“We have developed a business case and agreed on a way forward, which includes establishing a corporate ventures arm with access to our dairy science and innovation expertise, combined with the agility of a start-up,” Mr Hurrell said.

The business would incubate and scale a portfolio of disruptive ventures by developing solutions that combined science, nutrition and technology “to make a real impact on human health”, he said.

The business — provisionally named Nutrition Science Solutions (NSS) — will operate as a standalone business within Fonterra with its own board and chief executive.

It would target opportunities for value creation by adapting the co-operative’s existing capabilities and assets, alongside new disruptive capabilities, through partnerships and M&A.

“NSS will seek out, partner with and invest in global start-ups who will benefit from access to Fonterra’s dairy science expertise and understanding of the global market, while Fonterra will benefit from access to emerging technologies, advancements in science and novel channels to market.”

As part of the announcement, Fonterra has disclosed its first investment through the new ventures arm — $US10 million ($NZ16.4 million) for a minority shareholding in Pendulum, a biotech company pioneering the next frontier of metabolic health.

The growth-stage San Francisco-based company specialises in targeting metabolic health through evidence-based microbiome solutions.

The partnership will see Pendulum and Fonterra establish a presence in global markets, co-develop and commercialise next-generation microbiome products that are scientifically formulated to make measurable improvements to people’s health.