Fonterra making a global name for itself

Sanjay Khosla wants Fonterra's name to be synonymous with dairy products. Picture / Richard Robinson

Fonterra has embarked on one of the biggest marketing missions ever attempted by a New Zealand company.

It plans to turn its corporate moniker into a household name.

If it is successful, Fonterra will become an internationally recognised consumer logo, a brand to rival Nestle or Coca-Cola.

It's a daunting challenge but Sanjay Khosla - the Indian-born managing director of Fonterra Brands - sees no reason why the name can't someday be the first brand consumers think of when they think of dairy products.

"The message is simple," he says. "Fonterra equals dairy."

The first step was taken last month with the launch of a new Fonterra logo, a softer, more consumer friendly version of the corporate banner. Beginning in the next few weeks, key brands in Asian markets - such as Anchor milk powder - will have the logo added to their packaging.

The move will bring Fonterra in line with its biggest rivals, which put their corporate logos on everything.

Khosla says the change is driven by the growing desire of consumers to see trusted corporations backing the products they buy.

Although Fonterra has several internationally successful dairy brands, it is largely unknown at a consumer level.

Khosla admitted he'd never heard of Fonterra before he was approached about working for it.

But, after one year with the company, he says he has been blown away by its strength, its understanding of dairy and the depth of feeling staff have for their work. Now it's time to lever that strength with consumers.

"It's such a beautiful name," Khosla says.

Fonterra - a Latin construct - was concocted largely because it didn't clash with any other corporate trademarks. It means "fountain of the earth".

Khosla has an impressive global reputation for breathing new life into brands. He spent 27 years working for food industry giant Unilever and is widely credited with turning the once-tired Lipton tea brand into a market leader.

He says there is no "big bang" to Fonterra's strategy but that it does represent quite a profound change.

The introduction of the new Fonterra logo will be a soft one. To minimise the cost of the project, packaging will be revamped only as and when it is due for an upgrade.

Khosla is not averse to using marketing jargon when describing his wider vision. Words like "interdependence" and "synergy" might not have too much currency with Fonterra's 12,000 farmer shareholders, but he has had no trouble selling his vision down on the farm.

At farmer meetings in dairying strongholds such as Matamata, the reaction has been positive.

That's partly because the strategy includes a plan to dramatically reduce the number of international brands that Fonterra is carrying.

Before Khosla started at Fonterra, it had 133 consumer brands. His mission is to weed out the non-performers and focus resources on "power brands".

"If you can't make money with the brand, either you fix it or you sell it," he says. "We apply ruthless commercial rigour."

As it becomes clear which brands are the strongest, the plan is to "put our money where our mouth is".

The resources - advertising and promotions budgets and staff - are then put behind those brands to further boost performance.

Khosla says he has no set target for how many brands Fonterra should be carrying.

"The direction of travel is clear. The pace and scale will be reassessed every quarter."

Khosla says he and his team have learned from what other corporations have done in similar exercises.

Companies that have gone into this kind of process with a target number and an aggressive approach tend to find that brand reduction becomes a target in itself, he said.

"Of course, the target should be growing the business and making money."

Brand vision

The Fonterra logo will be added to all the company's consumer products.

The aim is to leverage Fonterra's strong reputation in dairy and give the corporate name a consumer presence.

The stable of brands will be dramatically culled.

Resources will then be shifted to further enhance those "power brands" that are already profitable.