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.
The co-op has launched Daily Fresh milk in 14 stores in two major cities – Shanghai and Suzhou.
The milk, sold in 750mL bottles, is sourced directly from Fonterra’s farm hub in Hebei province.
The bottles carry labels matching each day of the week to emphasise freshness, with stock being replenished overnight ready for each new day.
Initial volumes are about three tonnes daily, with plans to scale-up over time and expand with the retailer as it rapidly expends store numbers across China.
Fonterra has partnered with Hema Fresh, Alibaba’s new retail concept which combines bricks-and-mortar and digital shopping.
The president of Fonterra Greater China, Christina Zhu, said the new product meets growing domestic demand for higher-quality fresh products, as part of the ‘premiumisation’ of China’s consumer categories.
“Shoppers here in China are becoming increasingly sophisticated in their tastes and preferences, driven by rising household incomes,” said Zhu.
