8 questions for Thijs Bosch
'Higher milk prices can only be achieved with the right balance'
Fonterra caused a milk protein to behave like a whey protein. It is good news for dairy farmers as this is currently the highest margin component. What does it mean for the milk price and what plans does Fonterra have for the Netherlands and the European Union (EU)? Thijs Bosch, sales director at Fonterra Europe, talks about it.
In the last week of November, Fonterra presented a new team, which will focus on the development of healthy food and products for healthy ageing. The base of the team will be Amsterdam. New ingredients were also launched at the Frankfurt fair.
What was launched at the Frankfurt fair?
"We showed at the fair that we have succeeded in making the milk protein from Milk Protein Concentrate (MPC) behave like a whey protein. The advantage of this is that we get a cheaper raw material, which comes directly from the milk. "In addition, it also has advantages for taste and functionality. When using these types of products, you should think of chocolate milk with extra proteins, as a recovery drink after exercise."
What role do high-quality proteins play for you?
"About 6 or 7 years ago, Fonterra looked at the sales opportunities in the EU. At that time, sales mainly consisted of cheese, butter and casein. However, it was less useful to sell these products in Europe, because of the distance versus the In addition, there is a lot of demand from Asia. At that time, we looked at which products could be sold in a profitable way and these turned out to be high-quality proteins. However, there is a high import duty. That is why it was decided to work through partnerships and the collaboration in Heerenveen is part of that, which includes making new applications for lifestyle, sports nutrition, infant nutrition, baby food and medical nutrition."
Is the shortage for whey also diminishing, now that you have managed to make a milk protein behave like a whey protein?
"There is much more demand than product. For example, we are building factories in New Zealand and Australia to produce mozzarella. We can sell the extra cheese (in the form of mozzarella) to Asia, for example for pizza. The whey we can then put away as high-quality protein. We have also concluded an agreement with the Lithuanian AB Rokiskio Suris and we are working together with First Milk and Dairy Crest. In total we have about 10.000 tons of WPC and WPI available in the EU. customers in the EU and is also exported to China and Japan."
The EU is an important source of pasture, but how are things like pasturing handled?
"In Europe, this mainly concerns ingredients that are obtained from meadow milk. In New Zealand, a class is even attached to the milk, in order to make it transparent and tangible. There the aim is also to produce 90% natural cows. grasses. It provides more vitamins and a more natural product is created. These products have a special logo and we will also sell those products in Europe. In the United States and Japan we already have a large number of customers who come to 'grass -fed' ingredients."
You also introduced a new team that will be working in Amsterdam. How important is the Netherlands for Fonterra?
"Very important. The head office for Europe is located in the Netherlands for a reason. In addition, the factory in Heerenveen is one of our largest. It was built recently, so that the factory has modern equipment at its disposal. At the same time, it gives us the opportunity to work together working with companies such as FrieslandCampina. It also helps that our CEO Theo Spierings is Dutch."
"The fact that we are not present on the Wageningen Campus, like Yili, is because we do the same in New Zealand. Despite this, we are involved in a number of studies in Wageningen, about malnutrition and nutrition for older people. We are still investigating whether this is a part to invest in."
How important is research and is there more to be gained from milk?
"It is not easy and you need to have a certain scale to be able to research new opportunities for milk. It is important to be able to prove through test groups that what is claimed is also true. It is a costly affair. For example, think of food, so that a baby suffers less from eczema. Marketing is a challenge for the elderly, because consumers are still not very interested in buying products that are specifically intended for the 'elderly'. There is still a lot of research to be done in this area and the demand for these products will continue to grow strongly worldwide."
Developing new products is expensive. Are you not afraid of competition from the vegetable sector?
"There is certainly competition from plant-based products. You can think of products for vegans, for example. I expect that there will be more people who are flexitarian in the future. These people consume less dairy, but do have a need for specific dairy ingredients. I expect that the growth of the market for high-quality protein products is so great that there is room for both vegetable and animal products. For a number of applications, such as in sports nutrition, animal protein is also superior."
The prognosis for whey and milk protein look good, but what does it mean for the milk price?
"Recently we saw that milk fat in particular calculated better. We always look at the different product flows from the perspective of the total portfolio, with the aim of processing more milk in products with higher margins. So fewer commodities and more products with added value. At the same time. the Global Dairy Trade (GDT) is intended to determine the milk price in a transparent way and there must be sufficient liquidity on the GDT. This concerns about 20% of the production."
"The focus on high-quality products is not only related to margins. The products are also less easy to copy. New Zealand produces 22 billion liters of milk, 95% of which is exported. A balance has to be found. a good strategy is essential. A good milk price is important to our shareholders, but the dividend on top of the milk price is also important. It is comparable to FrieslandCampina's supplementary payment. This is where the growth lies."
Herman van den Pol
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