Fonterra’s $3.2b capital return to farmers set to boost rural incomes and NZ economy
According to ASB, Fonterra's plan to sell it's Anchor and Mainlands brands could inject $4.5 billion in additional spending into the economy.
Not to mention real-time composition analysis with the potential to revolutionise a multi-billion dollar industry.
These may sound like scenarios borne out of a NASA testing facility, but in fact these space-age innovations have origins right here in New Zealand – part of Fonterra's asset optimisation programme that has helped position the cooperative as a global leader in dairy R&D.
Fonterra chief operating officer of global operations, Robert Spurway says R&D is one of the most important factors shaping the dairy industry today, particularly when it comes to selling our capabilities with new and existing customers around the world.
"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. 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," says Spurway.
"Our customers don't just buy products, they buy into our ability to think outside the box and find new ways to save them time, effort and cost. That might be by optimising the performance of products they already buy from us, or by looking at their business challenges and creating new product lines to help solve them."
Products like lactoferrin – the tiny protein dubbed 'pink gold' that the Co-operative extracts from milk and which 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 are both the result of Fonterra's investment in R&D.
The real ingenuity behind these innovations, says Spurway, lies in the creative thinking that backs thousands of tonnes of stainless steel manufacturing equipment the Co-operative operates – a network of assets that is closely guarded for its intellectual property, and for good reason.
"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.
"It is an exacting science and this is where Fonterra leads the world. 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."
The cooperative has long been a leader in dairy R&D, topping the list of raw milk processors investing in innovation at more than $80 million each year. It is also works closely alongside the Government's Primary Growth Partnership in the delivery of each of these innovations.
This focus on R&D is also ensuring a consistency of product specification far beyond what has been achievable in the past, and only continues to improve.
"Our customers pay for consistency – if they order MPC70 they want to know that their milk protein concentrate has exactly 70 per cent protein. Not 66, not 73. Our investment in state-of-the-art manufacturing equipment and decades of expertise operating it means our customers always know they're getting what they paid for."
What's next on the innovation front for Fonterra – Spurway says the team at the Fonterra Research and Development Centre have 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."
