DESPITE a shaky global financial market, Warrnambool Cheese and Butter's chairman Frank Davis says the dairy industry is sitting on the cusp of an exciting opportunity.
He said Australia's cost-effective pasture-based systems and quality products were attractive to other countries, but one key challenge remained in meeting demand.
"We need to drive production from nine billion litres to 13b where it was before the drought," he said.
"I want to see a global dairy boom, but we need things like international trade barriers removed."
For WCB in particular, the company has embarked on several new projects including the recent multi-million dollar deal with Coles.
The new brand, Great Ocean Road, includes a range of cheese and milk products and will be available in stores from May.
WCB general manager retail dairy Bill Slater said the brand would mean additional production and ensure more jobs for suppliers and employees.
While Mr Davis likened the deal to "sleeping with the enemy" following the uproar over discounted home-brand milk, Mr Slater said it was a critical opportunity.
"This is a Warrnambool-owned brand and people have to understand we are not competing on the $1 a litre marketing scale," he said.
"This a premium product and we've done six months of feasibility studies to make sure this venture stacks up for farmers.
"This gives us a guarantee of 50 million litres a year onto the domestic market."
Not disheartened by the milk wars that have had a huge impact on Qld and NSW farmers, the south-west processor has also invested its time into another branded product, Sungold Jersey Milk.
"We've been watching to see how consumers respond to the milk over the past 12 months," Mr Slater said.
"We've had great feedback from coffee shops, because it froths better than other products."
Last week, the Jersey brand picked up a silver award at the Sydney Royal Cheese and Dairy Produce Awards.
At the moment, five farmers are supplying the brand, which is processed separately to WCB's original Sungold Fresh Milk.
And it seems the company has decided to put its eggs in many baskets, with Mr Slater saying the strategy spread many risks.
"We have plenty of other opportunities in the pipeline that will come to fruition in the near future," he said. "China is a market that we are looking at getting into."
While WCB was banking on a big production increase to meet all this extra dairy demand, Mr Slater said that was dependent on a number of different factors.
"We need to have a run of good seasons," he said.
But many producers' production decisions will be largely based on the farm-gate milk price.
"We pay a premium price to our suppliers," he said.
"The financial years of 2009-10 were tough for farmers, but has rebounded now and last year we paid the second highest price in WCB's history.
"There's huge growth in Asia and we are seeing good commodity prices, so far everything is looking good."
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