The premium offerings are built on the company’s Lead With Pride farming accreditation and its B Corp business certification.
The inaugural customer is a prominent consumer brand owner in Asia.
Synlait paid an average premium of 25c/kg to its dairy farmers last season within the $7.30 payout, mostly for A2 milk and Lead With Pride suppliers.
But it won’t disclose the Made With Better Milk premiums payable by ingredients customers or the proportion of its annual production of 160,000 tonnes of milk powders that would have premium prices.
Departing chief executive Leon Clement says the premium ingredients offering rested on the sustainability credentials of the whole supply chain, from farms to customers.
Although well known for quality and food safety, he says New Zealand dairy ingredients needed to raise standards for differentiation in terms of environmental and social performance.
Director of sustainability and brand Hamish Reid says global consumers are seeking assurances that products are not just healthy, but sustainably, ethically and equitably produced.
“Our customers have been asking for this and we can now deliver upon the promise,” Reid said.
Made With Better Milk offers the opportunity for customers to differentiate their marketing on a supply chain that takes better care for people and animals, and generates better outcomes for climate, water, soil and biodiversity.
Lead With Pride is an internationally assessed farm assurance programme started in 2013, and 151 farms out of 276 in total were certified in FY2020.
Synlait faces headwinds this financial year from covid-19 difficulties affecting a2 Milk Company (a2MC), its biggest customer and a 20% shareholder.
The directors are unable to make a profit guidance and the company’s share price has halved over the past 12 months, from $7 down to $3.36 currently.
The a2MC share price was over $20 in May 2020 and has lost 60% of its value, currently sitting at about $7.50.