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FONTERRA
Fonterra is a global nutrition Co-operative owned by 9,000 farmers, exporting to over 130 countries worldwide. Fonterra and its predecessors set foot in the China market almost half a century ago, and we are committed to delivering sustainably produced, high-quality and nutritious dairy products to customers in China, our largest strategic market.
The first New Zealand dairy delegation visited China in 1973. In 1982, our legacy company (NZ Dairy Board) established a wholly owned branch in Hong Kong named Anchor Foods (HK) Ltd and started exporting ingredients to China. Our China region includes around 600 employees in over 40 cities.
China is an important strategic market for Fonterra. In the past few decades dairy consumption in China has grown significantly, reflecting the growing awareness among Chinese consumers of the nutritional quality of dairy.
The New Zealand-China Free Trade Agreement (FTA) and its recent upgrade in 2021 has also played an important role in facilitating the trade of high-quality dairy products to meet growing demand in China. The FTA has been a great example of the two-way benefit that can be achieved through an enhanced trade relationship. The FTA has also provided us a framework for dairy industry cooperation including:
Partnering on information and knowledge exchange to support best practice dairy production on topics such as food safety, milk quality, treatment of manure and waste recycling.
Partnering for innovation including working with Chinese ingredients and foodservice customers to utilise Fonterra’s Innovation and Application Centres in China.
Partnering to supply high-quality dairy nutrition to support Chinese residents consume dairy in their diets and meet Chinese Government targets for dairy consumption.
Fonterra’s strong relationships and commitment to the market and the local dairy industry in China has helped to shape the business into what it is today.
Fonterra has established a strong core business across dairy ingredients, foodservice, and consumer brands in China, supported by deep market knowledge, innovation, and strong relationships with Chinese dairy industry partners.
NZMP is Fonterra’s ingredients business which operates across a broad range of products with more than 3,000 SKUs of ingredients developed to meet the needs of Chinese customers.
Anchor Food Professionals (AFP) is Fonterra’s foodservice business. AFP provides high-quality, fit-for-purpose dairy products and solutions encompassing cheese, cream and butter to foodservice businesses and professionals. Fonterra’s customers include a number of well known brands and Anchor Food Professionals products are delivered to over 430 cities across China, covering over 20,000 catering customers with their 400,000 dining chains.
Fonterra has a range of Consumer Brands in China such as Anchor, Anmum and Anlene, which are available in more than 13,000 stores and e-commerce channels.
Innovation is a common theme of Fonterra’s history and success in China, and we are always looking at innovative ways of using dairy products in local cuisine. For example, in 2021 Fonterra launched ‘Cheese Pro’ a mix of cream and cheese that helps customers save time when making tea macchiatos. Fonterra has increased its focus on market led innovation and in 2021 opened an updated application centre in Guangzhou, as part of a plan to update all the application centres in China.
Fonterra has application centres in Beijing, Shanghai and Chengdu. In 2020 Fonterra announced the launch of the Fonterra-Anchor Centre for Certification (ACC) Shanghai Innovation Centre, a research and development centre. The centre is focused on bringing Fonterra closer to the changing preferences desired by Chinese consumers.
Sustainability is a strategic focus for Fonterra, and the Co-operative’s sustainability strategy is enhanced through collaboration in China. In April 2021, Fonterra Greater China partnered with the China Environmental Protection Foundation in setting up China’s first-ever project fund specifically designed for bakery chain stores. The project is unique to the food and beverage industry and helps promote improved environmental outcomes. Fonterra Greater China has also helped run a tree planting campaign together with thirteen customers in China.
Due to New Zealand’s highly efficient pasture-based farming system, our farmers have a low carbon footprint. New Zealand’s on-farm carbon footprint is approximately 1/3rd of the global average. By partnering with our customers in China, we can help them to lower the emissions profile of their value chain and dairy ingredients, helping them to achieve their sustainability goals. At CIIE in 2021 we launched our first carbonzero™ certificated dairy ingredient to the market, our NZMP Organic Butter. We have the capability and aspiration to expand this offering to more products and customers in the future.
Fonterra has greatly appreciated the opportunities to work with Chinese government agencies, our customers and consumers, and local industry groups to deliver high quality, sustainably produced dairy nutrition in China and support the local Chinese dairy sector. We congratulate New Zealand and China on reaching the 50th Anniversary of Diplomatic Relations and look forward to continuing to support this strong partnership in the future.