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Fonterra takes minority stake in biotech firm Motif Ingredients

Wednesday 27th February 2019

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Fonterra Cooperative Group is among several investors backing a US$90 million capital raising for biotech firm Motif Ingredients, which is seeking to develop bio-engineered animal and food ingredients. 

New Zealand's biggest dairy processor joins Gingko Bioworks, Breakthrough Energy Ventures, Louis Dreyfus Co and Viking Global Investors in the funding round. It  won't disclose how much it invested or how big a stake it's taken beyond saying it's a minority holding. 

Judith Swales, Fonterra's head of global food consumer and foodservice unit, said the investment is part of the dairy processor's goal to keep abreast of new technology and understand changing consumer demands. 

"Dairy nutrition will always be at our core, but we also want to explore how we can capture more value from new types of nutrition," she said in a statement. "The complementary nutrition category – where plant, insect, algae and fermentation-produced nutrition co-exist alongside animal proteins, including cows’ milk – is fast evolving. It’s not a case of either/or, but both."

Former chief science adviser Peter Gluckman raised the spectre of plant-based alternatives to animal proteins in late 2017, saying he saw it as an existential threat to New Zealand's economic fortunes.

His final report revisited themes raised in that initial warning that New Zealand needs to revisit its moratorium on genetic modification techniques if it's to make substantial progress in reducing agricultural emissions. 

Fonterra has previously acknowledged shifts in consumer preferences towards diets with smaller environmental footprints, but has held the view that dairy proteins will always attract demand in a global market. 

Swales today said the Motif investment will help Fonterra be a part of a new generation of fermentation-produced food needed to support traditional sources in feeding an expanding global population. 

"Consumers around the world will continue to want natural, grass-fed dairy as a premium source of nutrition. At the same time, we recognise that no two consumers are the same," she said. "As diets and preferences continue to evolve, we want to be there, providing people with choices."

Motif is the second start-up to launch from Gingko's platform for biological engineering. It was established to use genetic science and fermentation tech to re-create and sell animal proteins and food ingredients similar to dairy ingredients. 

(BusinessDesk)

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