Fonterra Expands in China with Sixth Application Centre
Source: The DairyNews
As Fonterra commemorates the 10th anniversaries of two pivotal sites in its Foodservice business, the dairy cooperative is set to broaden its reach in China by launching its sixth application centre, catering to the burgeoning demand.
In 2014, Fonterra inaugurated its Waitoa UHT manufacturing site in Waikato, renowned for producing premium cream products highly sought after by its Foodservice clientele. That same year marked the opening of Fonterra's inaugural application centre in Shanghai, a facility integral to its Foodservice operations. These centres allow Fonterra to collaborate closely with local customers, crafting product applications tailored to align with regional consumer preferences and trends.
The upcoming application centre in Wuhan, China, where construction is currently in progress, will join existing centres in Beijing, Chengdu, Guangzhou, Shanghai, and Shenzhen. This expansion underscores Fonterra’s commitment to enhancing its Foodservice business within Greater China, a key component of the cooperative's value-add strategy.
Miles Hurrell, CEO of Fonterra, emphasized the strategic importance of the Greater China Foodservice business. He noted that the whipping cream formula, developed at Fonterra’s Research and Development Centre in Palmerston North, has been instrumental in adding value to farmers' milk. This product is a staple in about 400 million beverages and 260 million cakes annually across Chinese bakeries, with demand steadily climbing since its introduction in 2014.
"Our application centres are crucial in fostering innovation and customizing our Foodservice offerings to the unique tastes, cultural nuances, and emerging trends of the regions they serve," said Mr. Hurrell. "They are equipped with diverse spaces and tools that allow our technical experts and seasoned chefs to experiment and devise new products, often in collaboration with our customers."
The new centre is expected to fuel further growth in Fonterra’s Greater China Foodservice operations, likely boosting demand for its cream products, which the company is well-equipped to supply.
In fiscal year 2023, Fonterra’s Greater China Foodservice business generated $2.2 billion in revenue, with gross margins of 17.9%.
Teh-han Chow, Fonterra’s CEO of Greater China, highlighted the competitive advantage provided by the high-quality products and localized expertise of the application centres. "Our robust Foodservice business in China is poised for further expansion," he stated. "By closely collaborating with our customers to develop applications that enhance their offerings, we can collectively leverage the vast opportunities presented by the Chinese market."
Fonterra’s Foodservice business is also experiencing growth in Southeast Asia, particularly in the bakery channel, driven by the rise of specialty bakeries and lifestyle cafes. Similar to its operations in China, Fonterra utilizes in-market chefs to help develop new local applications based on consumer demands.
The upcoming application centre in Wuhan, China, where construction is currently in progress, will join existing centres in Beijing, Chengdu, Guangzhou, Shanghai, and Shenzhen. This expansion underscores Fonterra’s commitment to enhancing its Foodservice business within Greater China, a key component of the cooperative's value-add strategy.
Miles Hurrell, CEO of Fonterra, emphasized the strategic importance of the Greater China Foodservice business. He noted that the whipping cream formula, developed at Fonterra’s Research and Development Centre in Palmerston North, has been instrumental in adding value to farmers' milk. This product is a staple in about 400 million beverages and 260 million cakes annually across Chinese bakeries, with demand steadily climbing since its introduction in 2014.
"Our application centres are crucial in fostering innovation and customizing our Foodservice offerings to the unique tastes, cultural nuances, and emerging trends of the regions they serve," said Mr. Hurrell. "They are equipped with diverse spaces and tools that allow our technical experts and seasoned chefs to experiment and devise new products, often in collaboration with our customers."
The new centre is expected to fuel further growth in Fonterra’s Greater China Foodservice operations, likely boosting demand for its cream products, which the company is well-equipped to supply.
In fiscal year 2023, Fonterra’s Greater China Foodservice business generated $2.2 billion in revenue, with gross margins of 17.9%.
Teh-han Chow, Fonterra’s CEO of Greater China, highlighted the competitive advantage provided by the high-quality products and localized expertise of the application centres. "Our robust Foodservice business in China is poised for further expansion," he stated. "By closely collaborating with our customers to develop applications that enhance their offerings, we can collectively leverage the vast opportunities presented by the Chinese market."
Fonterra’s Foodservice business is also experiencing growth in Southeast Asia, particularly in the bakery channel, driven by the rise of specialty bakeries and lifestyle cafes. Similar to its operations in China, Fonterra utilizes in-market chefs to help develop new local applications based on consumer demands.
