Miles Hurrell: Fonterra CEO on the company's expansion into high protein ingredients

It’s a new venture for Fonterra. 

The dairy giant has announced a $75 million expansion to its Studholme factory in South Canterbury. 

It will be a hub for high protein ingredients for sports nutrition and other medical products. 

CEO Miles Hurrell told Mike Hosking it's an opportunity for the company to expand its footprint in New Zealand, and in the competitive market. 

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Episode Transcript

Speaker 1 (00:00):
So Fonterra is expanding a high protein hub seventy five
million dollar expansion to its Studholm factory. This is South Canterbury.
Of course, high proteins all about sports nutrition, medical products,
that sort of thing. The market's expected to grow ten billion,
that's US in the next four years. Are the CEO,
of course, is Miles Hurrales with us Morning to.

Speaker 2 (00:16):
You, Good morning, Mike.

Speaker 1 (00:17):
Is this niche and always niche or it's niche going
mainstream very.

Speaker 2 (00:22):
Much the letter niche going mainstream. Yeah, people are starting
to use more of these products that used to be
just sort of the bodybuilders of the world, but it
is going mainstream and you and I might have a
drink or a protein bard before after your exercise.

Speaker 1 (00:34):
He says, Okay, how competitives the space globally?

Speaker 2 (00:37):
Oh it is. I mean Northern Hemisphere are the sort
of the key players and not not so much down here.
But Northern Hemisphere also got some intellectual property in this
place as well. But we think has is unique and
of course we've got a good strong customer partnerships both
in US and North America. Japan. Career are the key
markets that we're targeting.

Speaker 1 (00:54):
Does the new Zealand thing count for anything in this
area or not.

Speaker 2 (00:59):
Oh not so much in this area. That is certainly
the New Zealand providence sort of story resonates in a
lot of our product categories, mainly products that are consuming
our cheese and the like. But yeah, these products not
so much. It's an ingredient that goes into sort of
a high high value esports nutrition or medical nutrition, so
not not as much as others.

Speaker 1 (01:16):
And that's where you're at. So you provide the ingredient.
You're not in the business of making the Fontierra protein bar.

Speaker 2 (01:23):
Correct, it's it's the ingredient, but the intellectual property that
goes with in years of R and D have gone
into into these proteins, and so you're not. It's an
oportunity for us to expand our foot front here in
New Zealand.

Speaker 1 (01:33):
I know what you're going to say, but how much
of this is psychobabble and how much of it's actual
medical and.

Speaker 2 (01:38):
Real real I mean, you get into the you get
into into those power brands in North America, you don't.
You don't get the approval from from the authorities unless
you've done the clinical research behind it. So now hundred
percent of is real and as I say, we work
collectively with where their partners up there to make sure
that the products that we provided them fit their bill.

Speaker 1 (01:59):
And hume of the margin at the end of the
market's quite good.

Speaker 2 (02:03):
It is good and at lines were sort of the
decisions we made recently around divesting out of our consumer
business because we believe that the future is in this
B to B space, the high value proteins. And you know,
for us to throw seventy five million dollars at a
plant that was sort of aging almost at the end
of an economic life and given that of new Lisa
and I, it's great for us.

Speaker 1 (02:21):
Yeah, exactly. While I've got you. Haven't talked to you
since the last auction? Are you saving the country single handedly?

Speaker 2 (02:27):
Here?

Speaker 1 (02:27):
Things look all right now.

Speaker 2 (02:29):
I think things look okay, although you know there are
some in your colleague Jamie mckaye is still sing we've
been a bit conservative. So the market has two and
for us, which is great, but it is still early days.
The world's not in the great shape of the ears
we all know, so we just keeping keeping a power
dray for a little bit.

Speaker 1 (02:42):
Do you want me to have a word with Jamie?

Speaker 2 (02:46):
He does he is his way. You know how he works.

Speaker 1 (02:48):
Yeah, yes, good Miles. Nice to ketch up breach out
pretty much, Miles Harrel. I know Jamie. Anyone knows Jamie.
I know Jamie. For more from the Mic Asking Breakfast,
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