EN 中文 DE FR عربى

Fonterra Expands in China with Sixth Food Application Centre

New Zealand 04.10.2024
Source: DairyNews.today
983 EN 中文 DE FR عربى
Fonterra has strengthened its presence in China’s foodservice sector with the launch of its sixth food application centre (FAC), aiming to meet the growing demand for innovative dairy-based solutions from foodservice customers. The latest facility, strategically located in Wuhan, enables Fonterra to service 50 cities within a three-hour radius, covering a region that generates 20% of China's GDP.
Fonterra Expands in China with Sixth Food Application Centre
The FACs are central to Fonterra’s customer-centric strategy, with around 50 chefs across China working in fully equipped kitchens to collaborate with clients in the bakery, beverage, and dining sectors. “FACs are a place where we co-create with our customers,” said Justin Dai, Fonterra’s Vice-President for Foodservice, Greater China, adding that the centres facilitate the development of new recipes using Fonterra’s Anchor-branded products, including cream, butter, and mozzarella.

China’s foodservice sector, despite headwinds from a sluggish economy, has proven resilient, particularly in the bakery channel. The country is home to around 350,000 bakeries, a number that has remained steady with new stores replacing those closing down. This market presents significant opportunities for Fonterra, whose foodservice business in Greater China saw its EBIT rise by $100 million year-on-year, contributing to an overall return on capital of 19.6% for the division.

Dai attributes this success to Fonterra’s innovative approach, strong customer focus, and the high quality of its New Zealand-sourced dairy products. Fonterra’s ability to adapt to China’s rapidly evolving market conditions has helped it maintain a leading position, particularly in Tier 1 and Tier 2 cities like Shanghai and Beijing, while expanding its reach into lower-tier cities.

Fonterra’s digital innovations are also playing a crucial role in maintaining its competitive edge. The company recently launched a smartphone app that provides customers with recipes, market insights, and links to the most suitable Fonterra products for specific dishes. This integration of digital tools with customer engagement further cements Fonterra’s position as a leading supplier in China’s foodservice sector.

Dai also highlighted the strong endorsement Fonterra received from the Chinese government earlier this year when Chinese Premier Li Qiang met with New Zealand Prime Minister Christopher Luxon at Fonterra’s Auckland office, reinforcing the cooperative’s positive trade relations with China. “Trade is our friend,” said Dai, emphasizing the smooth and robust trade between the two countries.

As Fonterra continues to leverage its Anchor brand and invest in customer-focused capabilities like the FACs, the company is well-positioned to capitalize on the growing demand for dairy products in China’s dynamic and fragmented market.

Calendar