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Fonterra scientist in lab.

Fonterra’s Strategic Innovation Group oversees all innovation activities, balances the portfolio of projects and ensures they have the right capability and resources to support these developments. Fonterra recognises that the development of innovative technology in products and processes is crucial to ensure the sustainability of the New Zealand dairy industry.

Fonterra has the largest dedicated dairy research facility in the world and includes one of the world’s largest registered dairy pilot plants. It employs some 400 staff including scientists, technologists, and engineers.

Developments at the centre, such as spreadable butter, functional milk protein concentrates, ClearProteinTM and Textured White BaseTM, have opened up many new opportunities for products made with dairy ingredients. Dairy science is also enabling specialist ingredients to help prevent allergies, eczema, neural defects, and osteoporosis.

Fonterra has over 600 patents and patent applications to protect the intellectual property arising from research.

Development centres in Hamburg, Chicago, Melbourne, and Singapore, who primarily work with Fonterra customers in product development, complement the research centre in New Zealand.

Fonterra is also a proponent of ‘Open Innovation’ and belongs to a network called InnovationXchange, which helps companies safely disclose intellectual property to develop closer ties with potential innovation partners. An example of this approach is ViaLactia Biosciences, a biotechnology company operating as a fully owned subsidiary of Fonterra. ViaLactia's goals are to identify, discover, and commercialise methods of selection and genes important to the dairy industry, including those affecting pasture grasses, milk production, and milk composition.

Fonterra believes that milk is the optimal nutritional solution to meet health concerns and constantly works to deliver product solutions that target specific concerns and promote health benefits.

One such project involved over US$40 million dollars of leading bone research, a team of 19 nutritionists and some innovative thinking on the part of the product development team to develop Anlene, a family of products specially formulated for adults to help maintain optimal bone health and strength. Bone decay is a major international health issue and worldwide osteoporosis figures are increasing. The research and development team responded to this trend by combining bone-strengthening nutrients such as calcium, protein, zinc, and magnesium with nutritionally rich milk proteins. Initial research in Asia showed women consuming these products benefited from a lower rate of bone loss.

To encourage more Asian customers to eat cheese as part of their daily diet, the product development team came up with the Chesdale range of chocolate cheese slices. This innovative product was in response to research that showed that cheese was increasingly seen as a healthy and nutritional food item in Asia, a traditionally slow growth market for cheese. Fonterra wanted to build on this awareness by introducing a range of new cheese products that would appeal to Asian palates. Within the first six months of the product’s launch in Taiwan, Chesdale chocolate cheese slices grabbed a 10 percent share of the overall cheese market. The product has since been launched in Singapore, Malaysia, Indonesia and Thailand with similar success.

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