1 ROCK MUSIC Captions by Faith Hamblyn. www.able.co.nz Captions were made possible with funding from NZ On Air. Copyright Able 2016. Hello, and welcome to Rural Delivery. The Primary Growth Partnership programme has been the catalyst for a number of projects around the country involving science-driven solutions for primary sector applications. This week we find out about groundbreaking fingerprinting technology developed by Fonterra, involving light analysis and sophisticated computing that's set to add more value to milk. We visit an expanding aquaculture operation in Northland breeding and producing NZ paua for export. And we spend some time with Joe Babich to learn about the 100-year history of his family wine business, Babich Wines. A focus on transforming the dairy value chain within the Primary Growth Partnership programme has led to a project that's set to deliver not only a huge amount of information about milk, but savings on time and testing costs as well. Dr Jeremy Hill is Chief Science and Technology Officer at Fonterra. He's also currently president of the International Dairy Federation. We've got some of the most advanced milk testing in the world, but it's still quite limited compared to the potential components you could analyse in milk. 'With that information, we have the ability to far better tailor our products that we manufacture, 'and in doing so, create more value from that milk.' Milk is milk, but, you know, there are literally dozens of different types of proteins in milk and actually thousands of different types of milk fat, for example. We started working on this about three or four years ago. It's quite a difficult thing to achieve. And over recent years, we've developed this technology through the Primary Growth Partnership initiative that we have with Dairy NZ and the NZ government. Every day, Milk Test NZ are testing the milk from, oh, 13,000 farms. Now, for Fonterra we have, uh, about 10,000 farms, and every day, their milk is tested here. The safety and the quality of our rural milk is absolutely essentially for Fonterra, so that's our primary purpose for that testing. The components that are incredibly important for us obviously are the fat and the protein within the milk. We look at total bacteria. We also check that there's no inhibitory residues in the milk. We look at a variety of tests just to be very clear that that milk is of high microbial and compositional quality. Farmers are getting that suite of core test results back every day, cos that's helping them to understand the quality of their milk and what they might need to change to continue to produce very high-quality milk. There is also other tests that are available to them. For example, if they wanted to better understand the urea concentration in their milk ` that sort of thing ` they can request those tests themselves. And the composition of the milk across the season is absolutely fascinating. Uh, I mean, if you're sitting looking at your milk in the morning as you tip it on to your cereal, you think it all looks pretty much the same, but interestingly enough, I mean, there are subtle changes right across the season. We use an RFID tag to mark that sample right at the farm, and then that RFID tag stays with the sample right through this laboratory. So we're very very confident on our traceability. We've embarked on quite a long-term research project to come out with what we're calling milk fingerprinting. How this works, in essence, is we shine light through the milk, and some of that light is absorbed by the milk and the different components in the milk, and some of it is not. You get a picture of it that we're calling a fingerprint. The fingerprint is completely unique to that sample. So while there'll be similarities from day to day on that farm, it is indeed a unique sample, a unique fingerprint every day. This is really useful because it gives us a whole new level of information about that milk that we didn't have before, and we get it almost instantaneously. We can look at that milk, understand it much better, and then use it slightly differently in our processing. We have a really interesting component in our milk that shows up late in the season, particularly if we have a drought. It's an interesting component. It's not a problem for most of our products, but for some of our newer, higher-value products, it's a little bit challenging with the processing. So we're monitoring that, uh, through the season, particularly late in the season. And the test to monitor that, we have a result for every farm within two minutes for that. Now, if we were sending that off to the traditional laboratory, not only would it be costing us literally tens of millions of dollars to get that information, but we would have to wait three days, by which time we've already processed that milk. Once we've collected all the data using milk fingerprinting, we can then, using that analysis ` and actually, it's some sophisticated software and, um, mathematics that we do on the analysis that enables us to then tailor that particular milk to a manufacturing process and a particular type of product. What milk fingerprinting lets us do is to look at the trends over a number of days, and then use our dynamic tanker-scheduling programmes that we operate for all of our, uh, tanker