Farmers' call
OPINION: Fonterra's $4.22 billion consumer business sale to Lactalis is ruffling a few feathers outside the dairy industry.
And the fast growing number of Chinese people with chronic illnesses will welcome and need these products, the joint Massey University-Westpac forum heard.
Massey food scientist Professor Paul Moughan said Anlene, a milk drink designed to help avoid osteoporosis which is a big problem in elderly Asian women, has been a huge success.
Sales are $600m to $800m per annum and heading for $1b, he said.
"The profit margins on Anlene are very very high. If this country had 10 or 20 Anlenes we would be absolutely made.
"Our position in the OECD rankings would be right back up where they were in the 1950s when at one stage we led the world in the OECD economic rankings.
"We can put ourselves right back up there. It would be done again on the back of our comparative advantage – farming and the production of high quality foods."
But Moughan said it would be done this time by combining our ability to produce great foods with our ability for doing unprecedented science in agriculture, food and those related disciplines. "You bring those two together, you get that mixture; I think there is a tremendous opportunity here for our country," he said.
Another Fonterra example is a cheese product called Inner Balance. "It is not sold as a cheese, it is sold as a probiotic... a source of beneficial bacteria to underpin good gut health. Once again it sells very well and it is a very high profit margin product."
He also cited some infant formulas high in omega 3 fish oil, certain vitamins, and in the fatty acid DHL for brain health; these could be marketed not just as an infant formula but as a product to give a child the best brain development.
"Once again it sells very well, very high margin, because it is backed by science, by evidence and it has a story around it; this is not just the story of the wonders of New Zealand and our great ability to produce food, but also the backing of science evidence -- hard core material the world will want to see more and more."
He also gave examples of products coming out of the Riddet Institute Centre for Research Excellence that he co-leads with Professor Harjinder Singh. The centre wants to ensure its research is taken to a practical endpoint. "So we also have a small team of product developers taking the bright ideas and transferring them right through to products. We are trying to show by example that this can be done."
One product allows iron to be taken up by humans in a bio-available organic form, and it allows iron to mixed into food formats in a way that doesn't muck up the food. "When you add iron to food it does all sorts of things that make food hard to process and store. This is clever technology that encapsulates the iron and stops it having all these reactions.
"Another is sold offshore, bringing a nice return for New Zealand; we can put fish oil into foods at a very high level. You can eat one muffin in the morning and get your daily dose of 1000mg -- about four-five of the tablets -- and you won't taste or smell or have any hint of fish.
"These sorts of products are going to be the future. Many of them are protein-based and are building on New Zealand's amazing ability to produce very high quality proteins at competitive prices.
"There's nothing surer that over the next 30 years there will be a great demand for proteins to get balanced diets into the many [people who] need to be fed.
"We can provide the proteins... and the functional foods based on protein that are science embedded and capture a high margin."
