Editorial: Could Fonterra still be our national champion?

Fonterra has given up its fruitless - and under-capitalised - quest for global dairy domination and consumer brand name fame. Photo/Grant Bradley

For man carrying the weight of only slightly fewer Kiwi expectations than All Black coach Steve Hansen, Fonterra newbie chief executive Miles Hurrell is looking remarkably relaxed.

Let's hope his positivity about a new strategy to turn round a juggernaut that's wandered way off course is well-founded, and not, as some cynics would have it, more smoke and mirrors from a company trying to deflect attention from some horrendous FY19 financial results.

The signs however are promising.

Hurrell himself in his unflashy Kiwi way inspires confidence and the strategy, devoid of the spin and empty slogans of the previous regime, is like all the best plans, simple.

It's main message is when you're out of your depth and drowning, don't be looking for a mega tanker to pull you out - a plain old manoeuverable dingy will do just fine.

Mercifully Fonterra's given up its fruitless - and under-capitalised - quest for global dairy domination and consumer brand name fame.

It will settle for being a Kiwi battler from downunder, doing what it is extremely good at, which is turning New Zealand's top quality, pasture-grown milk into superior ingredients for the world's discerning food manufacturers and pharma and nutraceutical companies.

In line with a new "less is more" approach to business, it's scaling back its pursuit of the consumer brand dollar, though will continue to look for opportunities to present its ingredients in a retail wrapper for the added-value margin.

It will still be in the consumer product business but will narrow its focus to Asia Pacific markets.

Perhaps the best news for New Zealanders - farmers and urbanites - is that New Zealand milk is once again king.

Dropped is Fonterra's aim to be one of the world's biggest dairy exporters, collecting more and more milk from "milk pools" it established through debt-funded growth in order to retain its claim of supplying 30 per cent of global dairy markets.

Fonterra no longer wants to be known as a dairy giant.

Nor does it want to own outright all activities in its orbit. We're told to expect more partnerships in intellectual property and research and development activities and for Fonterra to look deeper into its own world-leading protein science cupboard for breakthroughs to commercialise.

Fonterra CEO Miles Hurrell inspires confidence and the strategy. Photo/Dean Purcell

The signs are also good for an end to the culture of excess that has so infuriated Kiwis about Fonterra. Global staff have been trimmed by more than one thousand and Hurrell has signalled more job cuts are ahead at management level.

The future of 70 jobs at specialist Paraparaumu cheese producer Kapiti are on the line with plans to move the operation to Taranaki, but there are no plans yet to cut factory jobs in the dairy heartlands.

The 2019 year annual report reveals Hurrell was paid $2.2m. That's a far cry from the package his predecessor received. Theo Spierings last year took home a final payment of $4.6m. This followed two consecutive annual payments of more than $8m.

Also promising is Fonterra's undertaking to run a conservative balance sheet and to show "respect for capital" - something sorely lacking for a while for Fonterra's farmer-owners, who have witnessed more than $4 billion of wealth destruction in the past two years.