Fonterra announces first nutrition science investment

Fonterra has announced a corporate ventures arm to incubate, scale and invest in ventures in the area of nutrition science.

Miles Hurrell, Fonterra Chief Executive, said the Co-op is committed to remaining at the forefront of nutrition innovation and creating new value streams.

Nutrition science solutions was one of the areas identified with future growth potential in September 2021.

“Nutrition science is a segment of the global health and wellness category that goes beyond everyday lifestyle and wellness products. Given our expertise in dairy science, we committed to exploring the potential for Fonterra to play more boldly in this space,” Hurrell said.

The Co-op has developed a business case and agreed a way forward, which includes the establishment of a corporate ventures arm with access to Fonterra’s dairy science and innovation expertise, combined with the agility of a startup.

“The business will incubate and scale a portfolio of disruptive ventures by developing solutions that combine science, nutrition and technology to make a real impact on human health,” Hurrell said.

The business — provisionally named Nutrition Science Solutions (NSS) — will operate as a standalone business within Fonterra with its own board and CEO.

It will adapt the Co-op’s existing capabilities and assets, alongside new disruptive capabilities through partnerships and M&A to target opportunities for value creation.

According to Hurrell, NSS will partner with and invest in global startups who will benefit from access to Fonterra’s dairy science expertise, and in turn, Fonterra will benefit from access to emerging technologies, advancements in science and novel channels to market.

“This is a new way of working for Fonterra, but one in which we see a lot of potential,” Hurrell said.

Fonterra’s first investment through the ventures arm is US$10m (AU$14.8m) for a minority shareholding in Pendulum, a biotech company pioneering the next frontier of metabolic health through its microbiome-targeted products.

The San Francisco-based company specialises in targeting metabolic health through evidence-based microbiome solutions. The partnership will see both the company and Fonterra establishing a presence in global markets, co-developing and commercialising next-generation microbiome products that are scientifically formulated to make improvements to people’s health.

“This strategic partnership will enable Fonterra and Pendulum to leverage each other’s strengths — Fonterra’s innovation, manufacturing expertise and established leadership in global markets, together with Pendulum’s deep innovation, microbiome expertise and growing leadership in the US market,” Hurrell said.

Colleen Cutcliffe, Pendulum CEO, said the company is founded and led by scientists in microbiology, biochemistry, computational and clinical trials, who are creating clinically backed, peer-reviewed products that merge the power and efficacy of a pharmaceutical with the safety and accessibility of a probiotic.

Pendulum’s scientists are conducting microbiome research and developing products that will have a meaningful and measurable impact on metabolic health.

“This strategic partnership with Fonterra enables us to tap into their deep-rooted manufacturing expertise and established global leadership to bring a new wave of microbiome products to market,” Cutcliffe said.

Image credit: Fonterra