New Global Markets chief executive Judith Swales. Photo / Supplied
New Global Markets chief executive Judith Swales. Photo / Supplied
Dairy giant Fonterra is presently identifying different global markets and new products for its science and innovation strategy to “drive more value from every litre of milk”.
New Global Markets chief executive Judith Swales, who joined the co-operative 10 years ago, said there was a wall of milk that got bigger and bigger every year but now production was flat.
“With costs on farm and environmental constraints coming, staying flat will be a good result but we have to drive more value.
“Bringing a choice about where we put the milk to create maximum value is the role of Global Markets. We need a united organisation to look at those markets where we are going to make the most money for our shareholders.
“We’ve got these amounts of great solids, proteins and fat, and where do we put them. Who do we partner with?” said Swales.
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Fonterra, the sixth largest dairy company in the world with a 30 per cent global exporting share, distributes its products into three regions — AMENA (Africa, Middle East, Europe, North Asia and Americas), Asia Pacific (including New Zealand and Australia), and Greater China.
Now it has created the Global Markets region, for future developments, made up of 5300 people across 27 markets, 83 nationalities and hundreds of cultures cutting across four generations — Baby Boomers, Gen X, Millennials and Gen Z.
A new leadership team was formed in October under the guidance of Swales, who moved from the role of chief executive of the Asia Pacific region. The team has so far met once.
“We need to map the markets,” said Swales. “Who values innovation, our sustainability story and low carbon footprint? Who’s willing to pay for it?
“The likes of United States have a great love of protein, and North Asia food security. There are pockets of very high-value markets, and we really need to know how we partner with big customers in those markets,” said Swales.
Farmers are now collecting more data to back up Fonterra and New Zealand’s sustainability story — what they are putting on the land, what they feeding their calves, how the cows are looked after; somatic cell counts, and how much water is consumed.
“Our farmers are working hard for us to make the sustainability claims and we need to make sure we are commanding a premium for that,” Swales said.
She suggested some of Fonterra’s biggest customers may switch from Europe to New Zealand for their dairy-based supplies, such as ingredients, to take advantage of their own sustainability claims.
“There are opportunities without doing any more than shifting the source of supply. We’ve got a natural advantage given we follow the grass curve, and we need to continue to do more on farms to reduce greenhouse gas emissions. Obviously, finding a way to reduce methane is something of a holy grail,” said Swales.
Fonterra has been running a two-year trial in Tasmania to see if using Asparagopsis seaweed as a supplement feed for dairy cows can reduce methane.
In partnership with Sea Forest, one of the few licenced producers of seaweed for cattle feed, the trial and production is being expanded to multiple farms. Fonterra has first access to this potential seaweed solution.
At the recent National Fieldays, a joint venture between the Government and Fonterra, Silver Fern Farms, Ravensdown and others were announced to invest in new technology to reduce methane emissions. Fonterra is also partnering with Nestle on a carbon-zero farm.
The cooperative has already teamed up with VitaKey Inc, whose precision nutrition technology came out of the Massachusetts Institute of Technology. The emerging area of research seeks to deliver the right nutrients in the right amount to the right part of the body at the right time.
Fonterra is looking to design dairy products that incorporate targeted and time-controlled release of specific dairy nutrients, starting with probiotics, in a way that locks in the freshness for longer and allows the nutrients to be more active and beneficial in the body.
Swales said “one of the things we’ve done well is innovating with the times. Muscle health was a problem. We developed a whole protein portfolio, with Anlene being a leader in that field, and now everybody has got calcium.”
Anlene, the number one adult milk brand across Southeast Asia, was specially formulated to support healthy muscles, joints and bones.
“It’s looking ahead to the next horizons,” said Swales. “People are concerned about immunity and digestion, and mental health and wellness. We have great solutions in all those places.”
Fonterra has just launched the Biokodelab range of supplements to support brain performance of adults (mental clarity), relieve stress, and build digestion and immune health.
High-value proteins are also on Fonterra’s radar. “Whereas before it was bone, now it’s about protein and staying active for longer. Over the next three years there will be 1.6 times more 80-year-olds,” said Swales.
Consumers in Australia can buy yoghurt that has 20 grams of protein in a serving. The protein-loading can reduce the need to buy and eat too much meat.
“We’ve developed technology that allows that (yoghurt) product to taste good. It used to be that protein was really claggy in your mouth but now it’s got a great mouthfeel,” said Swales.
“We continue to push into frontiers of where consumers are going and what is on their mind. If you produce proteins, then obviously you have to produce cheese.
“We have Mainland cheese and Bega brand in Australia. We have that real balance of having the cheese to sell into our food service business — which is bouncing back after a hard time in Covid — and the protein to global customers. “Even though food service shut down a bit, we were able to direct products to the consumers. They were cooking pizzas and pasta sauces at home. We went from making 5kg bags of mozzarella to 200g bags for home consumption.
“We have benefited in the last three or four years from the optionality of our different channels and our ability to move between them depending on where the most value can be created,” said Swales.
“What lifts us up is that the changes happening in the world play into our strengths. There’s the rise in health and wellness and demographic shifts in terms of growing middle class through Southeast Asia where we have lots of people on the ground.”
Swales said the urbanisation and digitally connected consumers and their need for convenience and eating out played into Fonterra’s e-commerce and food service businesses.
“We are also playing into sustainable living and that’s one of our three pillars. The unknown for us will always be geopolitical. China is a really important market to us and will continue to be. But we will build stronger business outside China and that is the role of Global Markets.”
Tuning up the mind
Fonterra’s scientists have packed in plenty of research and development to produce of range of supplements to support the brain performance of adults.
The aim is to keep brains fighting fit to take advantage of infinite possibilities in front of them, as Fonterra moves deeper into becoming a world leader in dairy nutrition, science and innovation.
The issue the scientists tussled with was that people spend eight hours plus a day looking at an illuminated screen on a computer. It’s how they connect, work and unwind. But it takes its toll on their brains, bodies and eyes, particularly macular or retina health, colour perception and vision.
So, the scientists wanted to solve the problem of the blue light from digital screens messing with natural hormone production and sleep cycles, and getting the body out of sync.
They went to work and came up with the Biokodelab supplements in pill form to fight against the effects of blue light.
Photo / Supplied
Using New Zealand pasture-fed dairy as the platform, with supporting essential vitamins and plant-based ingredients, the Biokodelab range aims to support mental clarity, stress response and immune health.
The range is based on three ingredient bundles to introduce the right nutrients to support the specific needs of modern-day brain performance.
There’s the Phosphatidylserine nutrient — it is only in low levels in the average modern diet — incorporated in the Focus Plus ThinkSharp supplement for alertness and mental clarity. This also includes B vitamins and Pantothenic acid.
The Calm Plus StresLes supplement includes a specialised combination of vitamin C, riboflavin and vitamin B6 to help with mood, energy and stress management.
There’s Probiotic Plus for digestion and immune health and Pro-Sight which contains lutein and zeaxanthin nutrients, sourced from marigold plants, to help the retina filter blue and ultraviolet light.
Pro-Sight also includes vitamin A and riboflavin, essential ingredients for maintaining macular health.
Fonterra is an advertising sponsor of the Herald’s Dynamic Business report.
