Case Study: Alpine Dairy Inc.

Alpine Dairy Inc., a Canadian yogurt manufacturer,

was founded in 2012 with the vision of producing
high-quality, sustainable yogurt products that cater
to health-conscious consumers. The company’s
mission is to craft wholesome, flavorful yogurts that
nourish both people and the planet. Their focus is
on creating products that combine local, natural
ingredients with cutting-edge nutritional science to
support the health of our customers while minimizing our environmental footprint. Alpine Dairy
has established itself as a premium brand, distinguished by its commitment to quality and
environmental responsibility.
Over the past five years, the company has experienced significant financial growth. In 2023,
Alpine Dairy reported $50 million in revenue, a 12% increase from the previous year, with
profits reaching $5 million. The company currently holds an 8% share of the Canadian yogurt
market, primarily within the premium segment. Despite its modest market share, Alpine Dairy’s
revenues have been trending upwards due to the increasing demand for healthier and
sustainable food options among Canadian consumers.

Alpine Dairy’s target market consists primarily of health-conscious individuals aged 25 to 45,
residing in urban and suburban areas of Canada. These consumers are typically well-
educated, employed professionals or young families, and tend to have higher-than-average
household incomes. Demographically, the company’s core customer base skews slightly
female, with women making up 60% of their consumer segment. This target group is
particularly interested in fitness, wellness, and healthy eating habits. They often seek products
that align with their lifestyle choices, favoring brands that promote natural ingredients,
sustainability, and ethical sourcing.
Psychographically, Alpine Dairy’s customers are defined by their value-driven purchasing
behavior. They prioritize brands that reflect their personal values, especially those that support
environmental sustainability and social responsibility. These consumers tend to be early
adopters of wellness trends and are willing to pay a premium for products they perceive as
being healthier or more ethical. They prefer clean-label products with minimal processing, non-
GMO ingredients, and functional benefits, such as probiotics for digestive health. Moreover,
they actively seek out brands with transparent supply chains and a strong commitment to local
communities, which aligns with Alpine Dairy’s emphasis on local sourcing and sustainable
production practices.
 The company offers a range of products, including Greek yogurt, organic
yogurt, and plant-based alternatives made from almonds and oats. Unique
flavors, such as “Maple Pecan” and “Wild Blueberry,” differentiate the brand
in a highly competitive market. Each of these products is developed with a
focus on probiotics and digestive health, further solidifying the brand’s
reputation as a leader in health-conscious food products. The clean-label
promise, with a focus on minimal processing, is a key part of their product
differentiation strategy.

Alpine Dairy has also developed several competitive advantages in the market. The company
is known for its sustainable packaging, using recyclable and biodegradable materials for its
yogurt containers. Alpine Dairy’s packaging is designed not only to be environmentally friendly
but also to appeal to eco-conscious consumers through its minimalist design and clear
labeling, which highlights key product attributes like “non-GMO,” “organic,” and “locally
sourced.” This packaging strategy reinforces the brand’s premium positioning and commitment
to sustainability, while also serving as a key point of differentiation from competitors using
traditional plastic containers. Consistently, they employ a premium pricing strategy, which
reinforces the perception of high quality, and they rarely use sales promotions. Their marketing
campaigns emphasize Alpine Dairy’s Canadian roots, local sourcing, and sustainability efforts,
helping the brand resonate with consumers who prioritize ethical and environmental concerns.
The company’s distribution strategy focuses on securing placements in major grocery chains
and specialty health food stores throughout Canada, ensuring extensive market reach.

The company’s supply chain is a cornerstone of its sustainability strategy. Alpine Dairy sources
85% of its ingredients from local Canadian farms, primarily from family-owned dairy operations
in Quebec and Ontario, ensuring that its milk supply is hormone-free and ethically produced.
Alpine Dairy handles production in-house, with two manufacturing facilities located in Ontario
and British Columbia. This enables the company to closely monitor product quality and
maintain tight control over its manufacturing processes. In terms of distribution, the company
uses third-party distributors, with a focus on minimizing transportation emissions to reduce its
environmental impact.

