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Home / Business

Fonterra inks blue chip dairy nutrition science deal with MIT heavyweight

By Andrea Fox
Herald business writer·NZ Herald·
4 Nov, 2021 01:00 AM4 mins to read

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NZ milk has 12 yet untapped micro-nutrients, says Fonterra. Photo / File

NZ milk has 12 yet untapped micro-nutrients, says Fonterra. Photo / File

Fonterra has signed a deal with a US company that's a world force in biotechnology and nutrition science to turn New Zealand milk probiotics into premium-priced health enhancers.

The big dairy cooperative is to collaborate with VitaKey Inc which specialises in the precision delivery of nutrition, an emerging research area that aims to deliver the right nutrients, in the right amount, to the right part of the body at the right time, while extending shelf life and cutting food waste.

VitaKey technology for nutrients is based on technology licensed from the Massachusetts Institute of Technology (MIT) with which Fonterra has an association, and developed at the Langer Lab, the largest academic biomedical engineering lab in the world.

VitaKey was co-founded by science world blue blood Dr Robert Langer, a professor at MIT and co-founder of Moderna, one of the first Covid vaccine developers.

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Langer's science commercialisation efforts have produced more than 40 biotech companies with an estimated market value of US$250 billion ($350b).

The mother lode for the collaborative deal is sitting in Fonterra fridges in Palmerston North.

The company's research centre there is home to one of the world's largest dairy culture libraries, with more than 40,000 culture strains. The potential of many of these strains hasn't even started to be explored yet, Fonterra said.

Two of the strains address health concerns such as digestive issues and immunity and according to Fonterra, are recognised as being among the world's top five probiotics.

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Under the deal, the commercial aspects of which are confidential, Fonterra will use VitaKey's proprietary technology and solutions to design dairy products for the targeted and time-controlled release of specific dairy nutrients in those products, starting with probiotics.

Langer, who oversees the work of 150 MIT researchers, told a media briefing Fonterra is the only dairy company VitaKey is working with. Probiotics was an exciting area for nutrition science with space agency Nasa planning to deliver probiotics in food to astronauts on the Mars mission

As for whether they will be Fonterra probiotics, Langer said "we will see what we can do".

The aim of precision delivery of nutrients is to lock in freshness for longer and allow nutrients more active and beneficial to the body, said Fonterra, which called the collaboration "transformative".

The deal is in line with Fonterra's new long term business strategy of unlocking dairy's nutrition and the value of the special provenance of New Zealand milk through innovation, R&D and development of specialist IP products. The company, owned by 10,000 New Zealand dairy farmers, aims to be a world leader in dairy nutrition science, its new direction arrived at after a U-turn on a global milk volume strategy which delivered disastrous financial results which saw shareholder wealth destruction of $4b in 2018 and 2019.

As for when the new venture with VitaKey could start delivering cash for Fonterra shareholders, there's cautious optimism it could be in 5-10 years for the wider science development ambitions.

However, Fonterra's chief executive for the Asia-Pacific region Judith Swales, a qualified microbiologist, believes some probiotic returns could be evident in two years.

There was the potential to use VitaKey's existing technology on some existing Fonterra products, she said.

Most of the commercialisation of products would be done at Fonterra's Palmerston North R&D centre.

The first step would be to stabilise Fonterra's probiotics and deliver them to the digestive tract, leveraging VitaKey technology developed in the Langer Lab.

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Langer said an example of stabilising micro-nutrients was the work his team had done on Vitamin D. It had been exposed to light and boiling water and had shown "a nearly 100 per cent recovery" using VitaKey technology, compared to 25 per cent and lower when not using the technology.

At least a dozen nutrients had been stabilised with no side effects - all the work and results accepted by, and published in, the world's toughest science and medical journals, he said. The shelf life of stabilised nutrients had been proven to extend by 18 times, also a result published in leading science journals.

Fonterra intends to introduce stabilised micro-nutrients like Vitamin D into its products.

VitaKey said the world was seeing the highest ever rates of consumers being obese while malnourished, which along with Covid-19, was underscoring the need for solutions for health and wellness.

Fonterra's Swales said because the nutrients would be encapsulated and highly targeted, less milk would be used in production, making farmers' product go further and reducing food waste.

The technology behind the new products would command a price premium, but because they would go further and last longer, the price impact would even out.

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