Tuesday, 02 April 2024 11:55

Fonterra cashing in on US 'proteinification'

Written by  Sudesh Kissun
Fonterra Atlantic president Richard Allen with a protein-packed US drink during a briefing with journalists in Auckland last month. Fonterra Atlantic president Richard Allen with a protein-packed US drink during a briefing with journalists in Auckland last month.

A 'proteinification' wave is sweeping through the US and Fonterra is cashing in with New Zealand made protein.

The co-operative is partnering with leading dairy ingredient customers in the US, such as Premier Nutrition Company (PNC). Its largest brand is Premier Protein, the number one brand in the US readyto- drink category and convenient nutrition category.

In 2023, Premier Protein grew 25% in net sales and 32% in distribution points.

Fonterra’s Atlantic region president Richard Allen says the US has become a wonderful protein market for the co-operative. With consumer trends favouring protein, food manufacturers are following suit.

“Consumers across the US and even Europe are becoming savvy: they want to know what’s in their food and what’s the effect on their diet,” he told journalists in Auckland recently.

“It’s what I call the ‘proteinfication’ of everything. If you walk into any grocery store in the US, it’s a little bit different to NZ where you go to the protein aisle to find protein. In the US, you’ll find protein products right throughout the store.”

Some of top uses of dairy protein ingredients in the US include readyto- drink beverages, protein powders, and protein snacks. Fonterra provides ingredients into all three categories. The high protein snack bar category is growing significantly, reaching US$2.8 billion retail value last year.

Allen says the market for protein powder continues to present strong growth opportunities for Fonterra. The market value for protein powder in the US is expected to reach US$9.7 billion by 2032.

“Fonterra’s protein portfolio is well-positioned to meet key customer needs underlying these trends because of its ability to deliver high protein, functionality to meet manufacturing requirements and the right sensorial experience, and sustainability profile aligned with customer environmental goals.

“We are really leveraging the hard work that our farmers have put in, to position them as the most sustainable source of dairy globally.

“Market demand for value-added ingredients has held up well and we are seeing this play out through strong demand for our low-carbon dairy.”

He says Fonterra’s investment in research and development was paying off for the company.

“We’ve led the world in terms of some of the R&D and innovation over a number of years. And we’re the preferred supplier of many of these large global multinational food businesses.”

Allen believes the market for protein has evolved from being mostly for weightlifters and athletes to one where there is a demand for everyday applications of protein other than drinking a shake after working out.

One of most popular of these applications is healthy snacking.

“A decade ago, high protein snacks generally did not taste great, but the R&D work done around the products mean consumers no longer had to sacrifice an eating experience to get that nutrition,” he adds.

The indulgence category is another growing area, with high protein cookies and other confectionery becoming more popular.

“The wonderful thing with this trend is that in New Zealand we manufacture a significant amount of protein.

“The two main products we make are milk protein concentrate and a whey protein and they are usually in high concentrations of protein.

“Years of innovation into these products mean we can get that protein in without sacrificing the eating of the product and the flavour of the product. You no longer feel like you’re eating cardboard.”

Fonterra Atlantic

Fonterra's Atlantic region, formed in August 2022, includes the Americas – North, Central and South – and Europe. Allen, a former head of Farm Source, took up his role last year.

For Richard Allen, the US is a fantastic demonstration of Fonterra’s strategy in action – New Zealand milk, sustainability, and innovation.

“The US business has delivered a strong performance in recent years, and the US economy has been remarkably resilient. Market demand for value-added ingredients has held up well and we are seeing this play out through strong demand for our low-carbon dairy,” he notes.

More like this

Winston Peters questions Fonterra divestment plan

Foreign Affairs Minister Winston Peters has joined the debate around the proposed sale of Fonterra’s consumer and related businesses, demanding answers from the co-operative around its milk supply deal with the buyer, Lactalis.

Editorial: A new era for two co-ops

OPINION: Farmer shareholders of two of New Zealand's largest co-operatives have an important decision to make this month and what they decide could change the landscape of the dairy and meat sectors in New Zealand.

Should co-op sell its consumer brands?

OPINION: As CEO of the Dairy Board in the 1980s I was fortunate to work with a team of experienced and capable executives who made most of the brand investments that created the international consumer business Fonterra inherited. Soprole in Chile was the largest, but there were more than 20 countries where consumer marketing companies were established and Anchor and other brands were successfully launched.

Featured

'One more push' to eliminate FE

Beef + Lamb New Zealand (B+LNZ) is calling on farmers from all regions to take part in the final season of the Sheep Poo Study aiming to build a clearer picture of how facial eczema (FE) affects farms across New Zealand.

Winston Peters questions Fonterra divestment plan

Foreign Affairs Minister Winston Peters has joined the debate around the proposed sale of Fonterra’s consumer and related businesses, demanding answers from the co-operative around its milk supply deal with the buyer, Lactalis.

National

Machinery & Products

New McHale terra drive axle option

Well-known for its Fusion baler wrapper combination, Irish manufacturer McHale has launched an interesting option at the recent Irish Ploughing…

Amazone unveils flagship spreader

With the price of fertiliser still significantly higher than 2024, there is an increased onus on ensuring its spread accurately at…

» Latest Print Issues Online

Milking It

Tough times

OPINION: Dairy industry players are also falling by the wayside as the economic downturn bites around the country.

MSA triumph

OPINION: Methane Science Accord, a farmer-led organisation advocating for zero tax on ruminant methane, will be quietly celebrating its first…

» Connect with Dairy News

» eNewsletter

Subscribe to our weekly newsletter