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.
Although Fonterra’s butter is known by Middle East consumers for its golden appearance, because of grass fed cows, a niche group of manufacturers prefer white butter as a processing ingredient for their food products.
These Middle Eastern food manufacturers have traditionally used butter from grain fed cows, a product with a pale colour.
Fonterra’s dairy foods category director of NZMP, Casey Thomas, says Fonterra developed the white butter by a process that reduces its golden appearance without affecting its quality.
“We saw an opportunity to tap into this new area for customers to use it in applications such as spreadable jar cheese, recombined cream cheese, and it could soon be used in ice cream.” NZMP general manager of Middle East and Africa, Santiago Aon said, “This is already seeing strong results. Our customers have had positive feedback about the white butter; it is performing to our expectations.”
With the co-op’s R&D centre, NZMP is behind the new product; both have a history of partnering with customers to create business solutions with them.
The product is now available in Saudi Arabia, Iran, Bahrain, Turkey and Pakistan. It may be launched in Egypt, Algeria, Morocco and South America.
