Major dairy player joins up with BASF for NPD

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Dairy company Fonterra and German vitamin maker BASF are
collaborating on research to find new commercial opportunities for
value-added, healthy dairy products.

BASF South East Asia president Dr Harald Lauke said the partnership was BASF's first research cooperation with a dairy company. It underlines the sustained drive by the dairy industry to remain at the forefront of functional food development.

BASF, the world's second biggest vitamin maker, already supplies Fonterra with supplements for nutritional milk products. Last month the two companies announced they would co-fund research into the development of customised convenience foods. The project aims to develop vending machines capable of delivering snack foods tailored to individual dietary needs and taste preferences.

"Global demand for innovative dairy products is increasing all the time,"​ said Fonterra CEO Andrew Ferrier. "To grow our value-added business to meet that demand, we need a strong base of quality research, which makes partnerships like this critical to our future growth and success."

The dairy industry is already one of the biggest contributors to the functional food market - along with cereals and spreads, yoghurts and yoghurt drinks accounted for around 87 per cent of the UK market's value over the 12-month period ending October 2003, according to a recent KeyNote report.

The European probiotic drinks market was worth more than €1 billion in 2003 and is showing growth of 30-40 per cent annually, faster than the growth in functional foods, valued at around 7 per cent annually in the most important markets, such as the UK and Germany.

Recent innovations in the dairy sector include Zen, a magnesium-enriched fermented milk drink, launched by French firm Danone on the Belgian market this month, and an omega-3 enriched fresh milk, developed by Ireland's Dawn Dairies.

Further development of such health-orientated and functional products will be a key driver for dairy in the coming years, according to industry analysts.

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