Theo Spierings: The global dairy industry today is in a very strong position and I see healthy growth opportunities as global trade and demand continues to increase year-on-year.
Demand is being driven by growing economic strength and urbanisation of emerging markets such as Asia and South America. As incomes rise in these emerging markets, consumers are looking for nutrition that supports the health of their families, and dairy has an important role to play.
This growing demand for dairy is not only across young families, but with an ageing population in China and OCED countries there is greater nutritional demand for older consumers looking to stay fit and active.
Rising incomes alongside busy lifestyles also means a driving demand for out-of-home convenience food such as pizza and hamburgers sold by fast food restaurants, which contribute to global dairy demand.
Theo Spierings: As the world’s largest dairy exporter, we are well placed to help meet this growing demand. Fonterra already has well established market-leading consumer brands and ingredients businesses in emerging markets such as Asia and South America.
We are currently growing our milk production in New Zealand and overseas. Milk supply in New Zealand is forecast to grow by 2-3% a year but global demand is increasing much faster than that, and if we want to meet this growth we need to be able to increase our milk supply at home and overseas.
Our global sourcing complements our New Zealand milk supply and provides fresh milk closer to markets that we operate in. The countries we’re currently sourcing milk from include China, Australia, Sri Lanka and Latin America, and our strategy is to continue to grow these in market milk pools.
Theo Spierings: With increased access to information, consumers are becoming more conscious about what they eat and the nutritional value it delivers. They are demanding nutritional products that support the health and well-being of their family and our strategy is focused on targeting the three following segments.
Firstly, paediatric nutrition is the fastest-growing dairy category in the world, with parents increasingly demanding dairy to support growth and development of children and babies. While we have a substantial business manufacturing high-standard ingredients for multinational infant nutrition companies, we also have our Anmum brand, which already provides healthy nutrition for pregnant women and breastfeeding mothers. There are opportunities to continue to extend our Anmum brand further as trusted nutrition for mothers and babies, with China and ASEAN the priority. We have already done this successfully in Malaysia and Indonesia.
With an ageing population, particularly in China and across Asia, another focus is on developing dairy products that support nutrition for the old. These products are designed not only to provide a nutritional diet but also to help increase their mobility. Our Anlene bone health brand is a genuine success story in this category, and it plays a role in the prevention of osteoporosis. It also supports joint flexibility and muscle health so ageing people can stay mobile and active. It is the leading high-calcium brand in Asia, with a significant share of the market.
The third area of our focus is on consumers who are eating meals out-of-home. Our foodservice business operates around 50 countries with a portfolio of cheese, cream, butter, yogurt, pastries and beverages designed to meet the needs of chefs and commercial kitchens. It is an area of the business where we see continued growth and our innovation teams will have a big role in supporting these growth plans, particularly as the world demands better-for-you convenience foods.
Theo Spierings: Fonterra’s research and development centre has developed a world-leading patented technology that enables us to make frozen natural shredded mozzarella straight from milk in one day, rather than the two months taken by conventional mozzarella processes.
When thawed, the mozzarella has a superior functionality and composition structure that allows for a richer flavour, unique stretch and melt properties. This technology is helping Fonterra to meet growing international demand, primarily in global fast-food restaurant chains, supported by growth in regional fast food and fine dining restaurants.
Theo Spierings: This technology was created out of a pilot project in 2005 and has been expanded in stages since that time. The most recent expansion is a $72m plant enhancement that will be completed mid-2014. The Mozzarella product is already available in-market.
Theo Spierings: For Fonterra, the World Dairy Summit is about connecting with the industry and developing a united approach to science and food safety standards across the globe. Today’s consumers increasingly want to know more about their food and where it comes from and we as an industry need to ensure that the science we use provides them with the confidence that their dairy products are safe and of high quality.
Theo Spierings: It’s exciting to think where the dairy industry will be in the next 10 years. We have a rapidly growing population that’s set to double by 2050, and demand in 10 years’ time will be as strong as ever with dairy becoming a vital part of consumers everyday nutrition.
Growing greater supply across the world and product innovation will play crucial roles in meeting this demand, as well as giving consumers greater confidence in dairy products. However, our absolute focus must remain making it affordable and accessible to everyone, everyday.
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