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New Zealand dairy giant Fonterra looks to nab share of multi-billion-dollar nutrition market

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By Danielle Long | Asia Pacific Correspondent

October 3, 2022 | 5 min read

New Zealand dairy giant Fonterra is entering the booming wellness nutrition market as it seeks to attract new customers and grow its business in new directions.

Fonterra NZ

New Zealand dairy giant Fonterra diversifies into wellness market

The dairy cooperative, which is New Zealand's biggest company, is hoping to grab a share of the $500bn global health and wellness market with wellbeing brand Nutiani.

The move is part of the company's strategic plan to increase profits and diversify the business as milk consumption plateaus and consumer nutrition needs change.

The dairy giant is investing heavily in research and development – it will reach $160m per year by 2030 – as it aims to become a leader in nutrition science and innovation.

Nutiani aims to take advantage of the booming global health and nutrition markets by creating products and services that leverage Fonterra's research investments and IP.

The multi-billion-dollar nutrition markets are predicted to grow steadily over the next few years. Currently, the global physical, mental and inner wellbeing nutrition market is estimated to be worth US$66bn, while the global medical nutrition market is worth US$50bn – the two categories are predicted to grow by 6% and 5% each year, respectively.

"There's no doubt that people are paying more attention to wellbeing and managing it through diet," said Komal Mistry-Mehta, chief innovation and brand officer at Fonterra.

"Research shows 96% of consumers actively manage their wellbeing, with more than half of these consciously managing their diet to improve their wellbeing."

"To create a greater impact in the health and wellbeing space, we must not only capture the opportunities we see today but also look to the future, helping our customers stay ahead of the curve."

Mistry-Mehta said Nutiani would be positioned as a business-to-business brand and aim to meet consumers' evolving nutrition needs. The brand will develop active living products for sports, active, healthy ageing and medical nutrition.

"Our health and wellbeing customers are facing growing pressure to accelerate their innovation pipeline to respond to these dynamic consumer demands, yet they face common challenges during new product development and are looking for partners to fill their capability gaps.

"Nutiani answers this need by providing a suite of solutions which help customers tackle the pain points associated with each step of the innovation journey – from identifying the opportunity to validating the final product."

"We see a clear opportunity to win in critical segments of the global wellbeing nutrition space. Fonterra's deep expertise in nutrition science gives us an incredible advantage here.

"We will use Fonterra's existing expertise in nutrition science to develop targeted solutions, while opening up opportunities for strategic partnerships to deliver access to new markets and consumers," said Mistry-Mehta.

Fonterra has unveiled its first supplement range, BioKodeLab, which aims to improve cognitive performance; the range includes a probiotic product.

Earlier this year, Fonterra announced a partnership with Dutch health nutrition and bioscience company RoyalDSM to create a start-up to develop and commercialise fermentation-derived proteins.

The move follows a similar partnership with science nutrition company VitaKey to use the dairy company's culture library to create probiotics.

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