KEY INTERVIEW: Fonterra Address Growing Desire for Dairy Proteins

29 Nov 2016 --- Fonterra is the world’s leading dairy exporter, a global nutrition company owned by 10,500 farmers and their families, united by the fundamental belief in the power of dairy to make a difference to the world. With its roots firmly planted in New Zealand’s rich land, Fonterra dairy is now in high demand across continents since opening its Amsterdam office almost six years ago.

FoodIngredientsFirst caught up with Riette Blackwell, Marketing Director for Europe, the Middle East and Africa, who discussed the increase in demand for dairy proteins. “When I joined Fonterra five and a half years ago, we already had a number of these protein ingredients that we currently have in our portfolio.  When I look back on those years, we really had to push the ingredients into the market, our customers were interested to a certain extent, but today this is totally different,” she says. 

“Now there is a huge pull from the market. That has been a big, positive change over the past five years.”

In order to ramp up production for the high demand of dairy coming in, Fonterra established a number of strategic sourcing partnerships in Europe.  Last year we opened a new, ‘state of the art factory’ in the Netherlands where we manufacture premium dairy ingredients, including paediatric grade. This enables us to better serve our European customer base. “Today we have two sources of products, part of our ingredients come from New Zealand and the others come from Europe,” she explains. 

“New Zealand has some unique benefits in terms of dairy production,” Blackwell confirms. “One of the big advantages of  ingredients from New Zealand in contrast to Europe and other parts of the world, is that the cows in New Zealand are outside all year round, they are grass fed and there are a lot of benefits because consumers want to know where their food comes from exactly.”

“Whilst consumers are asking for more and more natural ingredients, this is becoming really relevant for us and that is one of our differentiators, the fact that we can actually state our dairy comes from cows that are only grass fed, they won’t have any other types of food other than what is deemed natural, so that’s definitely a positive thing for us and our consumers at Fonterra.”

“Our ingredients from Europe, in terms of quality and control are the same, but the milk comes from cows who have different diets,” she continues, “For example, milk and products from grass fed cows are typically yellower and contain higher levels of antioxidants such as beta-carotene, but of course for some customers the more mild flavor and shorter lead time of a local supply are preferred. There are certainly benefits from both,” she confirms. 

Due to this huge demand in dairy, FoodIngredientsFirst asked Blackwell what consumer trends are happening as a result of this? “I think one of the biggest trends driving dairy consumption is the increase in health consciousness overall,” she states. “Dairy protein is seen as an ingredient that support a healthy lifestyle, which is what consumers are looking for.” As a result, there is a clear pull from customers for protein products, but she believes it starts with the fact that “consumers are now much more aware of the health benefits that protein is delivering”. 

The US kick started the protein trend, but now high protein claims feature heavily on the packaging of products all over the world. “This is expanding to different formats,” says Blackwell. “Now we are seeing things like protein cookies and brownies. What has changed in protein is that it has moved from being a niche ingredient, to pulling mainstream consumers in.”

Blackwell also noted that sports nutrition is a category which continues to grow, she says: “In the past, this category was more niche and proteins were mainly consumed by bodybuilders and endurance sports men, who were looking for the functional benefits, but now you have these mainstream consumers who are also looking for emotional benefits as well, and it has to taste good, so it’s not just about nutrition but about taste too and I think that is one of the key drivers in this space.”

“As there are more players in the market, those players are looking for ways to differentiate themselves, through a unique brand positioning, channel focus (for example online as a growing channel) and/or by  having increasingly sophisticated claims for targeting a group in particular.” 

Many of the sports products on the market today can be consumed by sports people but also they can be consumed and they are still appealing to everyday consumers, Blackwell says “There is a lot of blurring of categories, which opens up a lot of opportunities for Fonterra.”

According to Blackwell, the aging population is another big (demographic) trend that is changing the world and is requiring different products in different formats. The world is ageing rapidly and customizing formats for the elderly with specific condensed nutrition formats which are easy to digest is proof that companies can tailor make their products to suit the end consumer, “It’s much more sophisticated nowadays, in terms of its not one size fits all anymore,” she says. 

So what are millennials looking for and how do they differ from other target groups? “Millennial consumers are much more concerned about where their food comes from,” claims Blackwell “And they want to know this more than any other consumer group. They are very interested in natural, organic food, locally sourced foods, they have a much higher level of awareness, likely due to the fact that they are frequently online.” 

“Millennials also know what they want, and they can be very critical of an ingredient, if they see a new ingredient they are more inclined to research it,” she adds.  

Blackwell additionally noted the importance of segmentation as a trend. Companies have a wider knowledge of end consumers and what they are looking for, which means they can tailor make products for consumer groups based on those needs. 

“There are, for example, an increased amount of sports nutrition products which exclusively target women, and not just in the US, with claims specifically tailored to women,” explains Blackwell, “Women don’t want to build muscle they want to tone muscle, so companies are tapping into this need and also executing it with much more feminine colors, like pink and purple, so that’s also something to watch out for.”

This years’ theme at Fonterra’s exhibition at HIE will be nutritious and delicious; everyday foods made healthier with dairy. They will be launching some innovative applications such as a the SureProtein Flex WPC550, a heat stable functional whey protein suitable for high protein RTD beverages, which enables up to 12% protein while delivering amazing taste and texture, a new SureStartGOS probiotic fiber which supports digestive comfort in a range of consumer applications,  SureProtein Clear WPI beverages and many more exciting new protein formats and applications which can be found and tasted at the Fonterra HIE stand E10 – stay tuned to keep up to date. 

by Elizabeth Kenward