Corporate social responsibility (CSR) is central to Alpine Dairy’s brand identity. The company
has implemented a “zero waste” policy in its production facilities and is on track to become
carbon-neutral by 2027. Additionally, Alpine Dairy donates 1% of its profits to Canadian food
banks and partners with organizations promoting sustainable farming practices and efforts to
reduce food waste. These initiatives have not only strengthened the company’s relationship
with consumers but also contributed to its positive brand reputation in the market.

Now, Alpine Dairy is considering expanding its operations beyond Canada. With a strong
foundation built on quality, sustainability, and brand values, the company must identify where to
expand its operations, as well as determine the best market entry strategy and develop a
comprehensive marketing plan for this international expansion.

New Zealand

New Zealand has a strong dairy industry and is a member of the OECD. The country is known
for its high-quality dairy products and is one of the largest exporters of dairy globally. The dairy
sector plays a significant role in New Zealand's economy, with a focus on sustainable practices
and innovation in production.

Market Size and Growth Potential:

New Zealand’s dairy industry is the largest export sector, with the country
being one of the top global exporters of dairy products. The domestic yogurt
market is relatively small but growing, fueled by increased consumer demand
for premium and health-oriented products. Yogurt consumption is expected to
rise as New Zealanders shift towards healthier lifestyles, creating growth
potential for high-quality and sustainable yogurt brands like Alpine Dairy.
Consumer Analysis:
The median household income in New Zealand is approximately NZD 80,000 (about CAD
63,000), with higher incomes in urban centers like Auckland and Wellington. This income level
suggests a population capable of spending on premium food products, particularly in the
middle to upper-income brackets.

The primary target market for Alpine Dairy would be health-conscious

individuals aged 25-45, similar to its Canadian market. This group values
wellness, clean eating, and sustainable products. New Zealand
consumers tend to prioritize food quality and origin, with many willing to
pay more for locally-sourced, organic, and eco-friendly products. Yogurt
is becoming more popular among young professionals and families, who
seek nutritious and convenient options.

New Zealand’s population is predominantly urban, with key demographic clusters in Auckland,
Wellington, and Christchurch. Consumers in these regions are increasingly adopting health-
driven lifestyles, focusing on plant-based alternatives and functional foods like probiotics.
Psychographically, there’s a growing alignment between New Zealanders and Canadians in
valuing sustainability, local sourcing, and environmental consciousness, which would play well
with Alpine Dairy’s brand values.

Economic Environment:
New Zealand operates a mixed-market economy with a strong emphasis on international
trade, particularly in agriculture. Key economic indicators include a GDP of approximately USD
250 billion, a GDP per capita of around USD 49,000, and a moderate national debt level of
about 45% of GDP. The Human Development Index (HDI) ranks New Zealand high globally,
reflecting strong education, healthcare, and quality of life.

New Zealand's economy has experienced steady growth, although it has been impacted by
recent global economic trends and the post-pandemic recovery phase. The dairy sector
remains a key industry with strong import/export activities. While dairy products account for a
significant share of exports, the country is open to importing specialized products that meet
growing consumer demand.

International Trade:
New Zealand is a member of multiple trade agreements, including the Comprehensive and
Progressive Agreement for Trans-Pacific Partnership (CPTPP), enhancing its trade relations
with several key markets, including Canada. The openness of New Zealand's trade policy
creates opportunities for Canadian brands to enter the market with fewer barriers.

Regulatory Environment:
New Zealand has relatively low trade barriers due to its commitment to free trade agreements.
However, tariffs and biosecurity regulations apply to agricultural imports, and labeling
regulations must comply with strict environmental and consumer protection standards.

Under the Food Act 2014, food manufacturers must ensure that their products are safe for
consumption and meet specific hygiene and safety standards throughout production,
processing, and packaging. For yogurt, this includes maintaining stringent controls on
temperature, pasteurization of dairy ingredients, and ensuring that the final product is free from
harmful contaminants like pathogens (e.g., Listeria or Salmonella). The MPI regularly audits
food businesses to ensure compliance with these safety requirements. Moreover, yogurt
products in New Zealand must adhere to microbiological standards set out in the Food
Standards Code, including limits on the presence of specific bacteria and yeast.
Labeling in New Zealand is also governed by the Australia New Zealand Food Standards
Code, and compliance is strictly enforced. Key labeling requirements for yogurt include:

➢ Ingredient Lists: All ingredients must be listed in descending order of weight, with clear
identification of potential allergens such as milk, nuts, and soy. Additionally, any
additives or preservatives must be disclosed.

