Fairlife: A Business Model of the Future

Is Sustainable Agriculture Dependent on Industrialized Food Systems?

Coca-Cola plans to lean into its sustainably sourced, nutritionally enhanced Fairlife milk line in 2025. The business model which pairs Coca-Cola’s well established distribution system with dairy farms focused on sustainable methods and animal welfare practices, has found a premium niche in the health and wellness industry. The business model has been a win for the dairy sector, for state economies that depend on milk production and for the sustainability movement. It appears to be a perfect pairing of big business and small time agriculture and could be a model mimicked in the future.

Coca-Cola and Fairlife

The Fairlife brand can be found in 80% of supermarkets in the United States, a feat achieved in a short five years time. Products sport eye appealing packaging similar to minimalistic brand styles associated with healthy and dairy free products. The brand has expanded beyond protein packed milk into ice cream and protein shake lines. As a result, Fairlife has become a kid-approved, mom-friendly and fitness favorite option consumers are willing to spend money on, even if it is twice as expensive as traditional milk. 

And, the brand is growing. Coca-Cola has built an Arizona facility and is currently building a New York facility where milk is specially processed to produce the beloved protein rich low carbohydrate products. In doing so, Fairlife is revitalizing the dairy industry that has lost hundreds of herds in the last decade while battling consumer perspectives on sustainability, nutrition and animal welfare. 

What is the Key to Fairlife’s Success?

Some argue that Fairlife’s success is largely due to the fact that Coca-Cola managed to choose to diversify its portfolio and include milk just as the general public jumped on a protein trend and started to pay attention to animal welfare. Others maintain that internationally successful companies like Coca-Cola are integral to the success of sustainability, nutrition, and small farms in the United States; to which point we should look to Fairlife as the perfect example.  

Brands like Siesta, built up from one family committed to nutrition and sustainability, are criticized for selling out to big companies while Fairlife, who achieved the same goal but was backed from the start by big business, is touted as a hero for many a noble cause. In the end, both brands maximized production and impact by partnering with well established distribution systems.

Can Big Food Manufacturers Support Sustainability?

Is the push to dismantle big ag in favor of small family owned farms missing strategic partnership opportunities? In the United States agriculture has undergone extreme consolidation. Roughly 70% of Americans worked in agriculture in the 1800s which dwindled to 40% in the 1900s and sits now at around 2%. Yet, we are still the most food safe country in the world due to industrialization and big ag. Is it possible to think that big ag could be dismantled and food production could keep up with population demands?

Perhaps it’s more realistic to leverage both the benefits of small farms, who can better manage sustainable practices and animal welfare, and the scalability big companies can offer small farms with innovative technology and widespread markets. Fairlife, who has officially surpassed $1 billion in sales, credits its growth to Coca-Cola’s robust distribution system coupled with the upfront capital Coca- Cola can invest in innovative processing techniques and new building projects. In essence, their sheer size offers a measure of predictability for Fairlife. So much so that the state of New York plans to financially invest in Fairlife’s newest facility as well. There’s an opportunity to support their own dairy farmers by contributing to market expansion and their investment demonstrates a belief in a productive relationship between small farms, big manufacturing companies and consumer demands for nutrient dense food options. 

Is Fairlife the business model of the future? Will sustainable farming and nutrition enhanced endeavors ultimately need the streamlined industrialization American food manufacturers have already built if they hope to be successful? Big food companies are not blind to consumer perspectives. In fact, more food manufacturing companies are partnering with small farm innovators to take their sustainable ideas and deliver them to the masses. Fairlife is already setting a new bar for the relationships food manufacturers can have with food producers.