collections across NZ to then go to the farms that are producing those particular characteristics. And, you know, quite frankly, it's impossible to do this... or was impossible to do this using other, um, standard, classical approaches to analysis. We do, of course, already collect milk from certain farms, such as organics, to produce certain product lines. This is taking it a few steps further in saying if we want to produce a particular type of milk ` and what we're doing already and there's a premium opportunity for is in branded UHT milk in China ` to be in that market, you absolutely need consistent quality across the season. And by using milk fingerprinting and understanding a lot about the detailed characteristics of milk, the processing requirements of UHT and the product requirements of UHT, we can match that milk to those products. Milk fingerprinting is about premiums. It's about making the most out of every drop of milk. So rather than, um, just, you know, taking milk that is great for a particular product and then basically averaging that across all different types of products, we can tailor that milk to the product that is best suited to its characteristics, and therefore make the most premium products we can, sell those for the most premium prices we can and provide those returns back to our farmer shareholders. 'As we get a better understanding of how the milk characteristics change with the farming practices, 'with the changes that occur on a farm, linking those to our processing requirements,' linking those to our product requirements, we'll be able to provide information back to the farmers that'll enable them to optimise, potentially, the production of that milk, to increase the profitability of that milk in their vat. We're not talking about, at this point, individual premiums for individual farmers. That might be a potential application that we could use this milk-fingerprinting technology for in the future, quite frankly, but what it does do at the moment is allows us to optimise the whole system. I've been in science within Fonterra now for approximately 30 years, and it would be no exaggeration to say this is one of the most game-changing pieces of science and technology I've seen, I think we've been involved in. Um, we're scraping the surface at the moment, quite frankly. The potential of this technology long-term is fantastic, because what we will be able to do is take the vast amount of information we collect in our processing sites, so that's our processing characteristics, all of the information we collect in market, the information that we're collecting on farm about all of the farming data, and link that through milk-fingerprinting technology, so understanding how those fingerprints relate to that processing data, to the product characteristics and to the farming practices. When we return, we visit a Northland paua farm that's going from strength to strength. 1 ROCK MUSIC Welcome back. In 2002, a Northland company known as OceaNZ Blue was devising innovative and affordable technologies to produce paua on a commercial scale. 14 years on, it remains a growing aquaculture venture. The company is now streamlining their environmentally friendly operation and marketing their unique and colourful paua to the world under the brand of Moana NZ. We grow approximately 80 ton to 100 ton a year, and it is exported around the world to Europe, Asia, America and a lot sold domestically on the market here. The factory here was built in 2002 and is currently under the ownership of Aotearoa Fisheries Ltd, which is a business which is owned by all 57 iwi in NZ. And it sits within the aquaculture division of Aotearoa Fisheries Ltd. 'There are other farms producing abalone around the world, but there are no others in NZ. 'We are unique that we are the only ones in the world farming this species.' We're positioning ourselves at the premium end of the market. These paua, because they don't fight in nature against the currents, are the most tender product that you will try. We all have heard a lot of stories about the native paua, how they're tough and you may have to tenderise them before you cook them; these, because they grow ` they know that lunchtime is at 12 o'clock, they get fed, they're not fighting that current ` are very tender. So first and foremost, we're putting our line in the sand based upon our product quality and its taste, followed by and backed up with our environmental accreditation. The reason that it has the blue shell on the outside is the water's filtered, and none of the creatures that usually grow on the shell get through and can establish. So we have that unique blue, and that is why we in the marketplace call ourselves NZ Blue Abalone. We have to be very careful with our water quality, our husbandry and those sorts of things. But we believe in the market, we're producing a product that is environmentally friendly. It is, um, relatively affordable. And it is a good, healthy protein. Ryan and his team spend a lot of time meeting those regulatory hoops, but there are markets that we can only get access to or we can actually sell product in because we have these accreditations. To get a paua to grow, you need to have the optimum conditions they like to live in, which is where us being a land-based facility has given us a bit