➢ Nutritional Information Panel (NIP): The NIP must display

information about energy, protein, fat, carbohydrates,
sugar, and sodium content per serving. Yogurt products
claiming health benefits (e.g., "high in protein" or
"contains probiotics") must meet specific criteria before
these claims can be made.
 ➢ Country of Origin Labeling: Products must indicate their country of origin, which is
particularly important for imports. Since consumers often prefer locally sourced
products, this is a crucial aspect for marketing and brand positioning.

➢ Expiration Date: Yogurt must display a "use by" or "best before" date to ensure
consumer safety. Mislabeling or inaccurate expiration dates can lead to severe penalties
under New Zealand’s food safety laws.

➢ Health Claims and Allergen Warnings: Any health claims, such as “probiotic yogurt” or
“supports digestive health,” must be substantiated with scientific evidence and meet the
standards outlined in the Food Standards Code. Moreover, allergens must be
highlighted in bold or set apart for consumer visibility.

➢ Environmental Claims: If Alpine Dairy emphasizes its sustainable packaging,

environmental claims must comply with guidelines preventing false or misleading
information about recyclability, biodegradability, or environmental impact.

Labour Market:
New Zealand’s unemployment rate is around 3.9%, reflecting a healthy labor market. The
country has a strong agricultural and food production workforce, with significant expertise in
dairy. However, there may be competition for skilled labor due to the sector’s dominance in the
economy.

Currency Exchange Rate:

The exchange rate between the Canadian
dollar (CAD) and New Zealand dollar (NZD)
has shown moderate volatility in the past
decade, ranging between CAD 1 = NZD 1.10
and NZD 1.20. Recent trends show relatively
stable currency movements, but businesses
should still account for potential fluctuations
when managing financial risks.

Political Environment:
New Zealand operates as a parliamentary representative democracy. The current Prime
Minister (as of 2023) is Christopher Luxon, leader of the New Zealand National Party. The
party's ideology leans towards center-right policies, focusing on economic liberalism, individual
responsibility, and a commitment to enhancing public services while ensuring fiscal prudence.
The National Party promotes local sourcing and sustainability in agriculture, viewing these as
vital for New Zealand's economic growth and environmental integrity. They aim to balance
economic development with ecological responsibility, reflecting a modern interpretation of
conservatism. New Zealand is known for its political stability and relatively low levels of
corruption. It consistently ranks highly in global measures of governance and democracy. The
country has a strong tradition of upholding the rule of law, civil liberties, and a transparent
electoral process.

Cultural Environment:

➢ Power Distance: Both New Zealand and

Canada exhibit low power distance,
meaning hierarchical differences are
minimized, and collaboration across
levels is common.

➢ Individualism: Both countries are highly

individualistic, where personal goals and achievements are important.

➢ Masculinity: New Zealand leans more towards a balanced masculinity-femininity score,

similar to Canada, with an emphasis on work-life balance and quality of life.

➢ Uncertainty Avoidance: New Zealand has a lower uncertainty avoidance than Canada,
meaning it is more open to innovation and flexible business practices.

➢ Long-term Orientation: Both countries exhibit a pragmatic, long-term focus, valuing

future rewards over short-term gains.
Language:
While both New Zealand and Canada use English as their primary language, there are notable
differences in expressions, slang, and cultural references that may require interpretation or
translation.

Climate:
New Zealand’s temperate climate, abundant rainfall, and fertile land make it ideal for dairy
farming, with a robust infrastructure to support milk production. The climate supports year-
round pasture grazing, a key factor in the country’s competitive advantage in dairy exports.
This favorable climate would make sourcing local milk for yogurt production feasible if Alpine
Dairy expands into the country.

