Scientists put the healthy into eating and exports

Foods enhanced in the laboratory are turning the industry on its head and New Zealand has the inside running, reports DITA DE BONI.

If you have ever eaten yoghurt fortified with acidophilus bacteria, margarine that lowers cholesterol, or oat bran-enhanced muesli bars, you have sampled a trend that promises to turn healthy eating - and New Zealand's food-based export sector - on its head.

Functional foods, where naturally occurring elements are added to enhance health benefits, are big business.

Companies are repositioning their products to take advantage of a worldwide obsession with healthy eating.

New Zealand's commodity-based food industry is looking to move into the premium, value-added market worldwide.

Over half our exports are food, and the total industry generates about $17 billion and rising.

More than a quarter of the local industry is made up of specialist products that did not exist a decade ago.

This is widely credited to a highly innovative food technology sector that has attracted vast international interest.

The success of New Zealand's food technologists comes more sharply into focus when compared with Australia, where the food manufacturing industry has been declared to be in "serious decline" and "plagued by poor profitability and underperformance".

A recent report from Australia's Institute of Public Affairs, entitled Take Away, Take Away: The self-induced destruction of the Australian food manufacturing industry, says the country has a bad reputation as a place for global food companies to invest in processing, with a "weak commitment to innovation".

In New Zealand, conversely, innovation is one of our strongest suits and if we had more money, time and trained technologists, we could be even better, says Professor Paul Moughan of Massey University.

Moughan, who heads the university's Institute for Food Nutrition and Human Health, established in 1998, is overseeing $10 million of research and development contracts with businesses both local and international, looking at ways in which it can use its scientific knowledge to add value to ordinary food products.

Massey's bachelor of food technology degree course is the largest programme of its kind in the Southern Hemisphere, with more than 160 graduates and a staff of 180.

But the institute churning out these graduates is radical in many other ways as well.

It openly touts for business, earns a good income and introduces students to confidentiality clauses and the like a long time before they enter the corporate workplace proper.

It also rattles the cerebral, education-for-education's sake ideal so prevalent in our national universities.

And that, according to Moughan, is what the Knowledge Wave is all about - using the expertise in our universities to make industries smarter and more competitive.

Watertight contracts solidify a casual relationship that has existed for years between higher learning institutes and business.

What makes Massey's model different is that it is eager to profit just as much from a technological breakthrough as the business it is assisting.

The university is not at all shy about that commercial thrust.

"I think we have a real role in innovating not just the food industry but also the lifestyle industry," says Moughan.

"And as our name, Food, Nutrition and Human Health [implies], we are wider than just food.

"We see a huge trend worldwide to lifestyle products, so we are emphasising human nutrition, food science and food technology ... and also functional foods, which are foods that have physiological effects on the body."

To this end, the institute's contracts with heavyweights such as Fonterra, Roche, Goodman Fielder and Zespri, as well as overseas concerns such as American biotechnology company Alltech and German chemical producer Degussa, have been instrumental in helping the local food technology industry to cement a solid international reputation.

Its largest contract is with Fonterra, to which it is a "preferred research provider", and although Moughan will not disclose the value of that work, it is thought to be in the millions.

In fact, Fonterra has its own research centre within the institute, called the Milk and Health Research Centre, complete with a mini dairy factory and production line.

Never far from the headlines, the institute has an active marketing and PR department that keeps its people in print.

They weigh in on all topics related to food technology and nutrition. A particular bugbear at present is the scarcity of food technology graduates to service the multibillion-dollar industry.

How well does the commercial thrust of the institute's work sit with the academic focus of a university?

Moughan, who points out that half of California's economic growth since World War II is directly related to research and development initiatives from universities, agrees that the Americanised model has drawn allegations of impropriety, but he is adamant that Massey would never be compromised.

"If you take the very best US universities, I don't think the claims [of corporate interference] can really be substantiated.

"I've travelled to the US and Europe a lot, to the universities there, and I don't see any evidence of that."

However, it remains to be seen just how far Massey could comment on matters that may upset its numerous clients.

If, for example, the institute worked for a company that sold infant formula to Third World countries (Fonterra does not make infant formula) - a highly controversial practice and one with definite nutrition implications for those infants - could the institute front up with scientific evidence that might indict a multimillion-dollar client?

Moughan says the answer is only to take on work that meets a high ethical standard in the first place.

"If we were approached by a company to do work on an infant formula that we thought would take advantage of a sector of the human population, that's a sector of work we would not want to be involved in."

Moughan says Massey is first and foremost a university, "and we must be independent".

"We take great pains to preserve that independence.

