Dive Brief:
- Coca-Cola has selected New York state as its “preferred location” for a new Fairlife production facility costing an estimated $650 million, Gov. Kathy Hochul said in a statement.
- The 745,000-square-foot facility in Webster, New York is expected to create up to 250 new jobs. Coca-Cola expects to break ground on the project this fall and have the facility operational by the fourth quarter of 2025. It will be the largest dairy processing plant in the Northeast.
- Fairlife has been a big winner for Coca-Cola recently as the beverage giant evolves into a “total beverage company” and invests in brands that have a long runway for growth. Last year, Coca-Cola said Fairlife topped $1 billion in annual retail sales for the first time.
Dive Insight:
The New York plant would be Fairlife’s third in the U.S. Coca-Cola has facilities in Coopersville, Michigan and Goodyear, Arizona.
“Consumer demand for fairlife products is at an all-time high, and a new production facility will allow us to significantly increase capacity and deliver fairlife to even more households across the country,” Tim Doelman, Fairlife’s CEO, said in a statement.
He added that as the brand continues its expansion in the Northeast, the New York location’s proximity and access to dairy farmers “make it an excellent location to support our next phase of growth.”
Coca-Cola is the latest large CPG company to build a new plant or expand an existing facility to prepare for an increase in sales of a product. Mondelēz International, Nestlé, J.M. Smucker and Post Holdings are among the food and beverage to make multi-million-dollar announcements in recent years.
While Coca-Cola is best known for brands such as Sprite, Dasani and its namesake soda, the Atlanta-based company has moved aggressively to build out a portfolio that is broader and, in many cases, healthier.
During CEO James Quincey’s tenure, Coca-Cola has purchased or acquired the remaining stakes in brands it didn’t already own including Fairlife, sparkling water offering Topo Chico and sports drink line BodyArmor. At the time, Coca-Cola has sold or ended production of Zico coconut water, Tab soda and Odwalla juice to focus on more profitable, faster-growing products.
Coca-Cola acquired the remaining stake in Fairlife, which makes ultra-filtered milk and dairy products, from its joint venture partner Select Milk Producers, a dairy cooperative, in 2020. Coca-Cola previously owned a 42.5% minority stake. Financial terms of the deal were not disclosed. The ultra-filtered milk process removes the lactose and much of the sugar and leaves behind more of the protein and calcium.
Fairlife, which launched in 2012, started with a high-protein milkshake aimed at athletes and has since expanded into other value-added dairy products, including its popular milk and ice cream.
The brand has grown nearly 30% year to date and currently a quarter of all U.S. households purchase a Fairlife product, Coca-Cola said, citing Nielsen data.
