Fonterra is marking the 10th anniversary since it set up the backbone of its China foodservice operations – and has announced plans to continue its expansion in the region.
The New Zealand dairy major’ Greater China Foodservice division opened its first manufacturing and application sites in 2014 and expects to see continued growth in demand for its foodservice cream products.
In its full year accounts for 2023, the division recorded NZ$2.2bn in revenue and improved its gross margins to 17.9% at a time when the disruptive effects from COVID-19 were still being felt.
Since 2019, the dairy major has continuously sold more milk solids in its foodservice channel than in either the consumer or active living channels, with foodservice recording a steady yearly growth. In Greater China specifically, the foodservice channel recorded a 103% increase in profits after tax to NZ$203m in 2023.
The business is a key part of the co-op’s value-add strategy and its cream products made in the Waikato region are contributing strongly to this, the company claims.
Fonterra’s Greater China Foodservice division now operates five application centers, with sixth set to open later this year in Wuhan, chief executive Miles Hurrell confirmed.
BOX “While we already have a strong Foodservice 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 China market presents.” BOX
Hurrell said that the co-op’s foodservice whipping cream is used in around 400 million beverages and 260 million cakes in Chinese bakery stores each year. The co-op has experienced a continued increase in demand since 2014, he added.
Waitoa UHT as the whipping cream production site is called, employs more than 200 staff today, growing from 80 in 2014.
The new application center will be located in Wuhan and construction is now underway. Fonterra also operates application hubs in Beijing, Chengdu, Guangzhou, Shanghai and Shenzhen.