Fonterra's board is getting some kudos for listening to shareholder concerns as it works on a new capital structure.
The aim is to replace pies, crisps and sugar-filled soft drinks. Production is by new technology at a new plant in a deal with an apple juice processor.
In a large industrial area near Hastings, Apollo Foods has set up a new processing plant, the brainchild of apple industry entrepreneur Ross Beaton who intends to make a quality, long life apple juice.
But the plant can do more than process apples: the technology is perfect for producing quality long life milk beverages, which Apollo has agreed to do for Fonterra.
Darren Moffat, Fonterra general manager of ready-to-drink lifestyle beverages, says its new product Anchor Protein + stems from the co-op’s research of market trends.
“There is a huge trend towards convenience snacking with consumers looking for healthy alternatives. Many people now don’t have time to sit down for breakfast or lunch, but they want quality snack food. The Anchor protein drink meets this need: it has 20g of protein and it’s healthy -- no added sugar.
“In metro areas many people are money-rich but time-poor. This gives us an opportunity to innovate and cater to those trends and add convenience and healthy food into people’s lives,” Moffat says.
Anchor Protein + was launched about a week ago but may take a few weeks to get to all outlets in New Zealand. It will initially be sold only in NZ but raising capacity will enable the co-op to take it global.
“We see the home patch as the showroom for going global,” he says.
Anchor Protein + is like the Primo and Mammoth lifestyle milk drinks that are now long-life. Until processing began at the Hastings plant earlier this year, Primo and Mammoth fresh milk products were made at the Fonterra plant at Takanini in south Auckland. All these brands are now made at Hastings.
“The move to long life enables us to cater for future trends. Although there is UHT capability at Takanini, the facility at Hastings has the most up-to-date technology and will enable us to expand our production of these new high value products. This makes sense,” he says.
Market research plays a big role in how Fonterra develops new value-add products. Convenience and snacking are two drivers the research has discovered.
“Indulgence, funnily enough, is a trend you see around NZ; when Kiwis treat themselves they go big. So the question is how do you tap into that as people become more conscious of the ingredients in a product and query what this might mean for their diet?”
Moffat sees massive opportunity in the market and the co-op will go after that in ways that differ from the traditional walk to the dairy to buy a drink.
Partnership adds value
The partnership between Apollo’s apple juice and Fonterra’s lifestyle drinks is working well, says Darren Moffat.
It isn’t a joint venture, but Fonterra has injected capital into the business which effectively buys them guaranteed processing time.
Milk is delivered daily to the plant from Fonterra’s milk collection facility at Palmerston North and is immediately stored and chilled. About 8000L is set aside as a slurry into which go all the ingredients for the type of milk to be produced, e.g. flavours and vitamins.
The remainder of the milk is then added and it all goes to a sterile tank in preparation for bottling in a sterile environment.
The bottles enter the process in small form and are then blown up to the correct size for filling, labelling and packaging. The plant can fill 12,000 Anchor Protein + bottles per hour, constantly checking the bottle, their fill heights, caps and the milk itself.
The plant has its own laboratory for product testing.
Moffat says the products are a good example to farmers of their milk going into quality value-add products.
“This is true innovation with Fonterra developing new business opportunities for growth locally and globally,” he says.