July 11, 2016
Fonterra: Innovation key to shaping global dairy sector
R&D is one of the most important factors shaping the dairy industry today, particularly when it comes to selling Fonterra's capabilities to new and existing customers around the world, the co-operative's chief operating officer of global operations, Robert Spurway, said.
"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," Spurway added. "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 hundreds of times higher than whole milk 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, according to 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," Spurway explained. "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."
Fonterra describes itself as an established leader in R&D for dairy, topping the list of raw milk processors investing in innovation at more than $80 million each year. It also works closely alongside the government's Primary Growth Partnership in the delivery of each of these innovations.
In addition, the focus on R&D ensures a consistency of product specification beyond what has been achieved in the past, and sets the motion for continuous improvement.
"Our customers pay for consistency – if they order MPC70, they want to know that their milk protein concentrate has exactly 70% 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," Spurway said.
