Fonterra Supplies 30% of the World’s Dairy. Now It’s Adding Precision Fermentation Whey.

New Zealand dairy giant Fonterra and bioscience company, Royal DSM, have launched a precision fermentation startup to create sustainable dairy proteins.

The “complementary” nutrition company comes three years after Fonterra and DSM first partnered in exploring ways to disrupt the dairy industry with more sustainable and ethical alternatives. Fonterra produces approximately 30 percent of the world’s dairy exports. It’s New Zealand’s largest company, with revenue exceeding NZ $20 billion. Its brands include Anchor Dairy, Anchor Food Professionals, and the B2B ingredients solutions, NZMP. 

Precision fermentation

“The new start-up is an exciting opportunity to combine DSM’s world-leading expertise in precision fermentation science and technology with Fonterra’s world-leading dairy science and technology,” Fonterra’s Chief Innovation and Brand Officer, Komal Mistry-Mehta, said in a statement.

The start-up is not yet named, but is expected to be soon, the companies say. Fonterra and DSM say they have filed patents on their developments. Fonterra says the partnership aligns with its strategy to be a leader in dairy innovation and science.

With DSM’s proprietary technology that reduces methane—a greenhouse gas that traps more heat than CO₂—the partnership will also see Fonterra reduce its on-farm emissions across its New Zealand pastures.

But if other precision fermentation offerings are an indication of the potential, like California’s prolific Perfect Day, New Zealand’s pasture industry could soon become obsolete. 

“With fermentation-produced proteins having a wide array of potential applications for customers and consumers, this partnership aligns well with the Co-op’s strategy to be a leader in dairy innovation and science,” says Mistry-Mehta.

‘Unlock the growth potential’

“By exploring the opportunities of nutrition science solutions, we can unlock the growth potential of our advanced specialty ingredients and play more boldly in this category.”

According to Mistry-Mehta, dairy nutrition is Fonterra’s core strength, “now and into the future,” and predicts there will continue to be strong demand for sustainable, pasture-based dairy. “At the same time, we are conscious that preferences of some consumers are evolving, and we believe proteins produced with emerging technologies can work alongside our dairy products,” Mistry-Mehta said.

“With continued population growth, there will be a role for both dairy and other sources of nutrition in feeding the world’s population – they offer choice and they are complementary.”