Fonterra Suppliers Confident in Mainland Dairy Future
Fonterra's 460 milk suppliers in Australia, who will switch to Lactalis end of this month, are unfazed with the impending change.
Chief executive Miles Hurrell says it has been in talks with farmers on the need to introduce such a target, which will aim to reduce emissions behind the farmgate.
“As we work towards our ambition to be a leader in sustainability, we have stepped up our emissions reduction goal for the operational side of our business, introducing a target of a 50% absolute reduction in Scope 1&2 emissions by 2030, from a 2018 baseline, an increase on our previous target of a 30% reduction by 2030,” Hurrell says.
“We have held discussions with our farmers on why we need to introduce a Scope 3, or on-farm emissions target, and plan to announce our target before the end of calendar year 2023.”
The co-op had initially planned to release its Scope 3 target in June.
However, timing is important, says Hurrell.
"We acknowledge that farmers have been under a lot of pressure right now. With this in mind, we decided to delay introducing a Scope 3 target by a few months."
Fonterra released its long-term strategy in September 2021. Hurrell says since then, the co-op has made good progress towards its 2030 goals.
“Across FY23, we completed the divestment of China Farms and Soprole as part of our strategic choice to focus on New Zealand milk.
“We’re also progressing work in our innovation portfolio, including establishing our joint venture with Royal DSM, Vivici, which is exploring commercial opportunities in fermentation derived ingredients, and launching our corporate ventures arm Nutrition Science Solution (NSS), which made its first strategic investment in the form of a minority stake in Pendulum Inc, a biotech company specialising in metabolic health.
“To assist us to hit our short and long-term goals, we are implementing a range of projects that will streamline how we operate. To track our progress, we have introduced two new metrics.”
These are:
- Cash operating expenses per kgMS – targeting a 4% cash operating cost improvement per year to support long-term discipline in our global overheads.
- Gross profit from core operations per kgMS – targeting a 2% New Zealand operational cash cost improvement every year to support efficient New Zealand operations while remaining laser focused on delivering value.
“We are also updating our long-term strategy and plan to share this early next year,” says Hurrell.
