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.
Mozzarella production is resuming in Australia, at the co-op’s new cheese plant in Stanhope, northern Victoria; the plant will be officially opened on Friday.
Fonterra Australia managing director René Dedoncker says China, particularly, has strong demand for the cheese, which tops at least half the pizzas made there.
“In China, the growth in Western-style foodservice outlets has meant more opportunities for Chinese people to try cheese and many are developing a taste for it, particularly on pizza. The market potential is enormous,” says Dedoncker.
Farmers Jared and Courtney Ireland run a 450-cow dairy farm in the rural town of Lockington in northern Victoria. Their fresh milk is supplied to Fonterra’s Stanhope plant and will be used to make mozzarella for China.
Courtney says he enjoys seeing his milk going to high-value mozzarella for China.
“My family loves eating pizza... and we can tell our children our farm’s milk goes into making mozzarella for pizzas in China.
“Stanhope’s new cheese plant coming online gives us confidence in a strong, sustainable future for dairy in Australia.”
About 40% of people in urban China now eat at Western-style fast food outlets once a week, and the use of dairy in foodservice has grown 30% in five years.
“As disposable incomes rise in China, spending on dining out is growing, and pizza is a popular menu choice.
“This supports our strategy to be Fonterra’s global ingredients hub for cheese, whey and nutritionals, complementing our consumer and foodservice businesses.
“This helps us move our farmers’ milk up the value chain into higher-value dairy products, which means sustainable returns for everyone in the supply chain, starting at the farm gate.”
