As part of the agreement, Fonterra Australia will work with Tasmanian dairy farmers to establish an organic milk pool, with the organic milk going into Bellamy’s Organic nutritional powders to help meet demand both in the Australian and export markets.
Growing urbanisation and rising incomes continue to fuel the growth of nutritional milk powders across emerging markets, with the category valued at more than US$50 billion globally and growing at double digit rates year-on-year. While growth in organic dairy is set to rise by 33 per cent between 2017 and 20221, as consumers look for ways to live a healthier and more sustainable life.
Announcing the deal, Mr René Dedoncker, Managing Director of Fonterra Australia, said the agreement is a win-win for both companies and for Tasmanian farmers, and deepens the partnership that has been in place since 2015.
“Bellamy’s Organic is a rapidly growing organic nutritionals brand and is an important customer of ours, and today’s announcement is another example of how we’re playing to our strengths in cheese, whey and nutritionals,” said Mr Dedoncker.
The partnership will see organic milk processed at Fonterra’s Spreyton plant in Tasmania, before being sent to Darnum in Gippsland, Victoria, for further processing into nutritionals.
“Tasmania offers the right conditions to develop a world-class organic dairy ecosystem. With its high rainfall and developing irrigation scheme, coupled with our agile site at Spreyton, we believe that Tasmania is an excellent location to grow a high-quality organic milk pool.
“The development of an organic milk pool is also a positive for Tasmanian farmers, who will have the opportunity to tap into the premium and stability that organic milk attracts.
“Organic dairy products such as nutritional powders command a premium, creating a high-value return, and we want to work with Tasmanian farmers interested in organic dairying to grow that organic milk pool over time,” Mr Dedoncker continued.
Bellamy’s Organic CEO, Mr Andrew Cohen, said that this is an exciting step forward for Bellamy’s and the Australian organic dairy industry.
“We hope to improve outcomes for Australian farmers and support the Tasmanian dairy industry, and believe that Bellamy’s in partnership with Fonterra are uniquely positioned to drive this change in Tasmania where our business was founded.
“We believe the rising demand for our brand and high quality, premium organic infant formula in Australia, China and emerging Asia can become an important and value-added platform for Tasmanian farmers, and look forward to talking more with the local community about this future,” said Mr Cohen.
“We will now get out there to begin discussions with Tasmanian farmers, and work with the broader industry to establish a support network to develop an organic milk pool in Tasmania,” concluded Mr Dedoncker.