Fonterra Expands Cheese Production in Eltham to Meet Global Demand
Fonterra's Eltham site in Taranaki, New Zealand, is undergoing significant upgrades to its processed cheese production lines. This investment is part of Fonterra's strategy to enhance its global impact by meeting the growing demand for dairy products from international clients, including McDonald's.
The upgrade, announced in August 2025, will increase the production capacity of slice-on-slice (SOS) cheese. The improvements include a new grinder, blender, cooker, and two new cheese grinders for the SOS lines. The commissioning of these upgraded lines is expected to be complete by February 2026.
Additionally, the Eltham site is expanding its capacity for Individually Quick Frozen Mozzarella (IQF). This expansion aims to increase the site's volume by approximately 7,000 metric tons by June 2026. This increase will enable the co-op to supply enough cheese for more than 40 million pizzas annually.
The Eltham site has a long history of supplying McDonald's with cheese, and in 2023, it provided millions of kilograms of cheese to McDonald's globally. In New Zealand alone, McDonald's uses approximately 1.7 million kilograms of Fonterra's cheese annually.
Eltham's cheese is featured in McDonald's new Big Arch burger, launched in Australia in July and in New Zealand in October 2023. The burger includes three slices of cheddar cheese from Eltham, highlighting the quality and consistency of Fonterra's dairy products.
The Eltham site is a major employer in South Taranaki, with around 400 employees. The site's expansion is not only significant for global foodservice but also for the local dairy farming community, which supplies the milk transformed into cheese for international markets.
