Doorstop – Naturo, Coolum
8 January 2021
Subject: Naturo’s milk innovation
Ted O’Brien: So, can I just say a very big welcome and it’s wonderful to be here in Coolum at Naturo, a world-leading, innovative company here locally and we’re very grateful to Jeff Hastings. Jeff, thank you to you and your leadership team and the staff, for hosting us here and we welcome the Minister for Industry, Science and Technology Karen Andrews. It’s wonderful to have Karen in town. Let me pass to the Minister, for some exciting news.
Karen Andrews: Well, thank you, Ted and it’s fabulous to be here with you at Coolum and at Naturo, for a very significant announcement. So, the announcement that we’re making today is that there will be $1 million in Federal Government funding, that will go to Naturo, to commercialise a world-leading innovation that they have developed right here, in Coolum, in Queensland; that will result in milk being able to be used for a 60-day period. So, I will ask the CEO General Manager, Jeff, to speak about that shortly. But, just by way of background, the Morrison Government is absolutely committed to supporting businesses to accelerate commercialisation. We understand that it’s important, not just to have the good ideas, but be able to take these good ideas through the commercial phase. Now, the product that has been developed here will certainly support growth in the domestic market, but also in international markets for fresh milk, that has a shelf life refrigerated of up to 60 days. Now, as part of our Accelerating Commercialisation grants, over the last five years, this Government has supported around about 500 businesses and injected about $240 million plus into the economy to make sure that we are accelerating commercialisation. And of course, last year the Prime Minister and I announced the Modern Manufacturing Strategy where we named six National Manufacturing Priorities. One of those priorities is food and beverage and of course, the work that Naturo is doing will actually feed into that as part of the Food and Beverage National Manufacturing Priority. So, we are keen to assist this government – this company to commercialise their product. That is why we have committed $1 million in funding, to assist in that commercialisation process. We want them to continue to work with our research agencies. They have a long history of working with the CSIRO, and we want assist them to be able to take their product to distribute domestically, right here in Australia, but internationally as well. Because as you would understand, there are many countries that have limited access to have fresh milk. We are keen to work with those countries to provide, what appears to be, a very excellent product for them. So, I'll hand back to Ted, now.
Ted O’Brien: Well, Minister, thank you very much. $1 million is not a bad way to start off the year, and the Minister has been instrumental, particularly over the year that has been in 2020 ensuring that the leadership is provided with the Government on everything from the PPE, through to ensuring that as a nation, we strengthen our manufacturing sector, we build that sovereign capability. And in walks Naturo. When Jeff came and saw me last year and laid out their plans, it was a no-brainer. I mean, here we have a product that is in our sweet spot as a country. We have a reputation for clean and green around the world. We have a reputation for dairy and now we have this company, born and bred here locally on the Sunshine Coast, which has created a world-first innovative product. Jeff created that around his kitchen at home in Mapleton and it has been a six-year journey. And yet again, we have this region, the Sunshine Coast, which is the most entrepreneurial region in the country, coming up with ideas that are going to fundamentally disrupt the global dairy industry. It started here, it's going to be piloted here and Minister, very grateful for the contribution of $1 million on behalf of the Federal Government. With that, Jeff, over to you.
Jeff Hastings: Thank you, Ted, and behalf of the full Naturo team, can I extend a welcome. Our local member, Ted and also, Minister Karen Andrews and can I also particularly extend another thank you for your belief in small business, your belief in innovation. We are very grateful for the Federal Government for offering us this million-dollar funding. It’s going to go a long away in our world, to allow us to commercialise what’s been, as Ted’s mentioned, a six-year journey for us. This funding allows us to complete the commercial project, allow us to validate the technology, it is a world first technology. It’s called Haelen technology and it will disrupt the market. But, we need to prove it and we need to validate it. That’s what this process starting behind me is all about, so the funding we’ve received will go to complete the job, it will go to validate the technology and then it will go to validate the market that we intend to sell into over the next period. This is stage one for us. We’re also looking forward to a further stage two, larger scale factory development, circa middle of the year, on the back of the success from this plant. So, again, can I say on behalf of our full Naturo team, thank you very much and hope you enjoy your visit.
Question: Jeff, sorry, you said some things that this money is going to be used for, what is the money – like, can you be a bit more nuts and bolts? How is this money going to be spent, what are you going to do with it?
Jeff Hastings: So, the $1 million funding is really about finishing off the job we’ve started. It’s about buying, building all our machinery line; it’s about installing it, it’s about commissioning it through a series of international suppliers that we have behind us and it’s getting that right. It’s a brand new technology. So, it’s not a system where you can push a button and it will work, it doesn’t work that way. Fortunately, we’ve got a very talented team behind me, which with them, we are getting this working with this grant and we are then validating the outcomes of that work. So, when we start producing the milk, we then validate the safety in Queensland accreditation. It allows us to be the first business to sell milk, without being pasteurised. So, that’s a big advantage for us.
Question: Two years ago you announced that you were working on this, what’s changed in the last two years?
