Fonterra's Emissions Targets Unaffected by Government's ETS Decision, Says CEO Miles Hurrell
Source: The DairyNews
The government's decision to exclude agriculture from the Emissions Trading Scheme (ETS) until at least 2030 will not impact Fonterra's Scope 3 emissions targets, according to chief executive Miles Hurrell.
These targets, driven by customer and consumer demands, aim for a 30% reduction in on-farm emissions intensity by 2030, using 2018 as the baseline. "The removal of the ETS backstop provides some clarity for farmers," Hurrell remarked. "However, our position remains unchanged as it is market-driven."
Announced late last year, the targets are still in the early stages, but farmer-shareholders are beginning to understand that they are customer-driven, Hurrell stated at Fieldays. He also expressed interest in the government's review of New Zealand's genetic engineering and modification policies, noting its potential contribution to achieving the 30% target. "We are open-minded and see benefits for our farmer shareholders," he added.
The regulation of genetic engineering ranked second in the top 10 priorities in KPMG's annual Agribusiness Agenda, unveiled at Fieldays.
Hurrell also provided an update on Fonterra's recent strategic shift, announced a month ago. The cooperative has been engaging with farmer-shareholders across New Zealand to gather feedback and address questions. "Economically, farmers understand that the three key channels – consumer, food service, and ingredients – traditionally yield lower returns on capital," Hurrell explained. Despite emotional attachment to certain brands, he noted general support for the economic rationale behind the strategy.
Interest from other businesses in purchasing the brands has been significant, and Fonterra is in the process of appointing advisers. Hurrell emphasized that this is the beginning of a 12-18 month process.
The strategy shift will have minimal impact on Fonterra's research and development (R&D), with most efforts already focused on the business-to-business (B2B) market, including advanced nutrition, active living, and medical nutrition. "True R&D in New Zealand is dedicated to understanding science and enhancing products for active living, healthy aging, and medical nutrition, particularly in foodservice applications like creams and cheeses," he said.
Fonterra's Nutiani brand, launched in 2022, exemplifies this focus. It utilizes Fonterra ingredients in consumer brands sold in pharmaceuticals, hospitals, and sports and active lifestyle products. "Nutiani is a strong B2B brand, not widely recognized by consumers," Hurrell noted.
Responding to criticism that the strategy shift might not add value to dairy products, Hurrell asserted, "Anything above the commodity milk price adds value. While the consumer segment does add value, we believe there is greater value in concentrating on our B2B brands."
Fonterra remains committed to driving long-term value through its focus on foodservice and ingredients, leveraging its strong R&D foundation to support business growth and innovation in the dairy sector.
Announced late last year, the targets are still in the early stages, but farmer-shareholders are beginning to understand that they are customer-driven, Hurrell stated at Fieldays. He also expressed interest in the government's review of New Zealand's genetic engineering and modification policies, noting its potential contribution to achieving the 30% target. "We are open-minded and see benefits for our farmer shareholders," he added.
The regulation of genetic engineering ranked second in the top 10 priorities in KPMG's annual Agribusiness Agenda, unveiled at Fieldays.
Hurrell also provided an update on Fonterra's recent strategic shift, announced a month ago. The cooperative has been engaging with farmer-shareholders across New Zealand to gather feedback and address questions. "Economically, farmers understand that the three key channels – consumer, food service, and ingredients – traditionally yield lower returns on capital," Hurrell explained. Despite emotional attachment to certain brands, he noted general support for the economic rationale behind the strategy.
Interest from other businesses in purchasing the brands has been significant, and Fonterra is in the process of appointing advisers. Hurrell emphasized that this is the beginning of a 12-18 month process.
The strategy shift will have minimal impact on Fonterra's research and development (R&D), with most efforts already focused on the business-to-business (B2B) market, including advanced nutrition, active living, and medical nutrition. "True R&D in New Zealand is dedicated to understanding science and enhancing products for active living, healthy aging, and medical nutrition, particularly in foodservice applications like creams and cheeses," he said.
Fonterra's Nutiani brand, launched in 2022, exemplifies this focus. It utilizes Fonterra ingredients in consumer brands sold in pharmaceuticals, hospitals, and sports and active lifestyle products. "Nutiani is a strong B2B brand, not widely recognized by consumers," Hurrell noted.
Responding to criticism that the strategy shift might not add value to dairy products, Hurrell asserted, "Anything above the commodity milk price adds value. While the consumer segment does add value, we believe there is greater value in concentrating on our B2B brands."
Fonterra remains committed to driving long-term value through its focus on foodservice and ingredients, leveraging its strong R&D foundation to support business growth and innovation in the dairy sector.
