Fonterra has participated in several of the business missions
led by the Prime Minister to Asia this year.
These missions provide a way to raise New Zealand’s profile in key markets and are a valuable platform for New Zealand businesses, including Fonterra, to connect with customers, clients, and each other.
They are an opportunity to showcase work already under way, as well as develop new relationships and understand evolving market trends in this dynamic region.
In Malaysia, our food service team hosted the business delegation to a pop-up showcase of our Anchor Food Professional customer channels, including a bakery, street food, a pizzeria, and a local coffee house.
The delegation was able to see first-hand how we are partnering with customers to adapt the goodness of New Zealand dairy to suit local preferences, and how our recent announcement of the $150 million expansion of our Edendale cream plant will support future growth in our food service business across Asia.
Our sustainability credentials and the role of dairy as a source of high-quality nutrition are an important part of our value proposition with key customers.
In South Korea, I was pleased to sign a Memorandum of Understanding (MOU) with one of Korea’s largest food conglomerates, witnessed by the Prime Minister, signalling our intention to partner on emission reductions and innovation in products that support health and wellbeing.
Japan
Japan has long been a highly valued export market for New Zealand dairy and a strong protein ingredients market.
Any visitor to Japan who steps into a 7-Eleven store has a good chance of finding protein-fortified drinks and yoghurts containing Fonterra farmers’ milk.
It would seem in the eyes of the consumer, the more protein that can be included in a product, the better.
Research shows Japanese consumers are willing to pay a premium of up to 50% for products that have added health and nutrition benefits, and with one in three people in Japan estimated to be over 65 years old by 2030, there’s an increasing appetite for products that support wellbeing and mobility, and combat cognitive decline.
Fonterra is well-placed to meet this growing demand. Our proteins are designed to help people maintain muscle mass for a better quality of life, our dairy lipids help to improve mood and our probiotics support immunity and digestion.
We see North Asia as a growth market for high-value proteins.
The recently announced expansion of our Studholme site will allow us to increase production of such high-value products and ultimately grow returns to farmers.
Southeast Asia
Southeast Asia is shaping up as the next growth market for Fonterra’s food service business outside of China. Growth over the last three years in the region has been underpinned by a strong return of tourism in the region.
The Co-op’s food service business in Southeast Asia is focused on bringing New Zealand dairy to everyday staples. Beyond pizzas and pasta, our dairy goes into egg tarts in Thailand, banh mi in Vietnam, ube jam in the Philippines and local crepes in Indonesia. We’ve seen growth in the bakery channel too, with the rise of specialty bakery and lifestyle cafes across the region.
We are leaning into the hyper-convenience trends, in particular in Thailand, with our dairy ingredients going into ready-to-eat and ready-to-drink foods as they increase in popularity. These products made by our customers are sold in Seven-Eleven stores throughout the country.
Malaysia
Fonterra has a thriving food service business in Asia where demand is growing by integrating dairy into traditional foods such as laksa and milk tea. In Malaysia, Fonterra is looking to build on solid foundations where half of New Zealand exports to the country are already dairy. The recently announced UHT cream expansion at our Edendale site will help support this growth opportunity.
Philippines
Fonterra is a market leader for food service in the Philippines and the number one choice in butter, milk, cheese, and UHT cream. Our food service products are used by thousands of bakeries, beverage houses, hotels, restaurants, caterers and industrial kitchens across the Philippines.
Cheese consumption in the Philippines is increasing due to growing consumer awareness and preferences for cheese-based dishes and snacks. This provides a promising growth opportunity for our ingredients brand NZMP, as cheese already represents a large portion of our business in the country.
