'Miracle milk' earning NZ millions in Asia

By PHILIPPA STEVENSON

In China, chuckles Trevor Lock, he is known as the "father of colostrum". It is a funny thought. Colostrum, after all, could hardly be a more female creation.

In mammals as varied as cows, rabbits, whales and humans, colostrum is the 'pre milk' a mother's mammary glands produce in the first days after she gives birth. Normal milk follows in about four days.

This potion protects the newborn by imparting immunity to disease, and provides nutrition in the first days of life.

Nowadays adults buy colostrum off the shop shelf - in powder, tablets, capsules, health food bars, milky drinks, combined with green tea, and in cosmetics.

And that's the opening for New Zealand. Our colostrum is a world leader. It comes from cows free from BSE or mad cow disease, grazing outdoors on natural pasture.

Our biggest company, Fonterra, is the world's biggest supplier and produces arguably the best quality product. Lock's firm sells over $10 million worth of colostrum-based products a year.

Other New Zealand companies are also making money out of it. Former Wairarapa farmer Graeme Clegg employs 30 people in Mangere and says he is turning over $50 million a year, and aiming for more, selling mainly to Asian consumers.

Colostrum's popularity is rising, especially in the planet's biggest market - China.

The Chinese attribute colostrum's paternity to Lock, a one-time petrochemist and now director of a Morrinsville company formulating functional foods. Worldwide, the supplements market is worth an estimated US$50 billion ($80.6 billion) and the market for functional foods (those which provide specific benefits, beyond simple nutrition) is put at US$40 billion, of which sales of foods with verifiable label claims total around US$9 billion. Alone, the dairy-related functional food market clocks up US$5.3 billion of sales a year.

In another potentially significant market for colostrum, sports nutrition, global sales are around US$13.5 billion.

Just under a decade ago, colostrum was a waste product. If you had a sick horse, a folk remedy was to feed it a bucket of colostrum.

Otherwise, what the calves didn't get went down the drain. Farmers who let colostrum contaminate their milk were financially penalised.

Then, in the late 1980s, Lock, a recent dairy industry recruit, was charged with developing highly specialised products from milk components.

He'd had a varied career, starting at Hamilton's Ruakura Research Centre in the fuel crisis days with an MSc degree, trying to figure out how to make petrol from grass. A love of gas chromatography - separating substances into their components - led to more than six years at the Motunui synthetic fuel plant and finally to the dairy industry.

Lock eventually found himself at Dairy Group's Hautapu factory, near Cambridge, in charge of developing "nutraceuticals" - foods with particular health benefits.

He started looking at colostrum as a potential growth medium for scientific experiments. He had some made up and didn't sell a thing.

Around 1991, under orders to "make some money" he spied what he calls the "fruit, nut and flake industry" - the health food or supplement industry.

While it takes years of scientific experimentation and verifiable results to get a new pharmaceutical on the market, health foods were a very different story.

"You made a claim and word of mouth did the selling for you.

"You were selling anti-aging, beauty, wellness - sex, basically - and it was all multilevel, or direct or pyramid selling."

Tighter rules are closing the gaps now, but it was into this barely-regulated environment that colostrum first went.

There was some science to back claims. Better yet were personal testimonies, one in particular, from Kaye Wyatt, whose husband Doug co-founded American supplement marketer Symbiotics. She credits colostrum with saving her from a range of diseases she could not fight with an immune system destroyed in childhood.

Using Dairy Group colostrum, Symbiotics almost single-handedly created a US$15 million colostrum health food category in the US and Lock left Dairy Group to manage Symbiotics' New Zealand arm.

In 1996, 100 Dairy Group farmers produced 10 tonnes of powdered colostrum. Four years later, 1500 dairy farmers in the Waikato and Canterbury were being paid up to $1 a litre for nine million litres of the former waste product, which was processed into around 100 tonnes of powder fetching $50 a kg and up.

Last year, at the Chinese market's top end, colostrum powder was selling for $1 a gram, or $1000 a kg.

Patrick Geals, general manager of Fonterra Health and Nutritional Solutions, would love to get those prices.

In the multi-billion-dollar functional foods and supplements markets, Fonterra's turnover for all its nutraceuticals was $80 million last year.

It may have the best colostrum and be the single biggest supplier but at year's end, next month, revenue from colostrum will be just $7 million to $8 million.

"We're trying to move up the value chain with our products," Geals says. "Colostrum tablets sell for 20 times our selling price [for powder]. We want to capitalise on that value for Fonterra."

Next year the company hopes to have revenue of $15 million from colostrum and within three years $30 million.

Evidence that New Zealand's colostrum marketing has stuttered can be found in the number of farmers supplying it this season - just 500, down from 1500 four years ago.

But Geals expects up to 900 farmers will supply colostrum in the new dairy season, starting in June, earning them $168 a kg.

Lock, too, has had problems. He split with Symbiotics nearly three years ago and launched a new company, Functional Nutraceuticals, in August 2001.

The five-person company, including a Chinese-speaking paediatrician and a Spanish-speaking Uruguayan, formulates products for clients and provides technical support for clients here and in China, Korea, Britain, Europe, the US, and Central and South America.

The company sells under its own brand, Pure New Zealand Colostrum, and is about to launch a cosmetic range "inside out".

Lock has already attended a natural products expo in Asia this year and is heading to Amsterdam in June and Washington in October for others.

He says he has regained some clients lost in the split with Symbiotics with sales back to a pre-breakup $10 million a year.

"Our key message now is the science of the product. It did start with Symbiotics promoting awareness. Now we need to promote the science.

"We want to tell people what it is the colostrum does."

In the last decade claims for its benefits to humans have varied from increasing vitality and stamina and elevating mood, to destroying viruses, toxins and bacteria in our bodies, assisting in fat burning and building lean muscle mass.

Some have stood the test of closer scientific evaluation, others have not.

Of all the research done, the most well-established claim is that it improves our gastro-intestinal function.

By itself, colostrum is one of the only natural compounds that can repair, heal and modify our digestive tract or gut.

This is no small thing. As one researcher puts it; "healthy gut, healthy body".

The body of research has continued to grow. Trials have backed some early claims, explanations for some effects have been found elsewhere while others have been discounted altogether.

In reality, Lock has to share the parenting of colostrum, and not just with thousands of cows.

Other scientists and marketers have helped understand, promote and popularise a product now growing in worldwide demand.

It is certain, though, that this baby has only just begun to toddle.