Fonterra launches nutrition science unit to strengthen manufacturing expertise, innovation

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Image credit: Fonterra

Fonterra has established a new corporate ventures arm to incubate, scale, and invest in global nutrition science startups in a push to maximise the value of its farmers’ milk.

In a media release, the New Zealand dairy giant said it is setting up a Nutrition Science Solutions (NSS) unit that will operate as a standalone business with its own board and chief executive, who is yet to be appointed.

According to Fonterra CEO Miles Hurrell, the Co-op is committed to remaining at the forefront of nutrition innovation and creating new value streams. 

“When we released our long-term strategy in September 2021, we identified nutrition science solutions as an area with future growth potential,” Hurrell said. 

Through partnerships and M&A, the new brand will adapt the co-op’s current assets and competencies in addition to new disruptive skills in order to find chances for value development. 

“NSS will seek out, partner with and invest in global start-ups who will benefit from access to Fonterra’s dairy science expertise and understanding of the global market, while Fonterra will benefit from access to emerging technologies, advancements in science, and novel channels to market,” Hurrell explained.

In connection with today’s announcement, Fonterra revealed its first investment made through the new ventures arm – USD 10 million (AUD 15 million) for a minority stake in Pendulum, a biotech firm pioneering metabolic health with its microbiome-focused solutions.

By working together, Pendulum and Fonterra will establish a foothold on international markets, co-create, and commercialise next-generation microbiome products that are specifically designed to benefit people’s health.

“This strategic partnership will enable Fonterra and Pendulum to leverage each other’s strengths – Fonterra’s innovation, manufacturing expertise and established leadership in global markets, together with Pendulum’s deep innovation, microbiome expertise and growing leadership in the US market,” noted Hurrell. 

According to Colleen Cutcliffe, CEO and Co-Founder of Pendulum, the company was founded and is led by world-class scientists in microbiology, biochemistry, computational and clinical trials who are developing clinically-backed, peer-reviewed products that combine the power and efficacy of pharmaceutical with the safety and accessibility of a probiotic.

“This strategic partnership with Fonterra enables us to tap into their deep-rooted manufacturing expertise and established global leadership to bring a new wave of microbiome products to market,” said Dr Cutcliffe.