Bellamy’s forms infant formula alliance with Fonterra

Posted by AFN Staff Writers on 30th November 2015

Publicly-listed organic infant food producer Bellamy’s has entered into a multi-million dollar agreement with dairy producer Fonterra.


The strategic agreement has been made for five years and Fonterra Oceania Managing Director Judith Swales said it was part of her company’s transformation of its Australian business.


 “This is our strategy in action for Australia where we focus on the areas we can win in a highly competitive market to deliver the best returns,” said Swales.


“We are actively growing our nutritionals business through strategic partnerships and agreements which will see the Darnum nutritionals plant move towards full capacity, Swales continued.


“Our Australian business has particular ingredients strengths in cheese, whey and nutritionals, complemented by our strong consumer and foodservice businesses; and today’s announcement with Bellamy’s Australia – one of the fastest growing infant formula companies – reaffirms our strength in nutritionals,” Swales said.


“The Darnum plant [in Gippsland, Victoria] is a leading nutritionals plant in Fonterra’s global network. Leveraging our Fonterra Research and Development Centre in Palmerston North, the largest dairy innovation centre in the southern hemisphere, we will bring innovation to the Darnum plant and the nutritionals market to capture growing demand,” said Swales.


Customers have recently expressed frustrations saying that they have been unable to find Bellamy’s Organic infant formula. Australian supermarkets and chemists are currently enforcing strict purchase limits after some consumers were accused of clearing shelves

in preparation for China’s largest annual online shopping day “Singles Day”.


Fonterra said it decided to partner with Bellamy’s, recognising the company as one of Australia’s fastest growing infant formula producers. It also stated that Bellamy’s has strong brand recognition and expertise in the organic ingredient supply chain.


In the financial year ending the 30 June 2015 Bellamy’s achieved a revenue growth of 156 per cent on the prior year. Infant formula comprises 88 per cent of Bellamy’s’ profits.


 “The proposed multi-million dollar strategic agreement will help support the growth of Bellamy’s Organic in Australia and abroad, and builds on our strong current relationship,” said Fonterra’s Swales.


“We are also nearing the finalisation of the Darnum joint venture with Beingmate Baby and Child Food Company Ltd following the recent formal approval by Beingmate’s Board and shareholders,” Swales said.


Infant Nutrition Council calls for clearer labelling


At the same time as Fonterra announced its agreement with Bellamy’s, the Infant Nutrition Council Australia and New Zealand has called for changes in infant formula labelling restrictions.


Under the Australia New Zealand Food Standards Code (FSANZ), regulations infant formula producers are restricted in the claims they can make on labelling. Infant Nutrition Council CEO, Jan Carey, says this is leaving parents confused and unsure what distinguishes one infant formula from the next.


“Not all infant formula products are the same – but parents can’t find out from the pack what ingredients are in it, and the labels don’t explain the scientifically validated benefits of the ingredients,” said Carey.


“This means they have no way of knowing why one product costs $15 and another costs $30,” she said.


The council said that its recent research also found:


  • almost half of the respondents were not aware of ingredients in the formula they bought, nor did they understand the role of ingredients in that formula
  • one in three felt they received insufficient information when purchasing formula for the first time
  • only three per cent found product labelling to be the most useful source of information on formula.


Australia’s food regulatory standards agency, Food Standards Australia New Zealand (FSANZ) is currently reviewing Standard 2.9.1 – Infant Formula Products and other standards of the Australia New Zealand Food Standards Code (the Food Standards Code) that regulate infant formula products.


“Compared to other countries, Australia and New Zealand are lagging in their willingness to provide adequate information to parents and carers about the formula they give their infants,” Carey said on behalf of the makers of infant nutrition products.


“Countries like Canada, Malaysia and China allow nutrient content and function claims – both of which are prohibited here – to be displayed on packaging. This helps parents and carers to understand exactly what is in the products, and helps them differentiate between types of products. Withholding this information does not help parents and carers make informed decisions,” said the Infant Nutrition Council’s Carey.


The Infant Nutrition Council is the association for the infant formula industry in Australia and New Zealand. The INC represents manufacturers, marketers and suppliers, and represents over 95 per cent of the volume of infant formula manufactured and marketed in Australia and New Zealand.