feed price, the future is looking much nice," he said.

"The dollar is setting us back slightly, but the growth of the Australian dairy industry will continue because of increasing demand from Asian countries."