As two sites at the heart of Fonterra’s food service business celebrate their 10th anniversary, the Co-operative has announced opening its sixth application centre to meet growing demand.
In 2014, Fonterra opened its Waitoa UHT manufacturing site, specialising in producing high-value cream products that Fonterra’s Food Service customers sought. In the same year, it opened its first-ever application centre in Shanghai.
The centres have played an essential role in the Co-op’s food service business, enabling Fonterra to partner with local customers and develop product applications that meet local consumer tastes and trends.
Fonterra has confirmed it will open its sixth application centre in China later this year in Wuhan. Construction is now underway. This centre will join those in Beijing, Chengdu, Guangzhou, Shanghai, and Shenzhen.
CEO Miles Hurrell said Fonterra’s Greater China Foodservice business has been a vital part of the Co-op’s value-added strategy, with the cream products produced at Waitoa UHT contributing enormously to this success.
"Our expert team at Fonterra's Research and Development Centre in Palmerston North developed the formula for our food service whipping cream, an excellent example of how we use innovation to add value to farmers’ milk,” said Hurrell.
“This product alone is used in approximately 400 million beverages and 260 million cakes in Chinese bakery stores each year, and we’ve seen a continued increase in demand since 2014.
He added that these application centres played a pivotal role in driving innovation and tailoring Fonterra’s food service offerings to the tastes, culture and trends of the area in which they’re located.
They include different spaces and equipment to enable technical experts and experienced chefs to test and develop new products, often in collaboration with customers.
“The addition of a new application centre in China signals the continued growth we expect to see from our Greater China Foodservice business. This will likely lead to further growth in demand for our food service cream products, which we are well set up to cater to.”
In FY23, Fonterra’s Greater China Foodservice business reported $2.2 billion in revenue with gross margins of 17.9 percent.
Fonterra’s CEO of Greater China, Teh-han Chow, also mentioned that the application centres' high-quality products and local expertise provided Fonterra a competitive edge in China.
“While we already have a strong food service business in China, we’re looking to continue to grow. By working closely with customers to create product applications that help their businesses to thrive, we can all benefit from the opportunities the Chinese market presents.”
Fonterra’s food service business is also growing in Southeast Asia, particularly in the bakery channel, with the emergence of specialty bakery and lifestyle cafes across the region. Like China, in-market chefs assist the team in developing new local applications based on consumer needs.
