As Fonterra faces a future of declining milk volumes, the country’s largest dairy company is looking to eke out more value from each liter of milk and is turning its focus to the growing US$66 billion (NZ$100b) global health and wellness dietary supplement market .
Fonterra plans to launch consumer products for improving cognition, sight, and stress over the next few months. The development of products for brain health draws on the company’s expertise in pediatric nutrition and reflects an increased awareness of the importance of mental health.
“One of the things that has really come to light through Covid is about cognitive health,” says Fonterra’s Asia Pacific chief executive Judith Swales.
“We know that health and wellness, immunity and cognitive health are very much on the agenda for consumers. Covid has brought that into real focus for consumers.”
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People are spending more time in front of screens, leading to eye strain and issues with blue light which disrupts sleep, and they are more stressed, Swales says.
The company is tapping a global trend towards natural foods with health benefits that’s been accelerated by Covid.
It has partnered with the Langer Lab, the world’s largest academic biomedical engineering lab, and plant-based ingredients companies to develop the products which have a buttermilk powder base rich in phospholipids.
Fonterra has trade marked ThinkSharpwhich includes the key nutrient phosphatidylserine to support memory, focus, mental processing and creativity; Pro Sight, that supports eye health and visual performance, blending lutein, zeaxanthin, vitamin A and riboflavin; and Stres Leswhich includes vitamin C, riboflavin and vitamin B6 to help stabilize mood, improve sleep and encourage better focus.
People are spending more time in front of screens, leading to eye strain and issues with blue light which disrupts sleep.
The company has developed and licensed a 40-minute online brain fitness test which measures 12 different areas such as deductive reasoning, processing speed, and reaction times which it has trialled with a cross-section of people including e-gamers, corporate professionals and badminton players.
People are encouraged to test themselves again after taking the product for 28 days.
“A lot of those people that have been doing it say they have seen quite a noticeable difference,” Swales says.
Fonterra is looking to partner with another firm to bring some consumer products to market in the next three months. It expects the products would be popular in China and the US, but plans to test the concept closer to home before launching further afield.
The dairy company plans to increase its investment in research and development by more than 50 per cent to $160 million a year by 2030, with $60m of that targeted at developing ‘active living’ products.
It has a team looking into nutrition science to highlight areas where the co-operative has a competitive advantage, given it already supplies ingredients such as complex lipids for cognition, proteins for mobility, and probiotics for immunity and digestion.
“You’ll hopefully start seeing Fonterra trying to break out of our old ways of doing things, and looking at new ways to address consumer problems using dairy as a platform,” Swales says
Fonterra expects the switch to higher value products will result in it sending less through its core ingredients channel, leading to higher margins and profitability.