Chefs help Fonterra carve out $3b global business

Anchor Food Professionals (AFP), has 55 chefs working alongside global customers in their kitchens to match their needs with the co-op's dairy innovation expertise.

For example, in China, over the past 12 months the AFP team has introduced more than 100 new applications for the beverage and dining channel and demonstrated 170 new applications for bakery customers.

The co-op hopes innovation and new products are key to future growth and will help it build relationships with up to 40,000 new customers over the next five years and up to 70,000 new customers in the next 10 years.

Fonterra's director global foodservice Paul Harvey says the AFP team delivers solution in the kitchen of customers.

"To offer solutions we need to know what the problem is, and in many cases the issues are in the kitchen, and that's where we are spending much more time with our customers who want our help," says Harvey.

"We now have 55 chefs around the world who go into kitchens like this where they also help their customers design new innovative products to address their problems."

All new products require an intimate understanding of the science behind the application in order to deliver the right functionality and performance for customers' requirements. Fonterra' Research and Development Centre (FRDC) in Palmerston North plays a pivotal role in bringing these products to life.

"Our FRDC team works closely with out chefs in our application centres and with our in-country sales and marketing people around the world, where they refine some of these innovations for a customer's specific need - often in response to new food trends," says Harvey.

In Greater China, Fonterra plans to continue building on its success in the foodservice channel by expanding deeper into the larger cities. In South East Asia, it is applying what it has learnt from its Greater China business to customers in the region.

"In South East Asia, dairy is seen as a premium food and it also has a strong link to the growth in the consumption of western foods," says Harvey.

"We are making the most of this growing demand in the region and in particular we are doubling down on Indonesia and Malaysia where the evolution of bakeries will see us expanding our reach into more cities.

"We are also developing new products that work well in recipes chefs can use in the growing number of on-line bakery stores. In other markets like the USA, where tariff barriers make it more difficult to maximise value from our foodservice channel, we partner with our IP, like we have with one of America's dairy co-operatives, Land O'Lakes," Harvey says.

Fonterra's Foodservice business started forming in 2013 with the Anchor Food Professionals brand introduced in 2014.

Innovative, Top Quality Products

Fonterra chief executive Miles Hurrell says the success is down to the co-op's strong connection to customers wh value its sustainably produced, high-quality, nutritious milk and innovative products.

"It's really pleasing to see this milestone be reached despite the impact of Covid-19 on restaurants and other out-of-home eating.

"Our people have worked hard to find new ways of working with customers and new product applications to suit the pandemic environment, and we can see this has been a success."

Foodservice is a high value channel for Fonterra farmers' milk and a key part of its long-term strategy.

The co-operative is aiming to increase milk solids into foodservice by approximately 50% by 2030 and grow its presence across further markets including Greater China, South East Asia and the USA.

Hurrell says to support the co-op's growth to 2030, it intends to invest about $1 billion in moving milk into higher value products and increase R&D budget by 50%.