Jeff Hastings: What’s changed? The industry, you mean?
Question: Like for you, where are you at now? Have you progressed anymore?
Jeff Hastings: It’s been a dynamic industry. The dairy industry has changed significantly. And that’s a shame. There is a- one of the good news stories, we will have to say as well, is a promotion of the dairy industry. This is a world first technology - it’s going to apply to Australian dairy farmers. And as part of our business ethos, we’re all about trying to prove viability and sustainability at farmgate – that’s my background and that’s what we do as a business. So, the next journey will be a good news story for them as well.
Question: Without giving away any secrets, how does that Haelen technology work? How do you keep the milk in your fridge for that long?
Jeff Hastings: Pasteurisation is a process that's been around for 200 years-ish. It relies on heating or cooking the milk to a certain temperature, which kills the bugs. We don’t do any of that - except for kill the bugs. So we, we have developed a technology that does not rely on heat. It's a multi-step technology, there’s several parts to it, but it allows us to create a very safe product, in fact safer than pasteurisation actually. But through that process, we are able to, not only extend the shelf life as we’ve discussed, but we are able to not reduce or minimise the nutritional value of the milk as pasteurisation does. So we retain much more of the natural goodness in milk that otherwise gets destroyed or [indistinct] through pasteurisation. So healthier product, longer shelf life, better for you.
Question: Jeff, how long did it take for you to determine that it would last for 60 days?
Jeff Hastings: Sorry, how long does it?
Question: How long did it take for you to determine or test the fact that it would last for 60 days? How have you done that?
Jeff Hastings: That that part of the journey has probably been four years I would say. It's a long road. We sat down with CSIRO and DFSV, Dairy Food Safety Victoria, the regulator and a validating scientific organisation, independent one. We sat down with them four years ago. We asked them that same question, actually, how do we do this? Which pathogens do we have to prove we can kill? What protocols do we need to kill them under? We set about proving that up and developing those technologies and techniques. So it's a long journey. Took a long time. The majority of the work’s been done right here, and here we are with a first commercial plant [indistinct].
Question: So you’re actually going to be – how long until your factory here is producing milk that people can buy.
Jeff Hastings: Sure. As part of the AC grant funds, we are finalising the validation work that’s the way that the regulator gets involved with to make sure we are safe for human consumption. That process will be completed circa end of February, and after that we’ll be on the market, per se, into our own business partners around Queensland commercially. So, March.
Question: March? So in March, Queenslanders can buy this milk -
Jeff Hastings: Yes Queenslanders will drink our milk in March.
Question: I guess following on from that, is the milk coming from dairies around Queensland, around Australia …
Jeff Hastings: We source our milk out of the Mary Valley. They’ve had a bit of hard run over the years, so it’s nice to be able to get a little bit back there. Milk comes out of the Mary Valley and we process it here.
Question: How will it be a game changer do you think for local dairies? How do you think it will be for local dairies and for farmers?
Jeff Hastings: As I mentioned earlier, part of our ethos or who we are as Naturo is about trying to give back to farmgate. So we will- because we have an upside, if you like, on our commercial side, we’re also able to offer some of that to our dairy farmers at farmgate. So we're hoping to provide a better return for dairy farmers. It’ll also allow them to access our world first technology and, through that, export markets. So I think there's a good story to be had for a lot of the dairy farmers.
Question: Will it be their main source of- will you be a main buyer for dairy farmers, or is it going to give them an extra option so they might send some of their milk someplace and some of it to you if they’ve got extra or whatever. Like, how is that-
Jeff Hastings: [Interrupts] Initially no. This is a very small plant behind you. It’s a pilot factory. So initially no, but as I say, at stage two, middle of this year we hope, will be the production of a much larger facility, and that will then make a much more significant impact at farmgate.
Question: And why did you need a government grant? Like, were the banks not willing- not keen on an experimental technology? Could you not get the money in the commercial finance market?
Jeff Hastings: Sorry, why did we get the?
Question: Yeah. Yeah. Why did you go to government to get the money?
Jeff Hastings: Well, we understood the program and thought that was a good fit given their five initiatives. We fit there nicely with that program, and it’s an incredible help for us. So without that, the road’s a lot harder, I can tell you. We’re a small business, small team, so these initiatives we have from Federal Government, they’re vital for small companies like ours.
Question: And do you know how many staff you have now and how many you’ll have when you’re processing in February, March?
Jeff Hastings: Sure. So right now, we’ve employed five new staff into the business. Once we get processing in March, that’ll be increased by another six or seven. And once we get the stage two factory, another 32 full-time and part-time employees.
Question: How are you measuring success of this pilot stage, just as to whether you can have further factories and staff?
Jeff Hastings: The key success is the validation from the state regulator. [Indistinct] we approve process for safe consumption [indistinct]… We’re very confident we’ll achieve that end of February. Once we’ve got that, second part is really to understand more about the nutritional profile [indistinct]… people have got something more to say around the health properties of our milk [indistinct]… so that current step as part of the grant funding that we’ve received, so the validation and the nutritional profiling, and then we’ll have- then we know [indistinct]…
Question: Do you need to bring on a certain number of, say, businesses, farmers, that kind of thing to see the success of this long term, or are you already safe?
