Fonterra Cooperative Group needs to show a strong outlook for investors to regain confidence in the world's biggest dairy exporter, who will be disappointed with its weak earnings, says John Shewan, who chairs the Fonterra Shareholders' Fund's manager.

The fund gives outside investors exposure to Fonterra's earnings but fell out of favour as the milk processor dumped its final dividend and warned profit could miss guidance for 25-30 cents per share.

Fonterra blamed the downgrade on its settlement with Danone, its Beingmate writedown, and skinnier margins across all of its units, however an inability to generate larger returns from more than $850 million of investment expanding its production capacity has annoyed some investors in the fund.

"The very disappointing results have obviously led to a loss of investor confidence and as a consequence of that, some investor interest. I think that's clear," Shewan told BusinessDesk.

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"The bottom line is that Fonterra does a number of things really, really well and a number of things have not gone well and that's been acknowledged and the question now is what are the plans to turn some of those things around," he said.

Shewan wouldn't be drawn on what he thinks Fonterra needs to do but said he was keen to see what new chair John Monaghan and interim chief executive Miles Hurrell have to say.

The units last traded at $4.99, having dropped 22 per cent so far this year, and are below the $5.50 price sold at in the 2012 initial public offering.

"Up until this point, the Fonterra Shareholder Fund's experience has been appallingly bad for unit holders," said Oyvinn Rimer, a senior research analyst at Harbour Asset Management.

He said any future plans announced tomorrow will be key, but noted that the new chair and CEO may be constrained in what they can say, given that a review is under way at Fonterra itself and against the backdrop of the government's review of the Dairy Industry Restructuring Act.

They "originally said that all cards are on the table, so we could see some meaningful changes in terms of the strategic direction of the company but we don't know," said Rimer.

Under the current DIRA provisions, Fonterra has to accept milk from all-comers and must supply raw milk to rivals at a regulated price. The legislation is currently being reviewed and the government expects to receive a report early next year with legislation tabled in parliament in 2019.

According to Fonterra, DIRA was to promote competition and give farmers choices, but today New Zealand farmers can choose from about 10 independent processors, only five of which are New Zealand-owned. As a result, it should be revamped.

Mark Lister, head of private research at Craigs Investment Partners, said "they have definitely fallen out of favour with a lot of investors and they are going to need to work hard to win back that confidence and prove to the investment community they will be able to make the changes they need too and deliver some earnings and dividend growth."

In July, Craigs Investment Partners dropped the Fonterra Shareholders' Fund from its New Zealand equities portfolio, saying its performance has been "lacklustre at best".

"If you are trying to get a piece of the NZ Inc branded dairy story into China, then Synlait and A2 seem to be running their businesses a lot better and they have certainly been able to deliver where Fonterra hasn't," said Lister.

Investors tomorrow will be particularly keen to see any commentary around the China strategy as well as the push into value-add as it struggles to move away from a pure commodity play.

Other board changes are also afoot, as Zespri chair Peter McBride, Te Ohu Kaimoana chair Jamie Tuuta, and Seeka director Ashley Waugh have been put forward as three candidates for election to Fonterra's board. They were approved by an independent selection panel.