of control over those areas. So we've gotta try and control the temperature. Uh, we've gotta try and control the water quality; uh, try and control the food that's coming through; uh, the flow rate that's going past; there's the pH of the water; uh, there's the dissolved oxygen in the water ` you've gotta get all those factors just right for a paua to grow, or effectively what they'll do is they'll just put themselves on pause and they'll stay the same size and never grow, which doesn't work for us in the long run. We share a site here with NIWA. They were actually really helpful when we first started out in 2002. It was a great idea to start a paua farm; the next question was, how do we do it? And so we had to do a lot of research and looking into seeing what our guys like, and that's where NIWA were able to give us a good step up. And also they had all the filtration and stuff, which we able to piggyback off until we were good to go on our own. The water's coming from the bay, which is about 200m that way. So it gets brought in through the large pipes that used to be connected to an old power station that was here. We bring in our water from 20m down. It then gets filtered and UV'd, so any nasties in the water are killed before going out into our paua. And then on the outgoing, they're also filtered and UV'd again, so the water's going out just as clean as it was coming in. We're in the brood room here, which is where we hold all of our best stock that shows the traits that we're looking for. Uh, so we've got our fastest growers; our highest meat yields; uh, the best shell colour. And what we can do from there is we can pick which ones to spawn from and get the crosses that we want, so that we get the best-growing paua that we can on the farm. We've come up with systems that can control the environment that our brood stock grow in. We can have them spawn throughout the year, which gives us a constant supply of production; rather than naturally, a paua will spawn one time a year, and then there'll be a whole lot coming through. So we've gotta work to control the light sources, the feed, feeding them different seaweeds just to get that go in our development as good as possible. And then we take them into our hatchery room, where we get them to spawn. With the parents that we have spawning, we're able to pick and choose from each parent and take the best traits from them and cross them with who we think we would get the best growers out of and take it from there. In the nursery is where we have v-tanks. And what they're used to do is to wean our juvenile paua from what they naturally feed on, which is the algaes and the diatoms in the wild, to our artificial feed. And so those tanks are designed to give us as much surface area as possible to work with, so that they can, when they're hungry, the artificial feed is there, but if they're not big enough to start eating it, there is algae there for them to eat as well. Once our paua have grown big enough to leave the nursery, they get put out into what we call our grow-out sheds, which is a large array of different tubs and tanks that we put our paua into when they're about 15 mil. And we spend the next three years growing them out to marketable size of 75 mil to 85 mil. Uh, during that time as they grow, we've gotta thin them out and put them into different tanks and grade them into different sizes so that the bigger ones aren't competing with the smaller ones and give them as best chance as possible to grow. And then once they're grown to their marketable size, they're then put to sleep, and they're taken down to the packhouse or the processing room so that they can either be frozen or live shipped to anywhere in the world. What we use to put them to sleep at the moment is Epsom salts, or bath salts, as they're more commonly known. And while it feels good for us in a bath, it actually puts paua to sleep on the farm. We'll be back soon to take a tour around the Henderson vineyard and operation of Babich Wines. 1 ROCK MUSIC Hello again. Josip Babich emigrated from Croatia in 1910 to join his family, digging for kauri gum in the Far North of NZ. Not long after, he relocated to the foothills of the Waitakere Ranges to plant grapes, producing his first wine in 1916. The family business continues today, with the company now owning vineyards in Marlborough and Hawke's Bay, as well as the original Henderson block. We're in our Henderson vineyard, in the Chardonnay block. This vineyard is very small, but the point is, it might be small in tonnage, but it means a lot to us, because it's our home block. This is where we grew up, and it's the heart and soul of the business. It's the winery here, Babich Rd, and this vineyard's part of it. Apart from this vineyard here, the company owns vineyards in Hawke's Bay. We have four properties in Hawke's Bay, uh, but latterly, the major expansion has been in Marlborough. When we first started to expand, because in the early years ` now, I'm talking the 1960s ` we used to buy all the fruit from the Auckland region, but then the demand started to outstrip the supply, and we went to Gisborne. And so for quite few years, we bought grapes from Gisborne, and then that led to Hawke's Bay. And then when we looked at Gisborne and Hawke's Bay, we decided that Hawke's Bay probably offered