Our Ingredients channel represents about 85% of milk solids sold.
Over FY24 and FY25, the Ingredients business generated approximately NZD16 billion in revenue annually, while its average return on capital was 12%.
This channel is core to how the Co-op creates value for shareholders and unit holders, helping to inform the Farmgate Milk Price, while also contributing to the Co-op’s profit through higher value products.
Our dairy ingredients
Fonterra’s Ingredients business produces hundreds of dairy ingredients that global customers use to create food and beverages under their own brands – appearing in a wide range of everyday products.
These ingredients are sold through NZMP™, Fonterra’s ingredients solutions brand, which supplies over 1,000 customers in more than 100 countries. NZMP™ products are found at the core of some of the world’s most iconic food and nutrition brands.
Businesses choose the Co-operative for the trusted quality, performance, and reliability its ingredients provide.
These dairy ingredients are developed by leveraging Fonterra's heritage in grass-fed dairying, manufacturing excellence, efficient supply chain operations, and rigorous quality standards.
Fonterra’s Ingredients business portfolio
The Co-operative produces a diverse ingredient portfolio including both standardised commodities and sophisticated, high-value ingredients.
Powders
Whole, skim and instant milk powder including paediatric and lactose powders – ideal as ingredients in applications like beverages, bakery, infant formula and direct repack.
Proteins
Caseins, caseinates, hydrolysates, milk protein concentrates (MPC), whey protein concentrates (WPC), and whey protein isolates (WPI) – deliver high-quality nutrition and functionality for sports, medical and everyday food and beverage applications.
Cheese
A wide range of cheese types and tailored innovations, including cheddar, mozzarella and cream cheese – delivering versatility to a broad range of applications.
Dairy fats
Butter, cream, anhydrous milk fat (AMF) – deliver rich texture, flavour and functionality for bakery, confectionery, and culinary applications.
Specialty ingredients
Lactoferrin and Milk Fat Globule Membrane Phospholipids (MFGM Phospholipids) – offer targeted health and wellness benefits, backed by science, for use in applications including food, beverage and supplement formats targeting the full spectrum of life stages and lifestyles.
Demand across the regions
Across Europe and the United States, the protein market is booming. In the US, trends are showing 27% of consumers are prioritising high-protein content with the market projected to reach USD9.7 billion by 2032.
Across Asia, from Japan's functional foods to China's renewed call for dairy and both exponential growth in the Middle East and Africa and Southeast Asia, the region represents a massive dairy ingredients opportunity with over 3 billion consumers and increasing demand for innovative dairy solutions.
Closer to home, across Oceania, we continue to see strong growth across the core portfolios such as cheese, as well as an acceleration of high-protein ingredients, most significantly across the sports nutrition and active lifestyle categories.
Getting product to market
Fonterra’s ingredients are sold through NZMP™ providing multiple sourcing options that ensure both flexibility and broad global reach for customers.
Through direct sales, the Co-operative’s international team builds long-term, strategic partnerships with major food and nutrition customers.
Additionally, Fonterra leverages the Global Dairy Trade™ (GDT) platform to facilitate the sale of standardised commodity ingredients via online auction, as well as a wide network of distributors and authorised NZMP™ resellers allowing the Co-operative to reach markets and customers it is unable to service directly.
Looking to the future
We are growing our portfolio of advanced, high-value ingredients to meet the rising global demand for high-quality nutrition, especially in health-conscious and functional food markets.
Our product mix is deliberately flexible, enabling us to shift production toward higher-margin categories based on market signals. This agility helps us put milk where it earns the most value for the Co-operative.
Related resources
Infographic: Shining a spotlight on our high value ingredients
Factsheet: Fonterra's Ingredients business