Plant & Food Research-Anagenix tie up on the verge of reaping benefits

An apple variety bred by Plant & Food Research. Photo / File

Crown research institute Plant & Food Research is about the reap the benefits from a new commercial partnership - the Innovation Cell - a venture aimed at bringing together science and marketing expertise to rapidly develop, prototype and launch new products and ingredients that promote health and wellbeing.

The partnership began when it teamed up with Anagenix, a company that makes products that leverage bioactives found in fruits and plants grown in New Zealand. "It's a collaboration between a large organisation that is focused and excellent at science and a small, nimble organisation that has to run fast on its feet and grow sales in order to survive," said Anagenix managing director Chris Johnson.

According to Plant & Food Research group general manager commercial David Hughes, the aim was to get a product to market quickly: "It may not be the perfect product, it will just be a product to market. The plan is to simultaneously develop new versions of the product and deep the science we've got."

The goal was to avoid the approach "where you might try to get a perfect answer first and be late to market. We want to do the opposite, we want to be agile and fast moving," he said.

Hughes said the partnership - the first of its kind for Plant & Food Research - was aimed at testing a business model that allows small businesses to tap into scientific resources. The aim is to roll it out to other companies. "We aren't just prototyping products but we are prototyping a business model," he said.

"Science is a big ticket item and most of the science structures we have in the country actually favour large organisations with long timelines so we are trying to figure out ways of doing that with small companies," he said.

Innovation Cell's first product is BerriQi, a liquid supplement where the main ingredient is the boysenberry, largely grown in Nelson. New Zealand is the world's largest producer and international marketer of the fruit, which, according to Innovation Cell, has properties that help repair damaged lung tissue and reduce inflammation and mucus production. New Zealand produces around 3,000 tonnes of the fruit a year with the bulk going to export. Exports were around $4 million in 2016.

Innovation Cell is a co-funded unregistered partnership, Johnson said. Anagenix will pay a royalty on sales into Innovation Cell that will then be distributed among the partners, according to Johnson. It opted to target China due to growing concern about the impact of pollution in Asian nations, in particular, urban centres like Beijing and Shanghai.

Johnson said the main market in China are mothers with children "because they will spend any amount of money to keep their kids safe and there is a real fear factor in China that pollution is really damaging their lungs," Johnson said.

Johnson told BusinessDesk he expects to sign the first distribution agreement in Shanghai on June 19 with a company that specialises in the multi-level marketing sector. "That is our first cab off the rank," he said.

He said they are currently in discussions with five sizeable distributors, including large nutraceutical players in China and a pharmaceutical company. He expects to sell around 6 million doses of BerryQi in the first year after the deal is inked and said the pricing would be around 20 to 29 renminbi per dose (between $4.15 and $6.00). He did not provide any information on the cost.

Longer term, they will look to develop the product as a powder "because it's lighter and easier to export around the world and a lot of customers are asking for powder, but that's phase two," he said.