Fonterra Strengthens Supply Chain in Thailand Amid Growing Dairy Market
Source: DairyNews.today
Fonterra, New Zealand’s dairy cooperative, is reaping the benefits of enhanced supply chain management in Thailand, delivering stronger returns for its farmer shareholders, according to Montien “Joe” Boonpiemsak, Fonterra’s Thailand Consumer & Foodservice Operations Director.
In his role for 18 months, Boonpiemsak has overseen initiatives that have boosted efficiency, including a 40% improvement in forecast accuracy and a 28% reduction in product lead times. “Supply operations are the custodians of the business, ensuring quality products reach customers at the right time, while remaining lean,” Boonpiemsak said, emphasizing the importance of integrated planning in achieving these milestones.
Thailand’s Growing Dairy Opportunity
The Thai dairy market, valued at $780 million annually in export earnings for New Zealand, presents significant potential due to a rising middle class and an ageing population. Fonterra’s dominance in Thailand’s ingredients sector has been a key driver, contributing to a global return on capital of 10.2% in FY2024.
Thailand is Fonterra’s largest ingredients market in Southeast Asia, with a unique model: importing Fonterra products, processing and re-packaging them, and re-exporting across ASEAN countries. This makes Thailand the region’s largest dairy exporter, despite traditionally low domestic dairy consumption.
Fonterra’s products also benefit from Thailand’s nationwide school milk program, which consumes half of the milk produced by the country’s 800,000 cows.
Expanding Product Reach
Convenience stores play a pivotal role in Fonterra’s strategy, as the number of stores has more than doubled to over 15,000 in the last 14 years. Ready-to-eat products featuring Fonterra ingredients, such as heat-and-eat curries, cheesecakes, and pre-packaged sandwiches, have seen robust demand.
Fonterra’s Anlene brand is making strides in the consumer market, driven by campaigns targeting Thailand’s ageing population. With the population over 65 expected to double to 30% by 2040, Anlene has focused on promoting the benefits of early dairy consumption. Sales of its UHT liquid product, the most popular format in Thailand, have surged, with Anlene reaching record market share in the past six months.
Foodservice Sector Gains
Fonterra has also secured advances in the foodservice sector, partnering with major brands like KFC to supply specialized cooking creams. Globally, Fonterra’s foodservice business earned $1.8 billion in FY2024, with a 29% margin.
The company continues to innovate, incorporating cheese into local Thai dishes, leveraging insights from other markets such as South Korea. “Our chef team here is exploring how to integrate cheese into traditional recipes,” Boonpiemsak noted.
With an eye on market expansion and operational efficiency, Fonterra aims to solidify its leadership position in Thailand’s evolving dairy landscape, bolstered by demographic trends and a growing appetite for dairy-based products.
Thailand’s Growing Dairy Opportunity
The Thai dairy market, valued at $780 million annually in export earnings for New Zealand, presents significant potential due to a rising middle class and an ageing population. Fonterra’s dominance in Thailand’s ingredients sector has been a key driver, contributing to a global return on capital of 10.2% in FY2024.
Thailand is Fonterra’s largest ingredients market in Southeast Asia, with a unique model: importing Fonterra products, processing and re-packaging them, and re-exporting across ASEAN countries. This makes Thailand the region’s largest dairy exporter, despite traditionally low domestic dairy consumption.
Fonterra’s products also benefit from Thailand’s nationwide school milk program, which consumes half of the milk produced by the country’s 800,000 cows.
Expanding Product Reach
Convenience stores play a pivotal role in Fonterra’s strategy, as the number of stores has more than doubled to over 15,000 in the last 14 years. Ready-to-eat products featuring Fonterra ingredients, such as heat-and-eat curries, cheesecakes, and pre-packaged sandwiches, have seen robust demand.
Fonterra’s Anlene brand is making strides in the consumer market, driven by campaigns targeting Thailand’s ageing population. With the population over 65 expected to double to 30% by 2040, Anlene has focused on promoting the benefits of early dairy consumption. Sales of its UHT liquid product, the most popular format in Thailand, have surged, with Anlene reaching record market share in the past six months.
Foodservice Sector Gains
Fonterra has also secured advances in the foodservice sector, partnering with major brands like KFC to supply specialized cooking creams. Globally, Fonterra’s foodservice business earned $1.8 billion in FY2024, with a 29% margin.
The company continues to innovate, incorporating cheese into local Thai dishes, leveraging insights from other markets such as South Korea. “Our chef team here is exploring how to integrate cheese into traditional recipes,” Boonpiemsak noted.
With an eye on market expansion and operational efficiency, Fonterra aims to solidify its leadership position in Thailand’s evolving dairy landscape, bolstered by demographic trends and a growing appetite for dairy-based products.
