Packaging makes sure our high quality dairy products get safely to people around the world. But the disposal of that packaging can come with a challenge.
So, we’re taking steps to reduce our impact. We are on a journey to make our packaging increasingly recycle-ready.
We’re making our packaging recycle-ready.
Whilst it is not always possible for us to influence the recycling infrastructure available to our customers, we can control the type of packaging we use. We are focusing on using materials and formats that are recycle-ready without compromising our high quality products or food safety outcomes.
What does recycle-ready mean?
Recycle-ready means that our packaging meets international industry-agreed Design for Recyclability guidelines.¹ This means used packaging can be turned back into raw materials using commercialised technologies, which reduces the demand for new virgin materials to be created. However, the exact level of recyclability will vary depending on the availability of recycling collection and processing infrastructure in any given market. Some recycle-ready packaging cannot be readily recycled yet in some markets as the infrastructure is not yet widespread. In this situation we also use the term Ready for Recycling.
Recyclable
We will only use the term “recyclable” and/or associated icon where we are satisfied that the infrastructure to collect and process our recycle-ready packaging is readily available in the market in which we sell it.²
Our progress
We continue to consider the environmental impacts of our packaging at key points in the lifecycle and have implemented new opportunities to use recycle-ready packaging materials, while maintaining our strict product quality and food safety requirements.
We estimate that around 90% of our packaging is recycle-ready. This estimate is consistent with FY24 and is on a total tonnage of packaging basis, incorporating updates in the recyclability status of individual packaging materials in FY25. Based on this, our target to achieve 100% recycle-ready packaging by 31 December 2025 is unlikely to be fully met before being retired at the end of the year.
We have been innovating in the use of AI to enhance our packaging quality control and reliability. Developed by our in-house Automation and Operational Technology team, our AI-enabled image recognition system enhances packaging quality control and reliabilit he technology uses AI-enabled image recognition to visually inspect 25kg milk powder bags for damage across 56 packing lines. Faulty bags are automatically rejected, and timestamped images are captured for traceability. Approximately 66 million bags a year are being checked by AI, helping us to reduce waste, downtime and continue producing consistently high product quality. Building on this success, the technology is also being used at our Clandeboye site to monitor bulk butter packaging. If a fault is detected, our operators are provided with an alert to intervene early so they can keep the production line running efficiently.
During the year we have implemented initiatives to reduce the environmental impacts associated with the packaging we use and actively supporting initiatives to increase recycling rates. Many of these are associated with the activities of our consumer business.
In Australia, our Stanhope site produces approximately 17,000 metric tonnes of 20kg cheese blocks each year. To package these products, the site has transitioned to using a recycle-ready film validated for food safety, quality, and machinability on production lines. This innovation substantially reduces the environmental impact of the approximately 45 tonnes of plastic used annually for packaging. We have also established industrial collection contracts to recycle soft plastics at our secondary processing sites, with future potential for developing broader recycling infrastructure for customers.
In a similar initiative, we are transitioning approximately 270 tonnes of PVDC-based films used at our Tullamarine site in Australia to recycle-ready packaging, delivering improved sustainable packaging outcomes while maintaining product integrity. This initiative eliminates non-recyclable materials that can damage recycling infrastructure, and the packaging will carry the ‘Check Locally’ ARL, guiding consumers on appropriate disposal. The commercial rollout began in July 2025, with full implementation across all applicable products expected by early 2026.
Australia participates in the Big Bag Recovery program, a government-accredited product stewardship scheme that allows industrial customers to recycle one-tonne bulk bags. Recycled bags are repurposed into items like school chairs and water evaporation floating covers.
Anchor Food Professionals has introduced recycle-ready packaging for mini butter portions in the Middle East. Our Dammam site produces these single-serve portions on a newly installed production line, using recycle-ready aluminium tubs and lids as a sustainable alternative to composite materials. This innovation provides a premium and sustainable alternative to plastic mini-tubs. The local production reduces lead times and improves operational efficiency for customers in the region.
How you can help
Making a real impact takes everyone.
After you’ve finished enjoying your dairy goodness, make sure to clean and recycle everything you can. When all Fonterra’s dairy lovers do this, we can help reduce our impact together.
Working together to reduce solid waste to landfill.
We are working hard to reduce, year on year, the volume of waste going to landfill.
We are working closely with recycling partners to identify pathways to recycle many of the waste types we have on our sites.
Some of the materials we use require specialised reprocessing to ensure they don't end up in landfill. It can take time for the right technology to be developed but we are continuing to identify new potential solutions as they become available.
Our Approach
We are developing site specific Waste Improvement Plans to identify where we can do better with our waste and to ensure solutions are shared across our sites.
We are working with experts to ensure, that as technology and demand develop, we can divert any hard to recycle materials away from landfill.
All our hard work has seen a 32% reduction of waste to landfill in FY24 from our FY19 baseline.
¹ For example, the Association of Plastic Recyclers design guide and testing protocols.
² We define “readily available” as either (a) at least 80% of users have access to recycling services for this particular type of packaging (aligned with labelling programmes such as Australasian Recycling Label), or (b) data shows that recovery rates of at least 30% are being achieved for this particular type of packaging (aligned with definitions used by the Ellen MacArthur Foundation Global Commitment).