Asia demand drives Foodservice growth
With Fonterra’s UHT plant at its Edendale site only a year from completion, demand continues to grow for Foodservice products, such as Anchor Whipping Cream, that the plant will produce.
The Co-operative’s Foodservice channel registered a $27 million increase in operating profit for FY25 as demand continued to grow for UHT cream, butter and IQF mozzarella.
While China is the main destination for Fonterra’s foodservice products, demand is growing in Southeast Asia where restaurant chains and cafes are using more dairy in their dishes.
Jack Tan, Fonterra's Acting Director of Southeast Asia Foodservice, says the growth reflects a broader shift in how dairy is being embraced across the region.
“We’re seeing strong and sustained growth in demand for UHT cream across Southeast Asia driven by a rising middle class, urbanisation and increased awareness of dairy’s nutritional value. Anchor Whipping Cream is becoming a staple in many local favourites, from beverages to baked goods, and is used in Portuguese egg tarts in Singapore, Malaysia and Thailand. It’s also gaining popularity in local beverage applications across Malaysia, Singapore, Indonesia and Vietnam – where it’s being added to Vietnamese coffee for a creamy twist.
“It’s exciting to see New Zealand dairy becoming part of everyday diets in the region, and the new plant at Edendale will help us keep pace with that demand.”
Anchor Whipping Cream is a hero product in the Fonterra's Foodservice portfolio. Developed by Fonterra’s Research and Development Centre in Palmerston North, the formulation is designed to perform consistently in cream cakes and tea macchiato toppings. It’s a favourite in China, where it’s used in around 400 million beverages and 260 million cakes each year in beverage outlets and bakeries.
The innovation behind the UHT cream has also helped diversify the use of milk in Asian markets, where it’s increasingly used in cakes, puddings and beverages that traditionally rely on coconut milk. Its longer shelf life gives it an edge, helping extend the life of these products.
It’s exciting to see New Zealand dairy becoming part of everyday diets in the region, and the new plant at Edendale will help us keep pace with that demand.
Update on the UHT build
The $150 million investment in the Edendale UHT plant is coming along well, with the first product expected to roll off the line in one year. Construction is well underway with the new UHT cream plant is starting to take shape, marking a significant milestone in Fonterra’s commitment to delivering high-quality dairy products to growing markets across Asia.
Andrew Johns, Fonterra’s General Manager of Lower South Island Operations, says that the investment at Edendale is not just about meeting demand – it’s about building for the future.
“We're really excited about this opportunity to build a new plant here in Southland and supply UHT cream for growing markets.”
Currently, more than 50 people are working on the build, with that number expected to grow to around 150 in the coming months as activity ramps up.
“There’s good energy on site and I hope that’s filtering through to the community too.”
What is Fonterra’s Foodservice business?
Foodservice is the business of preparing and serving food and beverages outside the home. It includes a wide range of settings such as restaurants, bakeries, beverage outlets, cafeterias, and quick-service restaurants.
Fonterra’s foodservice brand, Anchor Food Professionals, supplies high-performing dairy products to customers in more than 50 countries. We work closely with these customers to help them meet the needs of their consumers by offering innovative dairy products and solutions that align with current food trends.
Our Foodservice business focuses on five key channels: bakery, beverage, dining, quick-service restaurants, and retailised foodservice, which includes supermarkets, convenience stores, and packaged snacks.