Why Fonterra accepted defeat in the dairy aisle
OPINION: Fonterra's sale of its consumer dairy business to Lactalis is a clear sign of the co-operative’s failure to compete in the branded consumer market.
It will include 71 'hubs' throughout New Zealand within 25km from 90% of Fonterra farmers.
Farm Source combines service, support, rewards, digital technology and financial options for farmers together with local Farm Source hubs to support the major dairying regions throughout the country.
Speaking at today's launch in Methven, Fonterra chairman John Wilson said Farm Source's seed was discussions with farmers and the "together as one" principle behind cooperatives.
"We have been talking to our farmers a lot about what we can do to further support them and their businesses. We challenged ourselves to come up with ways we could get in behind them as only a co-operative of our strength can do.
"Co-ops have always been about unity and collective strength and we have a lot of both. This is about putting it to work for our farmers so we all benefit. With Farm Source we are taking our relationship with our farmers to a whole new level through connected services and support systems developed for them."
CEO Theo Spierings says Farm Source, like the cooperative, is "much stronger than the sum of its parts".
"It is not a programme or a collection of benefits. Farm Source is about connecting farmers with the full strength of our cooperative. Ultimately, we see Farm Source as setting the benchmark when it comes to supporting farmers and providing exclusive benefits beyond the Milk Price.
"Farm Source is an enabler for Fonterra's volume and value strategy because it is all about the milk. By supporting farmers to succeed and grow, the cooperative will also grow its milk pool in New Zealand which is core to the business.
"Farm Source is about working together to grow and succeed together and to reach our ambition of global relevance. We want to access a 30 billion litre global milk pool by 2025. Farm Source starts here in New Zealand. We will also look to adopt it in other markets where we are growing our milk pools, tailoring it for those local markets."
Farm Source was launched from the first Farm Source hub in Methven, a new community asset combining rural supplies retailing with a drop-in lounge for farmers, facilities such as meeting rooms and a home base for Fonterra's regional on-farm support team.
Wilson says with Fonterra having a presence in rural communities around the country, the Farm Source hubs could also be the home base for community groups.
"Our farmers are always active in their area, through sports clubs, local charities and service groups and through activity programmes for children. Farm Source hubs will have facilities where our farmers and their neighbours can come together. It all makes for stronger rural communities and families and that is good for everyone."
The Farm Source hub launch in Methven is part of a total initial Farm Source offering including:
• Seventy one Farm Source hubs, most of them within 25km of 90 per cent of Fonterra farms, will provide a home base for farmers in their local communities and a touch point for a regionally organised support team for farmers, including area managers, shareholders' councillors, sustainable dairy advisors, technical sales reps, vat assets team, food and safety advisors and local networkers.
• Farm Source rewards to bring down the cost of farm supplies and services.
• Farm Source $ to return loyal farmers a share of profits from Farm Source hubs.
• Farm Source farm supplies – in store and online with exclusive Fonterra farmer offers.
• Farm Source digital providing an easy online way for farmers to manage their business with the Co-op.
• Farm Source financial tools for managing shares, capital and business.
Coverage of today's launch in Methven will be broadcast on SKY channel 950 from 3.00pm and repeating on the hour every hour.