more, was probably a better region, more stable in terms of the climate. And so we invested in vineyards in Hawke's Bay. The move to Blenheim was prompted by the popularity of Sauvignon Blanc. So we decided to get a couple of growers to grow for us, which we did. And so we had our first Sauvignon Blanc in 1991. Uh, those growers are still with us. Um, then as... the demand increased,... we had difficulties in getting the growers that we needed. So we decided to invest into vineyards there, and so we invested in our first vineyard in 1998 in the Awatere Valley. In 2013, ready for the 2014 vintage, we constructed our own winery. We had been a shareholder in a joint venture winery for 12 years previous to that, but we sold out, and now we have our own plant. At heart, I'm a winemaker. And, of course, the older I get, I realise the absolute importance of the vineyards. The overriding philosophy to us is that wine is made in the vineyard, and then the winemaker improves it, enhances it. He can't actually put things there that aren't there. The NZ Winegrowers have set up a sustainable viticultural system, which you have to abide by if you want to export your wine, and so all our vineyards are sustainably registered, and they're audited once a year. On top of that, we've started off with a BioGro, um, certified organic vineyard at our headquarters vineyard in Blenheim. And, um, we started off with 5ha, and now over the years we've increased that to 70ha. It's a movement that's grown worldwide. I think it's something that you'd need to treat with a degree of caution. I wouldn't just rush in. For instance, I would not try to do the organic protocols here in the Auckland region, where the humidity's too high. It would be too difficult. So I picked the vineyard, and I picked the region. There is certainly an interest in the organic wines, but that's not what driving us. I mean, we're driven basically by the belief that it's better for the environment to minimise the input of the chemicals, and that's what's driving us. And in fact, we don't actually really sell all the wine that we produce organically as organic wine. It started a long time ago ` we've been in business for a hundred years ` and probably for a third of that time, it was probably fighting off the creditors, trying not to go bankrupt and trying to exist. Then there was probably a... a 30-year period of slow and steady expansion. And then over the last 30 years, probably a more rapid expansion. Well, it's certainly perseverance, ability to work hard. We as a family have been very focused and very dedicated on` on building the business over a long period of time. But having said that, it's just been our way of life. I mean, it's something we enjoy. We enjoy the product, we enjoy the viticulture, and, um, I suppose the business growth has come with it. The industry, as such, has been quite fortunate in that the Sauvignon Blanc grown in NZ, and particularly in Marlborough, is very very distinctive. So I think in a world sense, it gives us a competitive advantage. And it's a competitive advantage over other Sauvignon Blancs ` the consumers recognise the difference. But they don't only recognise the difference; they like the difference. The other varieties are good too, but the Sauvignon Blanc is what's driven us. And I think that we make it at the right price, see. So internationally, we compete. We're not competing at the low end of the market; we're competing in the sort of more expensive end of the market, but the wines do stand scrutiny. The industry certainly has become more corporatised ` uh, there's no doubt about that. Um, but now, in our business, um... My father was a winemaker ` I would say that the place would never have been for sale. My brother and I have had exactly the same ` we've followed on. Now, it then becomes the next generation. And we're fortunate enough that the next generation have the interest too. And while there's interest from, uh, the next generation ` interest and expertise, you have to have both ` interest and expertise, well, then the business is not for sale. We're selling to about 40 countries in the world. You're probably more likely to find our wine on a list in New York than you are in Auckland City, actually. I'm enormously proud. I mean, I... I get more kick out of seeing a wine on a wine list in London or New York or Hong Kong than winning a gold medal at a wine competition. I mean, I just like the fact that you're on that list and consumers are buying that wine and enjoying it. For more information on these and other stories we've brought you, visit our website. You can get there via tvnz.co.nz Or if you've missed an episode, you can watch it again on TVNZ On Demand with the keyword Rural Delivery. Next week ` find out about the ongoing search for ever more efficient, effective and sustainable fertilisers at Fertco. We hear a young horticulturist explain what was behind his decision to forge a career in the horticulture sector. And we find out about the association between particular species of trees and mushrooms and how a Nelson family is building a business based on those relationships. Thanks for watching. We hope to see you again next time. Captions by Faith Hamblyn. www.able.co.nz Captions were made possible with funding from NZ On Air. Copyright Able 2016.