Aurivo has made its first move into the field of infant nutrition with the launch of a new range of 'growing-up' milk powder formulations aimed at boosting profit margins for the western co-op by 20pc.
The dairy processor has traditionally focused on butter production, but in the last month has delivered its first consignment of growing-up milks (GUMs) to two European customers.
It follows the purchase by the co-op of the UK's leading ready-to-drink sports nutrition brand For Goodness Shakes for a reported €28m in 2015.
While the co-op does not currently supply any of the raw ingredients for this product, the move sees it replicating the highly profitable investments that Glanbia, Carbery and Kerry have made into fast-growing foreign brands. In the two years since purchasing the brand, Aurivo has expanded it into the Netherlands, Germany, Denmark, Estonia and the United Arab Emirates.
As a result, sales increased by 18pc in revenue terms and 40pc in volume terms in 2016.
"We're already selling enriched milk powder to 40 countries around the world, but many of them are oil- dependent nations whose purchasing power is highly dependent on the price of a barrel of oil," said Aurivo CEO Aaron Forde.
"These products get us a foot in the door of markets and customers that would not normally be interested in talking to us about our other products.
"We've been dabbling in the GUMs for the last two years and we're hopeful that up to 10pc of our protein powders can end up being used by customers with established brands in this field."
The GUMs business-to-business product is expected to return profits as much as 20pc higher than traditional products such as butter, liquid milk and enriched milk powders.
"When we bought Donegal Creameries' milk processing and agristores in 2012, it was a big bet on the Irish market at a time when it might not have been that fashionable," said Mr Forde. "The purchase of For Goodness Shakes and this GUMs business sees us looking for growth outside of Ireland and refocusing on international markets again."
The co-op is also poised to launch a lactose-free milk product on the Irish market in 2017 and is continuing with an €8m upgrade and refurbishment programme at its plants in Killygordon in Co Donegal and Ballaghaderreen in Co Roscommon.