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Australian Dairy Nutritionals to supply plant-based infant formula powders under new Sprout Organic contract

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By Imelda Cotton - 
Australian Dairy Nutritionals ASX AHF Manufacturing Agreement Sprout Organic
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Australian Dairy Nutritionals (ASX: AHF) has won a contract to manufacture intermediate and fortified plant-based milk powders for use in Sprout Organic’s infant formula products.

The non-exclusive agreement has an initial term of 12 months, with an option to extend for a further two years.

While Australian Dairy Nutritionals doesn’t expect it to be financially material immediately, the deal presents a strategic growth opportunity for both businesses.

Strategic partner

Australian Dairy Nutritionals chief executive officer Mahi Sundaranathan said the Sprout agreement established a key strategic partner for the company as it continues to build momentum with its infant formula processing volumes.

“We are excited to have Sprout Organic sourcing its plant-based powder from us to manufacture quality infant formula products,” he said.

“We have a small-batch drying capability which we believe will be well suited to the company’s needs.”

Good fit with Sprout

Sprout Organic chief executive officer Selasi Berdie said the new partnership was a good fit for the company he founded in 2019.

“Working with an Australian-owned and operated manufacturer such as Australian Dairy Nutritionals is a great strategic alignment for us,” he said.

“The company’s agility and innovative nature, while maintaining stringent organic standards, made it a clear manufacturing partner for Sprout.”

Nutritional dairy powders

Australian Dairy Nutritionals operates organic-certified pastures near Victoria’s Great Ocean Road and processes milk into nutritional dairy powders at a purpose-built facility at Camperdown, engaging in contract work for third-party customers and producing its own certified organic A2 protein infant formula under the Ocean Road Dairies brand.

The company signed a similar manufacturing agreement in September with Australian-based company Nutura Organic that will see it make intermediate and fortified plant-based milk powder for incorporation into Nutura’s product range and distribution to customers in Australia, Vietnam and China.

Nutura chief executive officer Jeremy Okraglik said the strategic collaboration would drive innovation and propel the development of world-class products manufactured in Victoria.