Redpark Farm owners Wayne and Jay Schmack were with fellow farmer shareholders Dave and Karen Ellis on a rugby trip to watch the All Blacks play South Africa in September.
They were invited by Southern Central Canterbury regional manager Tom Munro to visit Te Mātāpuna Innovation Lab during a layover in Singapore.
Mrs Schmack said the visit to the kitchen facilities was a real eye-opener.
"I had no idea it existed so we just thought we were going to go to the office, get a quick tour and talk to a couple of people about what they did and then we walked in there and I thought ‘wow, this is different’. The kitchen was reasonably new and they decided they needed that hub there for the Southeast Asia market.
"Obviously we produce the milk and do our grass-root thing and it was really interesting seeing all the ingredients. We see the likes of cheese and milk and butter in our supermarkets, but don’t realise worldwide how much Fonterra do in so many different markets."
She said the many different drinks stood out for them, including the lunch box variety of protein drinks similar to the Up & Go drinks available here.
"They were certainly sweet and not my cup of tea, but obviously getting those sort of milk products to kids, that’s huge over there.
"I couldn’t believe how many of them there were and the amount of protein supplements by brands relevant to that country, but using our product."
They sampled some of the products and also learned about the reasons behind the potential divestment of the co-op’s consumer business.
The sale, which includes major brands Anchor and Mainland, was confirmed this month with details of how it will be sold yet to be fleshed out.
The Schmacks have a contract milker overseeing about 820 cows milked twice daily at Redpark Farm in the Ruapuna and Montalto area.
Redpark is a self-contained unit with winter feed and some barley grown on site and the herd winters on with young stock grazed both on and off the property.
Mrs Schmack said it was encouraging to see the amount of work going into adding value to farmers’ milk and the scale of markets in Asia where co-op ingredients could be found.
"In the past we felt we were heavily reliant on China, so that was good as a shareholder to think we are diversifying a bit more."
The lab, which opened in February, is among similar co-op facilities in Melbourne, Amsterdam, Chicago and six in China.
They act as an in-market extension of the Fonterra Research and Development Centre in Palmerston North, with teams working on a range of innovations including ingredients, such as bakery products, beverages, dairy foods and snacks, to suit local trends, tastes and cultures.
The Singapore lab is focused on its Southeast Asian markets and hosts customers and suppliers to develop products tailored to the region.
Mr Munro said the growing health protein story obviously struck a chord with the Schmacks.
"You see more and more of that and what we can do with different functional proteins.
"So it’s really good for our farmers to see where their milk goes and the value added through visiting those places such as our innovation centre."
He said the innovation lab was a valuable centre for customers to experience what the ingredients did, how they functioned in certain applications and to showcase products and how they performed. The lab also allowed food technical teams to test products.
Mr Munro said most farmers would have a basic understanding of the dairy range, but it was not until they went into the markets they could grasp the wider picture.
"That’s why it’s so important when they do travel around the world that they do call in to our offices and see what they are doing. So that’s why I encourage the opportunity to talk to these guys when they are travelling because that’s when they will see where their milk ends up and the value which is being added to it."
The earning side of their dividend comes from teams adding value to milk by innovating in products and developing more functional products.
He has been in the Canterbury role for nearly a year after spending seven years in Singapore with the co-op’s ingredients business as regional sales manager.
"When I did bump into Jay and Wayne at a farmer event they mentioned they were travelling and the first thing I asked was if they were going through Singapore so we could get them into these offices, which as shareholders are their offices, and see what we do offshore."
Southeast Asia is developing from a commodity market into the protein pool, with growth in the likes of high-protein beverages and bars, health and wellness products and functional foods as markets became more sophisticated.
Mr Munro said the Singapore diet was a good mix because of the Chinese, Malay and Indian influences and had a developed palate.
Mrs Schmack said the many people they observed consuming protein-based drinks during their short stay made a lasting impression.
Fonterra has a head office in Singapore for about 19 South and East Asian markets.
The small nation is a hub for dairy products being shipped elsewhere, while its ingredients are also added to blends including the likes of sugar and cocoa before being shipped to other countries.
