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Current as of 24/04/17 07:40PM NZST
Jamie Gray is a business reporter for the NZ Herald

From Auckland to Azerbaijan, Anchor stretches around the globe

The Anchor brand is a household name in New Zealand, but it is also up there with the worlds' biggest brands on the international stage.
The Anchor brand is a household name in New Zealand, but it is also up there with the worlds' biggest brands on the international stage.

Anchor butter is a familiar sight on New Zealand supermarket shelves, but in far-flung Azerbaijan, they are eating it too.

The difference is that in the former Soviet republic, consumers are more inclined to take their appreciation for the product to extremes.

As Fonterra's global chief marketing officer Andy Dasgupta tells it, consumers in the central Asian country have refined their tastes to the point where they can tell which factory their Anchor butter came from, and have become adept at identifying the source by reading the barcodes on the packet.

"Our butter in Azerbaijan is so popular that even if we change the source - in other words the factory where it comes from - the consumer can pick it up," he says.

Dasgupta uses the Azerbaijan experience as an example of the kind of "star" quality that the brand - which turns 130 next month - has in the 85 or so countries where it is sold.

Fonterra remains a largely commodities player, but the value-added side of the business is catching up: in its latest result, Fonterra's consumer and food service's normalised earnings before interest and tax came to $580 million in 2015/16, up 42 per cent from a year earlier.

Dasgupta says that while the Anchor brand is a household name in New Zealand, it is also up there with the worlds' biggest brands on the international stage.

Fonterra chief marketing offier Andy Dasgupta. Photo / Doug Sherring
Fonterra chief marketing offier Andy Dasgupta. Photo / Doug Sherring

"Overall, in the consumer brands business within Fonterra, we believe that value added dairy is the way to go, that we are going to be driving future sustainable growth because that kind of safeguards us against things like commodities price trends," he says.

"In that context, the brands business is very important for us."

With that in mind, he says Anchor is important - alone worth about $3 billion in sales and Dasgupta sees that doubling within seven to 10 years.

Anchor has picked up two Cannes Lion awards - the marketing and advertising world's version of the Oscars. In Asia, the brand has won seven Spikes awards in the past year.

"There are only handful of food and beverage brands globally that are worth more than a couple of billion dollars a year and Anchor is one of them," says Dasgupta.

"It is a massive brand and we are doing a lot of work in this area to build more value to the brand beyond what it stands for - beyond just a bottle of milk."

Fonterra is taking a three-pronged approach towards growing the brand - first through what it calls everyday "vitality" products such as milk and yogurt.

Then there is children's nutrition, followed by culinary - butter, cheese and cream.
"I keep telling people that we are just kissing the tip of the iceberg ," Dasgupta says.

"This brand has the potential to become the game-changer in dairy globally if we leverage the New Zealand provenance story in the right way."

"We are leveraging our expertise in dairy - the science that we know of and everything else - and if we can then create the right connection with our consumers - the sky is the limit."

In Sri Lanka - one of Fonterra's key markets - Anchor is a bigger brand than Coca Cola. At a recent public re-launch for the Anchor brand, 150,000 people turned up. "That's the kind of equity and that's the kind of pull that Anchor has in a marketplace like Sri Lanka," says Dasgupta.

Fonterra is rapidly creating scale in China with Anchor in e-commerce, where its UHT milk is ranked at number two. While Anchor is the star performer, Fonterra also has big ambitions for Anlene, for adult nutrition, and Anmum, for paediatric nutrition, both of which are already well-established in Asia.

Born in India and now based in Singapore, Dasgupta is not your standard high-flying executive. He is an accomplished pianist (grade 8) and an avid petrolhead, having participated in various rallies in India. He also writes music and has his own recording studio at home.

While at University in Calcutta, Dasgupta supplemented his income by writing advertising jingles. He has founded a breast cancer foundation - focused on the Indian subcontinent - after the disease claimed the life of his wife Tanushree in 2009.

Dasgupta came to Fonterra from Pepsico, where he is credited for doubling the Pepsi foods business in Asia, and growing the Pepsi non-carbonated beverages business by more than 40 per cent in two years.

In the big picture, he sees the global food business evolving in three different ways.

First, he expects themes of affordable nutrition in the poorer countries to play a big part in the way the world develops.

Second, he sees a trend to what he calls "premiumisation" - in which companies are placing more emphasis on "superiority" claims and packaging.

Dasgupta says the third trend will be more emphasis on what he calls "crafted" foods being on offer- in a similar way to what has happened in the beer industry.

In other words, a lot more food will be tailored to individual consumer tastes.

"That means the competition in this space is less likely to come from Nestles and Danones of this world - but the baker on the other side of town."

- NZ Herald

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