Availability and Quality of Infrastructure:

New Zealand has a well-developed transportation network, including efficient road, rail, and
port infrastructure, which supports both domestic distribution and international trade.
Significant investments have been made in infrastructure development, ensuring smooth
logistics for goods like dairy products. Ports like Auckland and Tauranga are major gateways
for exports and imports, providing strong access to global markets.
Competitive Landscape:
New Zealand’s yogurt industry is competitive, with key players such as Fonterra, Heidi’s, and
Yoplait dominating the market. Fonterra is the largest, known for its global reach and strong
distribution networks. Its competitive advantage lies in price leadership due to its scale, while
smaller competitors often focus on niche segments like organic or plant-based yogurts.

Main Competitors:

➢ Fonterra: As one of the largest dairy producers in New Zealand, Fonterra offers a wide
range of dairy products, including yogurt. It currently holds approximately 45% of the
yogurt market share in New Zealand. Their brands, such as Anchor and Piako, are well-
priced, highly recognized, and very popular among domestic consumers. Fronterra also
has a strong distribution network and has established loyal relations with its distributors.
➢ Heidi's: This brand focuses on premium yogurt products, catering to health-conscious
consumers. It currently holds approximately 16.7% of the New Zealand yogurt market.
Heidi's offers a variety of flavors and formulations, focusing on high-protein yogurts.
Their commitment to quality and local sourcing has helped them maintain a strong
presence in the marketThe Collective: A popular local brand offering gourmet and
probiotic yogurts with unique flavors.

➢ Chobani: Chobani entered the New Zealand yogurt market in August

2022 and has been expanding its presence significantly. By June 2023,
Chobani products were stocked in around 180 Countdown stores, and
the variety of products offered doubled within less than a year,
introducing new ranges such as Chobani No Sugar Added and Chobani
FiT. However, specific market share figures for Chobani in the New
Zealand yogurt market are not readily available. It is noted that the Greek yogurt
segment, which Chobani primarily represents, is growing rapidly and becoming a
significant part of the market.

Sustainability Profile:
New Zealand is committed to reducing its carbon footprint and is actively investing in
renewable energy initiatives. The dairy industry faces pressure to lower its methane emissions,
with the government and industry leaders working on sustainability practices, such as
improving animal welfare and reducing water use.
In-Class Discussion:
1. Summarize reasons justifying the choice of New Zealand as an opportunity for expansion.

➢ List 5 reasons why you chose the country listed above (i.e., focus on main advantages
selected country or/and main disadvantages of rejected country).
➢ Identify 2 potential challenges the company might face when expanding to the selected
country (i.e., focus on main disadvantages of selected country), and draft a contingency
plan to address the challenges.

2. Describe your target market in the new foreign market: relevant spending behavior,
demographic, lifestyle and psychographic descriptors

3. Select Entry Mode

Select entry mode, and justify your choice.

➢ Specifically, provide 5 valid reasons why you selected the specific entry mode (versus
others). Make sure to use arguments derived from your company and market analyses,
as well as course material (specifically chapters 7, 12, 13).
➢ Additionally, provide 2 potentially challenges that the company might face with the
selected entry mode and describe contingency plans that aim to address the
challenges.
➢ Describe entry strategy. i.e., What exactly will you do?

4. Select Competitive Positioning

* Competitive positioning refers to the strategic process of defining how a brand differentiates itself from
competitors in the minds of consumers. It involves identifying the unique value proposition and key attributes that
make a brand stand out, ultimately guiding marketing strategies and communications to ensure the brand
occupies a distinct place in the market.

Given the new competitive landscape and potentially new consumer profile, how should Alpine
position their offering in relation to what is already offered in the New Zealand yogurt market. In
other words, what gap are you filling?
5. Comprehensive Marketing Plan

➢ Identify your main strategy: local responsiveness or cost reduction (i.e., adaptation vs
standardization, respectively). Briefly explain your choice.
➢ Product and service: Describe the product(s) or/and service(s) the company will offer to
the foreign market. Justify choice.
➢ Pricing: Describe pricing strategy. Justify choice.
➢ Distribution: Describe distribution strategy. Justify choice.
➢ Communication: Describe communication strategy. Justify choice.

6. Ethical Consideration

➢ Identify one potential ethical issue the company might face during the expansion
process, and describe the ethical dilemma. Consider the following areas of potential
ethical misconduct: local sourcing, labor practices, environmental sustainability, cultural
sensitivity, or other (this is not an exclusive list of ethical issues in international
business).
➢ Identify a viable solution to the ethical dilemma.