As shoppers look for proteins that provide more functional benefits like satiety, boosting immunity or helping deal with stress, dairy giant Fonterra is confident one solution could come from an option better known for providing calcium or drowning a bowl of cereal.
Fonterra, the world's fifth largest dairy company, is devoting more money and resources to its NZMP ingredients business in an effort to uncover health attributes in milk. Currently, proteins from the liquid are widely used in sports nutrition, muscle recovery and weight management.
For Fonterra and other milk producers and processors, an expansion in the use of milk ingredients could increase the market reach for the liquid at a time when consumption is sliding but demand for eating better and relaxing are taking a decidedly different upward trajectory.
"It's no longer a glass of milk. It's far more than that," said Mark Simpson, general manager for sales at NZMP. "We're constantly looking at how we take that milk and do something new, different or beneficial with it to increase that value both from our business' perspective but more importantly to our customers and consumers."
NZMP noticed six years ago that shoppers were placing greater importance in eating right and taking care of themselves through food and beverages — a trend that was being mirrored through product innovation by CPGs who make the bars, shake mixes and protein drinks that incorporate the company's ingredients. The New Zealand-based firm started searching for more benefits in the same milk they produce 4.5 billion gallons of each year.
The culmination of that research came just six months ago when NZMP started selling milk phospholipids, or complex lipids derived from whey. The company said are clinically proven to help manage the effects of stress and maintain performance by staying focused.
"It's no longer a glass of milk. It's far more than that. We're constantly looking at how we take that milk and do something new, different or beneficial with it to increase that value both from our business' perspective but more importantly to our customers and consumers."
General manager for sales, NZMP
The launch during the COVID-19 pandemic, while unintentional, couldn't have come at a better time as the ingredient offers many of the functional qualities consumers are looking for in food, Simpson said.
"The trend is our friend at the moment," he said. "We certainly didn't plan our launches around the pandemic or the potential impact but our timing has been beneficial in terms of having solutions that customers and consumers are looking for. We've been very fortuitous in that regard."
Growth rates for beauty-from-within and mental wellness products and sales of bars, ready-to-drink beverages and other products that use NZMP's ingredients have gained momentum during COVID-19, according to the company.
Despite ongoing challenges facing milk — a gloomy picture underscored by the bankruptcies of Dean Foods and Borden Dairy — overall consumption in the dairy space is higher than it's ever been. Per capita dairy consumption increased from 539 pounds in 1975 to 653 pounds in 2019, due in large part to the growing popularity of yogurt, butter and cheese, according to data from the Department of Agriculture. Even certain segments within milk, including whole and flavored fat-reduced varieties, have risen in recent years.
NZMP uses milk the company purifies to sell as is or to make cheese and butter that are exported and sold in the U.S. Along with milk phospholipids, it now sells milk protein concentrate, a high-protein, low-lactose ingredient often found in sport nutrition shakes; whey protein concentrate that can aid in booting muscle recovery and satiety; and probiotics that offer gut and skin health and general immunity benefits.
NZMP's ingredients are now in more than 10,500 products globally that address different properties such as beauty from within, gut health and mental wellbeing — areas that are expected to be growth categories going forward.
But executives at the company said many food and beverage manufacturers are still unaware of milk's potential as a solution to some of the needs they are looking to incorporate into their products. This provides NZMP an opportunity to educate and reach out to customers to grab sales in this "huge" untapped market, Simpson said.
"For us, the kind of opportunity is endless, assuming we continue to bring these innovative solutions to the market," he added.