Jeff Hastings: Look, to be honest we’ve got a known network to us at the moment, which will certainly feed everything you need right now and probably much of this year, but come the middle of the year when we go to that stage two of our development, we’ll be looking for more production for farming contribution.
Question: With that nutritional profile, does the process compromise anything or is it just as good drinking a glass of milk today as it would be in 60 days.
Jeff Hastings: Yeah. It’s the same profile throughout its journey, its 60-day journey. And we’re not adding anything to it to make it nutritious, we’re just retaining more of what the cow gave us. We’re not destroying some of those things that pasteurisation destroys. So we’re retaining the nutrition rather than add it.
Question: And I know it’s about milk today, but with avocados, is it that same Haelen technology that’s been used to prevent them from turning them brown?
Jeff Hastings: No, nothing- completely opposite technologies- completely different technologies. No relevance at all. The avocado technology stops avocados from going brown for 10 days. Totally natural process again. Probably the only area where they’re common is that everything we do here at Naturo is all about no chemicals, no additives, nothing added, it’s natural, we just find natural ways of solving the problem. It’s the same with the avocado. Totally natural process. Stops the avocados going brown. Slices or dices or pulp. And we are now exporting that to 10 countries around the world, so it’s a good news story there. And hopefully we’ll create another one.
Question: Minister, if I can just grab a question, what was it about this program, I guess, that stood out to the Federal Government to say: yep, we need to get behind this?
Karen Andrews: Okay. So let me just add a couple of points to what we’ve just heard from Jeff and from Ted. The Federal Government, through this Accelerating Commercialisation grant program is investing in businesses that are investing in themselves. So this is matched funding, so it requires a minimum of 50/50 funding. So we, as a government, are committing $1 million. Naturo will also be committing $1 million as well to this particular funding program. We understand as the Government that there is a big gap between a good idea and a commercial outcome. So the Accelerating Commercialisation grants are intended to bridge that gap, to assist businesses to take those good ideas and get them ready for market. And that's why, in this case, it’s looking at supporting Naturo to fully commission its pilot plans here to continue going through the testing processes, to trial that in markets, and then getting ready to go globally as well as domestically. So they’re some of the things that we look at when we're determining where the funding is going to go. Of course, there will have been investment for Naturo and others that is required beyond that. And federally, we have been working very closely with, for example, venture capitalists, superannuation funds, so that they can then look at what support they can offer to these businesses over the long term. Specifically in relation to Naturo and this particular product, we are aware that agriculture, food and beverage in particular from a manufacturing point of view, is critical to Australia. We have significant strengths in agriculture and in food production. So as a Government, we are actively looking at how we can support food and beverage businesses. So Naturo was a business that was able to demonstrate to the Government that it had a potentially commercially viable solution. Now, to be able to sell milk that has a 60-day life is going to be a great support to people in remote communities, people who live on their own and have very limited milk supplies, so they’re not having to tip out half of their milk after a week or so in the fridge. So there is a real opportunity. So we saw the commercialisation prospects of this. We saw that this was a local business established here in Coolum that had support of the local community, support of the local member, Ted O’Brien. And there are real opportunities for the commercialisation if we can get Naturo on the right path to get through what is often considered as the valley of death, for a good idea to actual commercialisation.
Question: Are there any caveats of the funding, any strings attached? Does there have to meet any particular terms?
Karen Andrews: We will certainly be monitoring that progress. And of course, that's one of the issues for getting grant funding. This is not just an announcement that this is a $1 million. We will continue to work with Naturo and the other businesses that we are providing funding to under this particular program, because this is taxpayer dollars and there needs to be a return on that to the taxpayer. So we want Naturo to succeed. That's why we have provided a level of investment through this grant funding. But we want them to continue to grow. So we will actively work with them to make sure that they are assisted to get through the process of regulatory approvals and have the opportunity to access domestic and international markets.
Question: In terms of international trade, what kind of asset is a company like this to the Government?
Karen Andrews: It has enormous potential, because one of our strengths is in food and beverage and agriculture. Australia is widely regarded as a nation that provides- produces clean green food. Our food products are definitely valued, they are wanted by many overseas individuals and countries now. When we established the Manufacturing Modernisation Strategy, what we looked for is the areas that we have competitive or comparative strengths. Agriculture is competitive and also a comparative strength here for us. So we looked at how we break that down into where the priorities within that would be. Food processing is one of the clear areas where we already have a strong base. So it’s an opportunity to grow that. Now with the dairy industry, as the Government, we do want to support them, want to grow our food manufacturing. So the investment here, we believe, is going to create more jobs through the pilot stage. But assuming that commercialisation is successful, business should be able to continue to grow, to create more jobs, and to inject more into our local communities and the national economy.