Gut feeling: Fonterra’s new venture arm eyeing China and US investments for microbiome personalised nutrition solutions

10-Jul-2023 - Last updated on 10-Jul-2023 at 01:39 GMT

Fonterra's new venture arm is targetting personalised nutrition solutions in gut health for a start © Getty Images

Fonterra says the microbiome is increasingly taking the centre stage when it comes to human health, with its new nutrition science venture arm identifying China and US as key investment targets for personalised solutions.

Known as Nutrition Science Solutions (NSS), it announced its first investment of US$10 million last month in Pendulum Therapeutics – a US biotech developing microbiome-targeted products focused on restoring metabolic health.

Komal Mistry-Mehta, chief innovation and brand officer at Fonterra, and NSS board member, said gut health would remain its initial focus for investments.

“While the scope of the business will evolve, the early focus for NSS is on gut health. Microbiome, the collection of all the microorganisms that live in the digestive system, has emerged as a new field with growing evidence of its pivotal role in human health.

“This is a really exciting area for us to be involved in as research demonstrates that microbiome is the cornerstone of human health in areas such as immunity, women’s health, mental health/ cognitive health and healthy ageing,” she explained.

Focus on personalised nutrition

Through NSS, it is hoping to explore new business models that “go beyond everyday lifestyle and wellness products, looking at the intersect between food, medicine, and technology.”

“There is increasing acceptance that an individual’s health is just that – individual. A one-sized fits all approach doesn’t always cut it. So, for us, NSS is about creating and delivering targeted and bespoke nutrition solutions that can help to optimise the health of individuals around the world,” Mistry-Mehta added.

It is looking to partner with global start-ups, and said that investment hotspots are in the US and China where there is a high potential for scaling up personalised nutrition solutions.

Investment approach

NSS will operate as a standalone business with its CEO and board. It said that having a separate governance model would ensure that it has the agility and speed on investment needs in a fast-moving space.

“To help manage uncertainty and reach growth ambitions, NSS will use a repeatable business building approach, focused on a series of prioritised platforms that include gut health. These ventures will align to a series of strategic choices based on market size, growth rates, competitive intensity, disruptive potential and right to win,” it added.

It adopts a dual approach of funding, as well as capacity building – with established knowledge in dairy science and food formulation as well as global manufacturing footprint – to support its new ventures.

On the other hand, “Fonterra meanwhile will benefit from the emerging technologies, advancements in science, and novel channels to market provided by investments and partnerships,” Mistry-Mehta said.

In its press release detailing its partnership with Pendulum, it said that it would capitalise on its manufacturing expertise and established presence in global markets, while tapping into Pendulum’s innovation capabilities in the microbiome space and its US market knowledge.

“Where there is an opportunity to leverage our IP, manufacturing, production capability and global network to help accelerate start-ups, or to advance a proof of concept, we will of course look to facilitate this where it makes sense,” it added.