From weather camera stations to QR coded cans, Fonterra is making farmers more sophisticated and is attacking the ingredients, protein and food services markets, writes Graham Skellern.
Dairy farmers around the country have the opportunity of becoming techno buffs and expert meteorologists as well as suppliers of quality milk.
Fonterra is rolling out a new online platform, called Agrigate, that displays all the farm's key information on a dashboard in real time. It is a world first.
Developed by Fonterra Farm Source and the Livestock Improvement Corporation, Agrigate is designed to help farmers improve their farm performance through the use of their existing data.
Agrigate allows them to assess the interaction between different on-farm factors such as animal health, milk production, financials, pasture cover and fertiliser applications.
The farmers can track what effect each factor has on the others - for example, the impact of herd size, milking frequency and fertiliser use on pasture cover, milk volume and quality, and milk solids production per hectare.
The online dashboard, available on the farmers' laptops, tablets and smartphones, is a "one-stop shop".
Judith Swales, Fonterra's Chief Operating Officer Velocity and Innovation, says Agrigate enables farmers to understand the dynamics that are happening on their farms so they can make better choices and better decisions.
"They don't need to operate their farm in a vacuum. They can benchmark their performance against other similar farms. It's hugely exciting.
Swales says Agrigate will make dairy farming more efficient and give New Zealand an edge - it will make farmers even more competitive.
Agrigate users will also have access to up-to-the-minute, localised weather conditions.
Fonterra has linked up with the MetService and BloomSky to trial on-farm weather camera stations that deliver information in real time.
More than 70 BloomSky weather stations are being installed by farmers across the country. MetService will use observations from the devices to provide forecasting and greater season insights through data analytics to the Agrigate users.
The system measures temperature, humidity, rainfall, wind speed, wind direction, UV and barometric pressure to give farmers a detailed view of their farm's climate.
"Farmers will be able to pinpoint weather conditions to their own property rather than within a 20km radius," says Swales.
"They can make good management decisions such as when to irrigate, when to cultivate a paddock and when to move stock."
Innovation is certainly at the forefront of Fonterra's business as it seeks to keep ahead of the play. Not only is Fonterra making its farmers more sophisticated on the farm, it is producing new value-added products in the ingredients, protein, food services and food safety segments to drive export sales.
Fonterra wants to capture a significant slice of the $10 billion global protein market.
"There is an insatiable hunger for protein globally," says Swales.
"People can now send away their saliva for DNA testing and the results tell them what they can eat.
"Consumers are now saying they want their diets to be unique to them.
"They are willing to pay, and we are turning the wheel towards higher value products and commanding the highest dollar for milk coming out of New Zealand," she says.
Fonterra has introduced a range of Anchor protein+ milk, yoghurt and smoothie boosters which help people track their protein intake throughout the day. Fonterra recommends that consuming 90 grams of protein a day meets the needs of most healthy adults.
NZMP, Fonterra's dairy ingredients business, has developed SureProtein for the sports nutrition market (drinks and energy bars). In a world first, the ingredient is made from lactic casein whey instead of cheese whey, and has 10 per cent more protein and is lower in fat, sugar and carbohydrate than similar products.
Fonterra is also partnering with chefs around the world and increasing its focus on the food services industry. It wants to tailor products to taste profiles in different markets.
Presently, Fonterra's food services business is worth $2 billion and it plans to increase the value to $5b within six years.
It's had a great start. Fonterra's mozzarella cheese, which takes six hours to make, is used on half of the pizzas made in China.
Its tea macchiato is also popular in China, with locals queuing outside tea houses to taste the New Zealand-made product. "Who would have thought you'd put cream with Chinese tea - the macchiato is taking off," Swales says.
Fonterra has launched its QR coded Anmum infant formulated milk powder in the Chinese market. "Consumers can see where the product comes from - for the Chinese mum, this counts for them," says Swales.
The QR code is part of a programme to track and trace ingredients and products electronically, from the raw milk source on the farm through to retailers selling the product.
The QR code on the Anmum container connects consumers via a mobile phone app to a webpage with information that verifies the authenticity of the products and its batch number.
Consumers can also scan the can at any stage after they have bought it and get up-to-date status information about the product.
Fonterra wants to have total electronic traceability to world-class standards by 2020. It will be able to test the milk in seconds - the quality varies by farm and by region - and decide which factory it should be sent to for cheese, butter and milk power processing.
"We want to put our milk into the best facility and get the best value from it," says Swales.
"We need to continue to innovate and not rest on our laurels - if we are not careful, we could easily get disrupted."