"We will work for anybody as long as we believe the work is ethically sound, is of academic interest to our staff, and we will be adequately remunerated for our efforts," he says.

"We don't have a closed-door policy to any particular companies."

The institute offers a variety of business contracts that establish which party owns the rights to any intellectual property developed.

"Sometimes we'll have a company that will want to completely own the IP.

"In that case, they pay upfront for the work to be done and we make sure we cost the work to be well-rewarded for the loss of that.

"There are many combinations - joint ventures, sharing IP, royalty returns.

"You need to be flexible because different companies in different parts of the world have different attitudes."

The large commercial clients prefer to retain the intellectual properties involving their products.

A good example of such a product, a functional food that the institute worked on with Fonterra, is the Fernleaf Defense milk powder, which promises to increase sales in the lucrative Asian market.

Defense is a powder with a freeze-dried probiotic bacterium added to improve intestinal health.

The process is a first for the New Zealand dairy industry.

Defense, sold only in Taiwan at present and aimed at children between the ages of 3 and 7, is priced 70 per cent higher than full-cream milk powder and has a 10 per cent premium over its market competitors.

Joanne Todd, nutrition manager at Fonterra, says that while Asian consumers are accustomed to buying milk products with "good bacteria" added - an Asian product called Yakult has recently hit the shelves in New Zealand - Fonterra wanted to develop its own patented product to strengthen its market position in the ever-growing Asia-Pacific market.

A product with the same probiotic bacterium is sold in Australia in the form of cheese, and Todd says the possibilities for its further application include liquid milk and yoghurt.

The total probiotic market in the region is worth $2.2 billion.

Donna Lequesue, a Fonterra health platform manager, says the potential for probiotic products to fight infection and ease conditions such as asthma and allergies has been recognised for about 100 years in Europe but has yet to hit its full potential in this part of the world.

The United States is another enormous, under-developed market.

But for functional foods to flourish, scientific testing must back therapeutic claims.

"The World Health Organisation has recently warned consumers to watch health claims on products.

"We felt that our product, with a proper scientific development and testing, can withstand any tightened regulatory systems," says Lequesue.

Of course, it is not only the big-budget products that come across the benches at the institute.

The producers of avocado oil have used its scientists, as well as Wellington's Hardieboys Ginger Beer.

Last year, the institute developed jellybeans that contained propolis and were therefore bactericidal.

But Government money is needed to finance non-commercial research, says Moughan.

The institute has just been granted one of the Government's first research and development grants worth about $2 million annually for the next three years.

It will finance a new research centre, to be called the Riddet centre, and allow the "best minds in the country" to come together and work on nutrition and heath projects.

Such work can produce intellectual property that the university could sell at a premium in the industry.

Genetic modification is the other area of food technology that the institute is constrained in because of the Government's two-year moratorium on testing of genetically-altered material.

Moughan says genetic modification offers a "huge opportunity" to make better and more diverse functional foods.

"If the rest of the world embraces GE and New Zealand doesn't, then the food industry will change around us and we won't be part of that change," he says.

"I'm not giving a value judgment about whether New Zealand should be involved in GE or not.

"I believe that it's a multifaceted problem, with many factors we have to take into account: cultural dimensions, ethical, scientific, safety and the rest.

"There are ramifications for all parts of the economy, not just the food industry ...

"I think we do have to take it slowly and get it right."

The institute is equipped to test the safety of genetically modified material, but cannot do so in New Zealand until the ban is lifted.

However, it will go overseas to test a client's product.

Since the institute aims to draw a third of its funding from overseas contracts by 2005, it is likely to delve into genetic modification long before the technology reaches its local labs.

Moughan says a related finding, the mapping of the human genome, is more important for the institute.

Scientists will soon be able to genotype people, "so you'll be able to have a blood test that will discover if you have got a genetic predisposition to diabetes or heart disease or something else.

"That's going to be a huge push for functional foods, because you will have a designer diet, and a designer lifestyle, potentially from the time you are very young.

"Functional foods will become even more and more important.

"You can see certain people with certain dispositions following certain dietary prescriptions - particular foods and lifestyles - and we can do a huge amount to enhance health worldwide if we do that."

But Moughan feels genomic development will probably go hand in hand with the emergence of genetically modified food.

"My own personal opinion is that one day GE foods will be accepted in this country and will be part of the normal course of events.

"But we'll be guided by the industry and New Zealand society - we are here to serve our country, not to dictate to it. We steer an even course," says Moughan.

"We will give advice, scientific information, tell the truth the best we can about the whole situation and ramifications, but ultimately it's for New Zealand society to make its own decisions."