Fonterra’s Foodservice business tops $2 billion

Fonterra Chief Operating Officer, Consumer and Foodservice, Lukas Paravacini, said the achievement is the result of changing lifestyles by consumers and a new way of working, which is about partnering with customers to help their businesses succeed in this rapidly growing industry.

“Foodservice is one of the largest industries in the world and encompasses food and beverages that are consumed out of the home such as in restaurants, cafes and bakeries. 

“In the USA more than 50 per cent of all spend on food and beverage is now out of home and in China the market has grown by 30 per cent over the last five years. As a result, the global industry is predicted to be worth US$3 trillion in 2021.

“We have taken advantage of this eating out trend and currently Anchor Food Professionals is growing around 10 times faster than the global total foodservice market. 

“It is part of our strategy of focussing on adding more value to every drop of our farmers’ milk. The gross margin from foodservice is two or three times what we can earn from basic ingredient products,” said Lukas.

Global Director Foodservice, Grant Watson, said a new business model which centres around providing solutions based on customer insights, has been central to this success.

“We have 56 chefs in more than 50 countries who go into kitchens to demonstrate the products. They get to know their customers, work to understand their issues and challenges, and help us design more new products to help address those problems.

“We know the smallest things can make a difference, so we make our products last longer, stretch further, work faster, waste less, withstand more. We bring together world class dairy products and the deep expertise of our people to work alongside the passionate, talented and innovative food professionals who are driving the foodservice industry to new heights,” said Grant.

“We also have a very clear channel-led system,” adds Grant. “This provides foodservice kitchens around the world with ingredients for some of the largest categories in the business; Asian style bakeries, Italian Kitchens and Quick Service Restaurants. Our ingredients include our extra stretch mozzarella, UHT culinary and whipping creams, laminated butter sheets and cream cheese.”

Lukas said that over the past four years Fonterra has invested $850 million in new production capacity for Foodservice - $700 million of which has been in New Zealand. These expansions are at Waitoa in the Waikato for UHT creams, Eltham in Taranaki for slice-on-slice cheese, Clandeboye in Canterbury for extra stretch mozzarella and Te Rapa in the Waikato and Darfield in Canterbury for cream cheese.

“These investments are helping us to match increasing demand for our products and ensuring that we remain on track to meet our annual revenue target of $5 billion by 2023,” said Lukas.