Innovation playing a bigger role

Research and development are important says Fonterra global operations chief operating officer Robert Spurway.

Fonterra spends more than $80million every year on research and development, and global operations chief operating officer Robert Spurway says it "is one of the most important factors shaping the dairy industry today".

"Dairy is an increasingly competitive sector globally, and as more players come into the game the onus is on manufacturers to find ways to differentiate themselves through their service and product offering," he said.

There's little doubt that innovation will play an increasingly important role in deciding which dairy companies will best meet existing and emerging customer demand," he said.

Fonterra led the world in exacting science, he said.

Products like lactoferrin - the tiny protein dubbed 'pink gold' that the co-operative extracts from milk and fetches prices many hundreds of times higher than wholemilk powder - or instant quick frozen mozzarella, which cuts down the maturation time of the cheese from months to hours were both the result of Fonterra's investment in R&D, Mr Spurway said.

"The difference between a product that is at the cutting edge of the market and one that sits somewhere in the middle can come down to a few degrees Celsius during production, the angle of a few pipes, or the geometry of a particular vat.

"Our investment in dairy R&D is what allows us to make the most consistent milk powders on the market, UHT cream that is nearly impossible to over-whip, or lactose that is so pure that it can be used to deliver medicine in asthma inhalers."

Fonterra also worked alongside the government's Primary Growth Partnership in the delivery of each of innovation.

Mr Spurway said the team at the Fonterra Research and Development Centre had some special concepts in the wings.

"Product development never stops and, from what I've seen, we can expect some exciting developments in the very near future."