Colac's Bulla Dairy Foods celebrates taste of success following China export breakthrough

A small city is giving an embattled industry much-needed light as it fights to emerge from dark times.

Inside the walls of a stark white factory in the main street, as many as 500 workers finalise products for the world stage.

Colac, with a population of about 12,500, is a David when it comes to Goliaths like China and its one billion people. But through its Bulla Dairy Foods' frozen products operation, it has landed a giant-killing breakthrough.

Bulla's Colac products, including its iconic Creamy Classics ice creams, are now on Chinese supermarket shelves.

It's a ray of hope for the dairy industry, which Colac and much of the south-west, depends on.

"We're pretty excited, this is something new and different for us," Bulla chief executive officer Allan Hood said.

"This is the start of our entry into China. It's taken us a while, about five years, to crack the Chinese market."

Bulla's frozen range will be sold on two online retail platforms and in Chinese stores.

"We're now listed on the biggest e-commerce platforms in China which is Alibaba's Tmall and JD.com. Then parallel to that we've been able to push through our bricks and mortar strategy which is really getting Bulla products into stores, both at a high-end grocery level and through convenience stores," Mr Hood said.

"Something like 800 million people use these platforms, it's massive for a Colac-based business to be listed on these two global platforms.

"It shows there's a very strong demand for Australian products, particularly with a focus on quality and freshness. Chinese consumers love Australian brands, they love our Bulla brand and the Australian story."

Bulla already has a strong international presence, currently selling products in 19 different countries with major markets in Singapore, Hong Kong and Southeast Asia.

International exports make up about five per cent of the company's annual profit. They expect Chinese exports to make up about one per cent of their profit.

Back home, it remains one of Australia's largest family-owned dairy producers. The Bulla-branded cream is the number one brand of cream in Australia, their Creamy Classics ice cream is the best-selling ice cream brand in Australia and it is now the most recognised dairy brand in Australia.

Colac is the company's "heartland" with a frozen and chilled factory, as well as an innovation centre where the company tries and tests its new products.

It is one of the town's main industries, employing around 500 people from Colac and surrounds.

"We like to call it the 'Willy Wonka' part of the factory," Mr Hood said.

The Colac factories see around 40 trucks coming and going a day, bringing in fresh milk from farms and transporting products to their Derrimut factory.

There's a milk separation plant and skim milk concentrate plant on site where milk tankers bring the milk in to be separated to then go to the chilled factory.

The company sources its milk from around 150 suppliers, 100 of those which are from south-west farms. All products are made with fresh milk and cream all locally Victorian-sourced.

Two years ago the company moved to a direct farm supply system, buying and collecting milk directly from farms through a direct contract with the farmer rather than through a third party.

"Colac is our heartland, we've been in Colac for around 90 years. We employ 500 people locally and have about 750 employees as a total," Mr Hood said.

"We shifted to Colac for its rich fertile soil and flatter milk profile - the area is a rich quality source of fresh milk.

"The community has essentially been built around the factory, and we have a very strong connection with our local farmers."

Site lead for chilled operations Brad Donovan said many of the local workers are employed on a seasonal basis, with summer being the busiest season for the company seeing ice cream popularity skyrocketing.

"The chilled factory employment is more structured and stable, with around 140 people, whereas at the frozen factory there is a seasonal intake around November for the ice cream of about 300-350," he said.

"We do about 120,000 litres of cream here per day roughly, and then come peak period we're doing around 170,000 litres per day of bottled cream.

"The majority of Australia's cream over Christmas will come off these lines. The cream is put through the plant and processed within a 24 to 48 hour window."

While excited by China's growing taste for Aussie dairy products, Mr Hood acknowledged the challenges facing the local dairy industry.

"I think there's a lack of trust in the industry and we want to bring that trust back through a transparent and simple pricing model," he said.

"The dairy industry has been through some challenging times of late, but if we are sustainable then we can do the best that we can to pay a sustainable and attractive farm gate price for our farmers so that they can be sustainable businesses."

Farmers Gerard and Jo McNamara supply 1.8 million litres of milk to Bulla every year from their 380-acre dairy in Colac and their son Nathan McNamara's 120-acre farm in Cororooke.

Bulla pays them $7/kilogram milk solids and collect in excess of 6000 litres a day.

Gerard McNamara has been in the industry ever since he was a young boy. His parents had a farm in Larpent before shifting to Colac.

He worked in the banking sector for seven years and ended up taking up farming again when he got married 35 years ago.

"The dairy is being used 365 days a year every year, this is our second year supplying to Bulla," he said.

"I've got no regrets at all, they have been fantastic. We're getting paid a lot more now that we're on Bulla's flat payment structure.

"We left Bonlac when they went out of business, then we went over to Warrnambool and supplied Warrnambool Cheese and Butter for eight or 10 years.

"We went to Bulla for the level payment system - with Bulla there's a flat payment where you get paid the same amount in the spring time as you do as the summer time.

"It's easier to produce milk when you have grass, so over the summer it's a lot harder and costs you a lot of money to produce."

He said the industry continued to face challenges.

"Milk hasn't gone up enough in the last 20 years, it's not much more than it was 20 years ago and all the costs have gone up so much," he said.

"We could milk 120 cows years ago and we were making more money than what we are today.

"The money's not in it like it used to be."

He said it was a comfort to have a dairy giant like Bulla provide stable and regular income to the farm.

"It's a big incentive, it must be easier for Nathan to get out of bed early in the morning knowing he's going to make a dollar for the day," he said.

Nathan left school at 15 to follow his parents' footprints and pursue a farming career.

He said there weren't many young farmers left in the business, with many getting out because it's too hard.

"There's not a lot of younger ones my age in the dairy industry, I'm lucky that the family farm has continued on which makes it easier," he said.

"If the milk price continues to stay the way it is or go up a bit it sure does make things easier."

Gerard said those looking to get into the dairy industry shouldn't be discouraged.

"Definitely get into it, they've got to enjoy it that's the main thing. If they don't enjoy it then it's no good because you have your tough years and you've still got to work for very little," he said.

"But you do get your good years, weather wise and financially, so that's icing on the cake when you get those years.

"It's been a great life for us."

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