With the launch of Ventures Co-Lab, New Zealand’s dairy cooperative Fonterra is looking for innovative ideas from outside the organization, inviting individuals, small businesses and large corporates to submit their ideas.
The Fonterra Ventures team leading the initiative, led by general manager Komal Mistry, will review the submissions and potentially form partnerships to develop those that are of interest.
“Ventures team will assess each concept on its own merits looking at various factors such as the likelihood of it getting to MVP [minimum viable product] status, the extent to which it aligns with our strategy and values, as well as the costs and resources involved to bring it to life,” Mistry told Agri Investor, adding that Fonterra has not allocated a specific amount of capital to the initiative.
“If we conclude that a concept will have a big impact on our customers or consumers and can be a win-win for Fonterra and the partner we join forces with, then clearly we have to find a way to make it happen,” she said in the emailed statement. “We believe this is the best approach to take for now rather than allocating a specific amount of funds to invest within a set period.”
Submissions could relate to any kind of disruptive innovation such as new business models, services, technologies or processes.
“We are looking to work with individuals and start-ups right through to corporates,” Mistry said. “A key goal is building long-term partnerships with organizations that will work in synergy with us and want to be at the forefront of innovation and disruption.”
The co-op is also looking for innovative ideas from within the organization. To that end, it has established “Disrupt,” a program that allows employees to submit their own ideas.
Fonterra is the largest exporter of dairy in the world, accounting for up to 25 percent of New Zealand’s exports. The cooperative is owned by 10,500 farmers and their families and is the preferred supplier of dairy ingredients to many of the world’s leading food companies. According to the company’s website, dairy contributes over NZ$8 billion ($5.6 billion; €5.2 billion) into rural and provincial economies.
Earlier this month, Fonterra confirmed the farmgate milk price forecast of NZ$6.00 per kilogram of milk solids (kg/MS) announced last November, a significant increase compared to the NZ$3.90kg/MS New Zealand farmers were receiving last season.
According to Fonterra chairman John Wilson, the forecast is at the right level. “The global outlook for dairy remains positive,” he said in a statement. “Since November, the global market for commodity dairy products has remained relatively balanced and we expect global prices to continue to hold or gradually increase over the back half of this season – a view shared by most global analysts.”
Fonterra’s Global Dairy Update for February reported that the cooperative’s New Zealand milk collections were showing signs of recovery. Originally expected to be down seven percent for the season, the New Zealand collections forecast has now improved to a five percent decline on last season.