The North American consumer’s hunger for protein is a trend Fonterra is well placed to capitalise on, the co-operative’s head of Atlantic, Richard Allen says.
Chicago-based Allen heads Fonterra’s operations in the Americas and Europe. Back in New Zealand for a month, he fronted a presentation at the co-operative’s head office in Auckland.
Having strength in that part of the globe allows Fonterra to capitalise on emerging food trends, he said. An interest in health and wellbeing has manifested in high demand for protein-rich food, he said.
Consumers are paying much more attention to what is in their food and its impact on their diet.
“We call this the ‘protein-ification’ of everything – and I do meant everything,” Allen said.
In any major United States supermarket, every food category has protein claims, he said.
Allen brought back with him a large selection of foods commonly seen on the supermarket shelves in the US, ranging from corn chips to whey powders, coffee and tea, confectionery, cold meal replacement drinks for adults and children, and breakfast food such as pop tarts.
Some of these products contain ingredients from Fonterra. While many food trends begin on the US’s west coast, this one is now seen across the country in chains such as Target or Costco, he said.
“When consumers are making purchasing decisions, there is a really natural correlation between ‘it’s high protein’ and ‘it’s good for me’.”
The market has evolved from one mostly used by weightlifters and athletes to one where there is a demand for everyday applications of protein other than drinking a shake after working out, he said.
One of most popular of these applications is healthy snacking. This is a major trend in the US and Europe.
A decade ago high protein snacks generally did not taste great, but the R&D work done around the products mean consumers no longer had to sacrifice an eating experience to get that nutrition, he said.
The indulgence category is another growing area, with high protein cookies and other confectionery becoming more popular.
“The wonderful thing with this trend is that in New Zealand we manufacture a significant amount of protein. The two main products we make are milk protein concentrate and a whey protein and they are usually in high concentrations of protein.
“Years of innovation into these products mean we can get that protein in without sacrificing the eating of the product and the flavour of the product. You no longer feel like you’re eating cardboard.”
The push for more protein is also seen in the emergence of meal replacers, particularly with the popularity of diet drugs such as Ozempic.
This drug acts as an appetite suppressant but could potentially cause harm if the user does not consume protein to retain muscle mass, he said.
Across the Atlantic, the new United Kingdom free trade agreement has also allowed Fonterra back into that market without significant tariffs.
Allen said there is significant opportunity in this market for a low carbon, grass-fed product.
“We’ll probably get to around 10,000 tonnes of business in the first year.”
Sustainability is also “front and centre” in the minds of many of Allen’s customers in the Atlantic region.
He said it is a huge opportunity for New Zealand dairy farmers to leverage the work they have done over the past 20 years.
“Our grass-fed model means we are about on average 30% more efficient from an emissions perspective.”
Many of the companies in the Atlantic region are starting to introduce Scope 3 targets and NZ’s efficiency puts it at a huge advantage, he said.
“We know that the traceability and the data we have been collecting for so long on our farms has put us ahead in the world in terms of traceability and transparency.”
