Southland-based oat milk producer New Zealand Functional Foods is getting new Government backing, with a $6 million investment from the Regional Strategic Partnership Fund, Economic and Regional Development Minister Stuart Nash announced today.

“We set up the Regional Strategic Partnership Fund (RSPF) to help build more productive, resilient, and sustainable regional economies. The investment in New Zealand Functional Foods, to develop a plant-based beverage manufacturing facility, brilliantly aligns with this vision,” Stuart Nash said.

“Plant-based milk alternatives are a fast-growing segment of domestic and international consumer markets, with the amount spent by Kiwis on plant-based milks almost tripling from $52 million in 2017 to $144 million in 2019 – so the demand is definitely there.

“We know that oats grow well in Southland, and being low in water use, land use and emissions, they are an excellent raw ingredient for an environmentally sustainable alternative-milk option. Producing oat milk locally is a lucrative way to diversify our strength as a quality food producer.

"As it stands, we just don’t have the appropriate processing facilities to domestically produce the volumes of oat milk required to make a splash in this burgeoning market. Our investment will help provide the capital needed by New Zealand Functional Foods to build a specialised, large-scale processing plant at Makarewa, with capacity for producing up to 80 million litres of plant-based milk a year.

“The investment is part of our wider Government strategy to develop a low-emissions, highly-skilled economy that responds to global demands. I am confident that this new facility will add to the reputation of Southland and New Zealand as a real player in the sustainable food and beverage sector,” Stuart Nash said.

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