Our group strategy aims to grow volumes and value by focusing on emerging markets and products that meet growing consumer demand for dairy nutrition. Our seven key strategic paths are:
Our strategy refresh
With global demand for dairy continuing to grow we need to make the most of the opportunities available to Fonterra. We are taking decisive steps to meet nutritional needs in some of the world’s most exciting growth markets and continue driving better returns for our New Zealand farmer shareholders.
1. Optimise New Zealand Milk+
New Zealand milk will always be our number one priority so we need to keep this business humming. We have projects underway to improve the way we use our manufacturing plant and supply chain assets in New Zealand and drive efficiencies.
We also want to:
Access better information about demand so we can improve our product mix, and increase our focus on key products and markets, streamline our processes and increase the agility of our supply chain.
Link more of our business to GlobalDairyTrade and add more value for customers so we achieve prices over and above GDT.
2. Build And Grow Beyond Our Current Consumer Positions+
Together, our consumer businesses contribute around half our profit. We have great brands and strong positions in Australia and New Zealand, in Asia and Latin America. We want to sell more branded nutrition to consumers and grow sales volumes by pushing into new markets, with new products. We will protect and build on our leadership positions in Australia-New Zealand and invest in the key emerging markets in Asia, Latin America, the Middle East and North Africa.
3. Deliver On Our Foodservice Potential+
Our foodservice business operates in 50 countries and generates more than NZ$1 billion in sales per year. With demand rising for meals out-of-home, we want to:
Drive our quick service restaurant business harder, and
Sell more higher-margin products to chefs in the emerging markets of China, South East Asia, the Middle East/North Africa and Latin America.
4. Grow Our Position In Mobility+
Our Anlene bone health brand is the leading high calcium milk in Asia, with more than 60 per cent of the market. Bone health is just part of the picture – people need flexible joints and healthy muscles to stay mobile and active. With rapidly ageing populations in the west and China, we want to focus our innovation to extend the Anlene brand and develop new mobility solutions for our ingredients customers, especially in China.
5. Develop Leading Positions In Paediatrics And Maternal Nutrition+
Paediatric nutrition is the fastest-growing dairy category in the world. We are already a leading manufacturer of ingredients for multinational infant nutrition companies. We want to build on this and also manufacture ingredients for leading Chinese infant nutrition companies, using our New Zealand milk and factories. We will also continue to extend our Anmum brand to provide trusted nutrition for mothers and children across South East Asia and within China. Our innovation teams will support this business with focused research on milks for brain development and immunity.
6. Selectively Invest In Milk Pools+
While New Zealand milk will always be number one, we will grow milk volumes offshore by developing high quality milk supplies offshore and integrating them more closely with our business. The major focus will be China where we will establish several dairy farming hubs and process that milk for Chinese consumers. While we don’t have to fully own the farms and factories, we will be hands-on with management control when it comes to quality and safety. This is how we run our integrated businesses using local milk in Australia and South America.
7. Align Our Business And Organisation to Enable the Strategy+
With the Strategy Refresh giving us a clear direction, we are building a team with the right capability and tools backed with a robust capital structure to make it happen. In mid-2012 we re-organised the business to best deliver on the strategy. Along with the proposed introduction of Trading Among Farmers in November 2012, the Co-op has all the elements in place to deliver on our strategy.