June 21, 2024

 

Fonterra to open new application centre in Wuhan, China

 

 

Fonterra announced it will open its sixth application centre in China to meet growing demand as two sites at the heart of the dairy cooperative's Foodservice business celebrate their 10th anniversaries.

 

In 2014, Fonterra opened its Waitoa, New Zealand UHT manufacturing site, which specialises in producing high-value cream products sought after by Fonterra's Foodservice customers. 

 

In the same year, Fonterra opened its first-ever application centre in Shanghai, China, with the centres playing an important role in the Foodservice business by enabling the cooperative to partner with local customers and develop product applications designed to meet local consumer tastes and trends.   

 

Fonterra's latest application centre will be opened in Wuhan, China, later this year, with construction now underway. This application centre will add to those in Beijing, Chengdu, Guangzhou, Shanghai and Shenzhen.

 

Fonterra chief executive officer Miles Hurrell said Fonterra's Greater China Foodservice business is a key part of its value-add strategy, with the cream products produced at Waitoa UHT contributing strongly to this success.  

 

"The formula for our foodservice Whipping Cream was developed by our expert team at Fonterra's Research and Development Centre in Palmerston North (New Zealand) and is 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.  

 

"Our application centres play a pivotal role in driving innovation and tailoring Fonterra's Foodservice 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 and this will likely lead to further growth in demand for our foodservice cream products, which we are well set up to cater for." 

 

In FY 2023, Fonterra's Greater China Foodservice business reported $2.2 billion in revenue with gross margins of 17.9%.

Fonterra's CEO of Greater China, Teh-han Chow, said the high-quality product coupled with the local expertise the application centres provide gives Fonterra a competitive edge in China.

 

"While we already have a strong Foodservice business in China, we're looking to continue to grow," said Chow. "By working closely with customers to create product applications that help their businesses to thrive, we can all benefit from the opportunities the China market presents." 

 

Fonterra's Foodservice 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.

  

Fonterra's Foodservice business sells to businesses that cater for out of home consumption.  

The cooperative partners with Foodservice customers to test and develop products for their kitchens, using its network of Fonterra Application Centres (FACs) and professional chefs.  

- Fonterra