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.
The two-stage project at the Darfield site in Canterbury will see the first plant completed in 2018 with a second to follow within two years.
The two new plants will incorporate Fonterra-first technology that will allow the firmness and consistency of the cream cheese they produce to be dialled up or down to meet customer preference.
Justice Minister and Selwyn MP Amy Adams and Selwyn mayor Sam Broughton joined Fonterra management and staff in turning the first sod for the new build this month.
Adams says Fonterra’s investment is great news for Selwyn and for the Canterbury region.
“It will create jobs during construction and operation and is an excellent example of how New Zealand companies are shifting to value-added products and using innovation to tap into emerging markets.”
Once the project is complete, Fonterra Darfield will be among the largest producers of cream cheese in NZ alongside the Te Rapa site.
Fonterra chief operating officer global operations, Robert Spurway, says Canterbury is fast becoming the co-op’s foodservice capital of NZ with nearly $500m investment in this category over the past three years.
“Globally, the foodservice industry is growing around 6% every year. Expansions such as these... have helped Fonterra’s foodservice business triple that figure over recent years. This puts us well on track to achieve our targets of 20% year-on-year growth in foodservice sales.”
Fonterra’s director of global foodservice, Grant Watson, says rising demand for cheese, butter and UHT goes with changing consumption patterns.
Particularly as people in China's big cities shift away from oils, they want more dairy in their cooking, as a table spread or in a glass, says Watson.
“In markets like China, where dairy hasn’t traditionally been a staple, there are fewer pre-conceived notions on how it should be eaten, and with that we’re seeing versatility in their dairy applications.
“Arguably some of the most innovative dairy product development anywhere in the world is happening now in China. Our Anchor Food Professionals team, engaging with customers, is playing an integral role."
The dairy beverage tea macchiato, which mixes tea with cream and cream cheese, shows a willingness to be bolder in dairy use, says Watson.
Creaming Asia’s appetite
Phase one – CC3
- $100 million upgrade
- Completed by August 2018
- Similar scale to the new cream cheese plants recently built at Te Rapa
- Up to 24,000t of cream cheese each year for export
- Introduces innovative technology
- At least 30 new jobs
- Up to 1000 roles in the construction, planning and fit-out in a wide range of industries
Phase two – CC4
- $50 million upgrade
- Completed by 2019 -20 depending on market demand
- Producing up to 24,000t each year for export
- More staff will be confirmed closer to construction.
