Fonterra’s European business delivering value back to the Co-op
The NZ-EU Free Trade Agreement has now been in force for a little over a year now.
While the FTA outcomes fell disappointingly short of full tariff elimination across all dairy products, Fonterra’s European business is working hard to leverage the additional pockets of FTA access and strong demand for certain products to deliver value back to the Co-op in this important market.
First year results
Fonterra Europe’s efforts are already showing practical benefits, with growth across key products such as butter, cheese and protein.
Europe is currently Fonterra’s largest market for functional Whey Protein Concentrate, a high-value ingredient used in protein-enriched products such as high-protein yoghurts and meal replacement beverages. This is sourced from both manufacturing sites in New Zealand and Fonterra’s Heerenveen factory in the Netherlands, located about 90 minutes north of Amsterdam.
European buyers are receptive to New Zealand dairy products, recognising their value and quality standards, and sales demonstrate that there's genuine demand for New Zealand dairy in the European market as customers look to diversify their dairy product supply.
European consumers also have a growing interest in grass-fed dairy and sustainable farming practices – areas where the Co-op naturally excels and provides a competitive advantage in high value markets.
Fonterra's European business serves as a true regional hub. Based in Amsterdam, the team provides sales and support to some of the world's largest dairy, nutrition, and food companies, including global customer, Nestlé.
Looking ahead
The European market, consumers, customers and regulators are increasingly interested in the properties of the products they consume or put on the shelf. Fonterra’s strong sustainability credentials mean we’re able to support our partners goals and targets and include this in our offerings alongside quality, reliability as well as additional supply optionality.
The Co-op's strength in innovation will also play a crucial part in regional success particularly through partnerships with leading companies to address the growing protein, health, and wellness trends in developed markets such as Europe. By collaborating with these partners, Fonterra can continue to develop and supply innovative solutions to meet the evolving needs of the market.
Although the opportunities for butter, cheese, milk powder, and key proteins are still constrained by permanent quotas, and in-quota costs, there are pockets of value opened by the NZ-EU FTA, and our European team is working to take advantage of and maximise these opportunities supported by strong demand for New Zealand dairy.