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.
With around 90% of its ingredients locally sourced, the fast-food giant spent $218 million with local suppliers last year to make burgers, sides, desserts, and breakfast items for its New Zealand stores.
A further $328 million of Kiwi produce was exported to McDonald’s other markets.
In a breakdown, released this month, the chain of restaurants revealed its $218 million spend went towards:
- 1 million litres of milk sourced from dairy farmers through Fonterra
- Close to 19 million kilograms of potato products purchased and consumed locally
- Over 107 million units of buns, muffins, rolls, and bagels purchased from ARYTZA in Wairau Valley
- 11 million free-range eggs were used in 2023, sourced from Otaika Valley and Zeagold Farms
- 7 million kilograms of cheese and other dairy products produced by Fonterra
- 6 million kilograms of beef were used locally for beef patties.
Kiwi-grown produce is also sent to McDonald’s markets including Australia, the Pacific Islands, Asia, and the United States.
Last year a total of 37 million kilograms of beef was exported globally to other McDonald’s markets.
Kylie Freeland, McDonald’s managing director NZ and Pacific Islands says the chain takes pride in offering its customers a menu where as many ingredients as possible are sourced locally.
“At Macca’s we talk about the ‘three-legged stool’ of the corporate, our franchisees and suppliers,” Freeland says.
“It’s a key strength of our business, and many of our supplier relationships go right back to when we first opened in New Zealand in 1976,” she concludes.
