Func.Nutrition's Milk With Attitude Eyes The World
Func.Nutrition's "Milk With Attitude" Eyes The World
Monday 16th December 2002
FUNC.NUTRITION'S "MILK WITH ATTITUDE" EYES THE WORLD
A fledgling value-added milk innovator seeking a piece of an $80 billion international market has secured its first outside investment.
Func.nutrition has attracted $600,000 from private dairy sector investors as it prepares to expand its range of value-added milk products. Industry New Zealand is also funding the company by providing up to $100,000 under its Business Growth Scheme, with the money to be drawn down over the next two years.
This initial capital raising is an important step in func.nutrition's plans to expand into value-added enhanced-nutrition beverages and functional foods, meeting a growing demand from consumers for foods that not only taste good but also boost their health and well-being. The worldwide market for functional foods is estimated at $80 billion and growing fast.
Func.nutrition managing director Neil Macintyre says the money raised will enable the company to complete applied product development and market test new, extended shelf-life milk-based products in Australia and New Zealand. Once solid sales and profit success are achieved in these key markets, the company will raise more capital to expand into select Asian, and possibly United States markets.
The company's new generation products will be milk-based and marketed as flavoured nutritional drinks to active consumers seeking natural dietary supplements needed for sustained sports performance.
A former economist who studied agricultural economics and marketing at Lincoln College, Mr Macintyre says he always hankered to develop a premium food product. Milk, with its life-boosting qualities and ability to be absorbed quickly into the bloodstream, was an obvious choice as a base for development.
"It's great to be active in an industry that has a very strong ingredient and process foundations that can support value-added product development.
"New Zealand has outstanding natural advantages of climate and soils, excellent dairy farming expertise and process capabilities. Our job is to combine those resources with growing consumer needs and wants for better food products."
Func.nutrition has been based at The Icehouse, the country's leading incubator for high-tech companies, for the past year.
Icehouse chief executive Andrew Hamilton says func.nutrition's success justifies the incubator's initial confidence in the company as an entrepreneurial, high-growth prospect.
Five years ago, Mr Macintyre founded func.nutrition's predecessor, SunElite Foods - best known as the company behind the popular Sun Latte milk brand, winner of a National Heart Foundation Nutritional Award.
Sun Latte's claims to be "the very best milk" rest on its health properties and product integrity.
Starting with two litres of fresh non-fat milk, almost a litre of water and lactose is removed. The result, Sun Latte, is fresh milk that is low in cholesterol, has natural milk calcium and protein levels 70 per cent greater than standard milk, and less fat and lactose than trim milk.
Sun Latte is processed and distributed by New Zealand Dairy Foods, and func.nutrition maintains brand ownership and provides marketing and key account management.
As func.nutrition prepares to enter new territory, Mr Macintyre believes the key to achieving value-added success is proper marketing and appreciating that each consumer market is different.
"The opportunities are enormous - so long as you understand the eccentricities of the consumer markets you go into.
"We talk generically about consumer markets, but they're multi-varied, diverse and dynamic. You can eyeball a market and think you have it sorted out, but six months later it's changed completely."
Mr Macintyre says func.nutrition has the advantage of being small and nimble in the fast-moving consumer products market.
"We're a lean and keen company - we're able to move quickly to establish important 'first mover' status in markets, while many larger companies need more time to gear up for market penetration.
"We work to understand consumer trends and then design products and marketing programmes that will deliver to those consumers. We are entirely market-led."