fbpx
Print this page
Thursday, 14 November 2019 08:55

Synlait’s foray into supermarkets

Written by  Sudesh Kissun
Dairyworks cheese company is being bought by Synlait. Dairyworks cheese company is being bought by Synlait.

Canterbury processor Synlait is boosting its presence on New Zealand supermarket shelves.

The company is forking out $112 million for Christchurch-based Dairyworks, a major cheese player which also exports to Australia.

The acquisition gives Synlait a bigger platform on the domestic dairy market to compete with the two major players Fonterra and Goodman Fielder.

A Synlait spokeswoman says the company is eyeing cheese and liquid milk categories in NZ as part of its Everyday Dairy strategy.

“Synlait has no intention of becoming a dairy trader,” she told Dairy News.

“Our objective is to participate in selective categories of the New Zealand everyday dairy market: cheese is one of these, alongside liquid milk.

“The acquisition allows us to continue to get closer to consumers, a key part of our long-term strategy.”

Once approved by the Overseas Investment Office (OIO), the Dairyworks deal will give Synlait a foothold in the domestic market.

Dairyworks holds 47% market share of NZ cheese sales with its Dairyworks and private labels brands. It holds number two position in butter (25%), number four in ice cream (9%) and number four in milk powder (19%).

Synlait will now have butter brands competing with butter made by Fonterra, Westland and Goodman Fielder.

In the cheese market, it will go head to head with Goodman Fielder (Chesdale and Puhoi Valley) and Fonterra (Anchor and Mainland).

While Synlait has no branded consumer products of its own, it recently bought Temuka-based Talbot Forest Cheese this year. Some Talbot Forest products are sold in supermarkets.

Synlait chief executive Leon Clement says buying Dairyworks is an exciting opportunity. 

“This business is a great strategic fit for us and an important step in growing our presence in the Everyday Dairy category,” says Clement, who headed Fonterra’s brands business in NZ before joining Synlait last year.

“Dairyworks is a nimble and innovative company. It will fit well with Synlait and provides us with an opportunity to keep optimising our value chain while giving access into Australia where Dairyworks presence is growing.”

He says opportunities exist in both businesses to streamline supply chains and lift competitiveness. 

“It gives us the ability to optimise how we process milk solids and get the most value from our supply of milk. 

“We’re excited by this opportunity as we work to capture more value in the dairy market in New Zealand and globally.”

Dairyworks will operate as a stand-alone business under the Synlait umbrella, with its chief executive Tim Carter reporting to Clement.

Dairyworks doesn’t process milk: it buys cream from several local sources to make ice cream, Synlait told Dairy News.

The company says Dairyworks has established channels across the NZ grocery network, including the two major supermarket chains.  

It has a growing relationship with Australian supermarket giant Woolworths, the owners of Countdown, and strategic customers in NZ food service and restaurants.

“Should the purchase of Dairyworks be approved by the OIO, Synlait intends to continue to support the Dairyworks strategy, which includes Australia,” the company said.

More like this

Synlait's milk price drop

Canterbury milk processor Synlait has reduced its 2019-20 forecast base milk price by 20c to $7.05/kgMS.

Synlait Milk concerned with Covid-19 

Independent milk processor Synlait says Covid-19 has so far had no impact on its financial performance, however the processor remains greatly concerned.

Featured

 

Limited feed puts ewes at risk

Severe feed shortages in parts of the country mean many ewes are on a nutritional knife-edge heading into lambing and could be at risk of developing metabolic disorders.

Jack’s unique solution

Jason Jack was left with severe spinal injuries after a wakeboarding accident when he was 29, but that hasn’t stopped him getting out and about in difficult environments.

National

$10 payout!

A small but select group of Fonterra farmers are on the cusp of setting a new milk payout record.

The migrant workers dilemma

Dairy farmers want more Kiwi workers, but they also want relaxed immigration restrictions. So, what's the problem?

Producing milk, the Miraka way

The goal of Māori-owned dairy company Miraka, near Taupo, is to become the most sustainable dairy company in the world.

Machinery & Products

Landpower invests in cow central

One of Australasia’s largest, privately-owned farm machinery distributors, Landpower is building a new $10 million complex adjacent to Hamilton Airport.

Maize moisture in a moment

With forage maize playing such an important part of the New Zealand fodder supply chain, a useful hand-held moisture measuring…