Fonterra, New Image to tackle Asian colostrum markets

Two of the nation's biggest players in the colostrum market, Fonterra and New Image Group Ltd, are joining to take the nutriceutical ingredient into mainstream beverage markets.

Former Wairarapa farmer Graeme Clegg -- who started Manukau health supplement exporter New Image Group in 1984 -- has turned the bovine secretion into a sought-after dietary supplement.

Colostrum exporters have been on a roll in Asia since the SARS outbreak in 2003, when a lot of publicity was given to the fact that colostrum taken from cows in the first four or five milkings after giving birth contains high levels of immunoglobins (IgG) which boost the immune systems of humans.

Bovine colostrum is keenly sought by the health food sector, and for pharmaceutical use.

New Image Group today signed a 50/50 joint venture of a licence agreement with Fonterra Cooperative Group Ltd to form Primary Nutrition Ltd.

Fonterra announced last year it had developed a technique that allows colostrum to be added to ready-to-drink beverages with a longer shelf-life, opening up opportunities for new kinds of products and building sales of the ingredient in Asia.

But Fonterra's method, for which patents have been filled in 30 countries, uses a standard cold-fill bottling process to create a consumer package. It is then put through a second, all-natural process to prevent further spoilage, avoiding use of additives and preservatives so that nutrition, flavour and colour are unaffected.

Fonterra's prototype Colostrum Shot drinks were road-tested at the Food Ingredients China trade show in Shanghai last year.

At the time, Nigel Little, manager of new options, Fonterra Ingredients, predicted the concept "has the potential to more than double the amount of colostrum currently sold to the Chinese market".

The colostrum shot can be stored for up to six months at ambient temperatures - although it is designed to be consumed as a cold beverage -- and colostrum could potentially be added to yogurt drinks and smoothies.

Today's agreement enables New Image Group to tap into Fonterra's research as well as the huge supplies of colostrum it has been buying from Fonterra farmers since before the big cooperative was formed.

The joint venture will have exclusive manufacturing rights in New Zealand, and Primary Nutrition will start selling the 100ml shots next year in both Asia and New Zealand.

Fonterra said its new technology follows six years of research to put into human foods the colostrum which provides newborn calves with high levels of active antibodies that help to stimulate the immune system, and also contains bovine growth factors and other bioactive compounds for healing and protection.

The biggest market being targeted is China. Independent market research commissioned in Shanghai found that 40 percent of Chinese consumers were aware of colostrum and 80 percent of those associated it with strengthening the immune system.

At the top end of the market in China, pure powdered colostrum can sell for over $1000/kg.

Mr Clegg began with direct sales marketing of nutritional, weight loss and energy products in 1984, and also sells a "power pill" for cars, claimed to improve fuel economy.

Mr Clegg -- who started out in the 1950s as a shearer and built up one of the largest contracting gangs in Australasia -- built New Image up to a $50 million turnover in the late 1990s, exporting 95 percent of the product and using his own direct marketing sales force.

Sales collapsed to $7 million after the Asian currency crisis of 1998, but he rebuilt them to previous levels and forecast that by 2008 turnover would be up to $100 million.

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