Advancing our Active Living Business

4 MINUTE READ

The way people manage their health and wellness is being revolutionised, and we’re seeing this trend growing more prominently due to COVID-19.

Consumers are rethinking what it means to age well, are being proactive with their health and taking a holistic perspective on their wellbeing. This has given rise to a range of consumer solutions targeting specific health and wellness needs, which Fonterra is well placed to take advantage of.

Last year when the Co-operative released its long-term strategy, it set an aspiration to grow operating profit by 40-50% from FY21 base by 2030. This will be done by focusing on our New Zealand milk, sustainability, nutrition and innovation credentials.

One of the ways we will create more value is to shift more of our Ingredients portfolio towards higher-value ingredients and solutions through our Active Living business. This business addresses three dimensions of wellbeing (Physical, Mental, Inner) and the health needs of a medical patient right through to those taking a proactive approach to their health and wellbeing.

The global health and wellness market is valued at US$66B, growing at 6.1% per year and Medical Nutrition is valued at US$50B globally and growing at 5% per year.

Fonterra is already well positioned to take a slice of these markets. We have expertise in protein to help people maintain muscle mass for better quality of life, dairy lipids that improve people’s mood and probiotics to support immunity and digestion.

To date we’re able to claim our products have health benefits relating to muscle health & sarcopenia (age related loss of muscle mass), mobility, malnutrition, and digestive health. In addition to this we’re beginning to see benefits emerging in the areas of oncology care, perioperative care, mental wellbeing and beauty from within. We’re also seeing complementary benefits of immunity, metabolic health, and weight management coming through.

In terms of the geographies we’re pursuing, the USA is key to our strategy due to its interest in health and wellness and its wealth of innovative companies at the forefront of this trend. We are also focusing on Japan, China and South Korea with the team scoping Indonesia, Thailand and Vietnam for future potential.

We already have a number of partnerships underway with customers who value our expertise, including:

  • An R&D partnership focusing on mental wellbeing with US based personalised nutrition company Sun Genomics.
  • The fastest growing probiotic brand in China, Wonderlab, who is focused on providing nutrition solutions to younger generations.
  • Korean brand Daesang a customer that values our specialist ingredients and our sustainability credentials. They’ve recently launched a new product using our bioactive whey – which has lactoferrin content 11 times higher than standard whey protein, to support immunity and provide protein benefits.
  • Leading health solutions company, Life Extension who offer a range of vitamins, nutritional supplement and blood-testing services. They launched a new probiotic supplement in the US market in 2021, using our BifidoB HN019 probiotic strain

Our Active Living business has grown steadily over the last few years. This growth has been driven by innovation, increase in market share and share of wallet, portfolio expansion and geographic expansion.

Going forward we will continue to invest in R&D, customer experience and our service model, as well as look for opportunities to enhance our capability and strategy through partnerships.

In particular, we will be focusing on three areas to achieve our 2030 ambitions:

Medical & Lifestyle protein-based beverages – lifestyle beverages has a market size of US$9.2B, growing at 6.4% per year. We have well established internal capability in this space, differentiated solutions through our advanced proteins, and an existing global customer network.

Probiotics in Asia– the Asian probiotics market is valued at US$1.54B and growing at 11.6% per year. Two of our probiotics ‘super-strains’ are currently highly regarded in market because of the depth of human clinical research backing their effectiveness.

Mental wellbeing solutions – mental wellbeing is the top and fastest growing consumer concern globally. We know our lipids, probiotics and proteins have a role to play in improving mental wellness.

It is an exciting time for the food industry as investment in health, data and technology are rising and we are excited to be part of this journey to provide better nutritional solutions to customers and consumers around the world.

By Komal Mistry-Mehta, Director Active Living