Fonterra closer to China's dairy market with Shanghai innovation centre

By Ankush Chibber

- Last updated on GMT

Related tags: Milk

Kiwi dairy giant, Fonterra, has opened a new innovation centre in Shanghai as part of its strategy to tap into China's mushrooming premium dairy nutrition market.

Fonterra’s new centre will focus on developing innovative dairy products and premium ingredients specifically tailored to local Chinese consumer needs, the firm said.

Theo Spierings, CEO of Fonterra, said described the centre as “critical”​ to its integrated business being developed across China.

“Demand for dairy nutrition expected to double by 2020 and the way people consume dairy will change,” ​Spierings said.

He noted that the innovation centre will enable the firm to expand its current product and ingredient portfolio, but also develop unique products and formats for the local market and thus better serve local customers and consumers.

Closer to the China dairy surge

There is strong growth in consumption of dairy across China, Spierings said.

“As incomes rise across China, people are looking for nutrition that supports the health of their families, particularly young children, and dairy is one of the most nutritious foods there is,”​ he said.

“People's lives are also becoming busier, which means they're often looking for dairy products that they can eat on the go or use to make quick, easy and nutritious meals,”​ he added.

The new centre, Spierings said, will enable Fonterra to be closer to the market and respond to these changing lifestyles and consumer trends.

Phillip Turner, president at Fonterra China, said the new centre will importantly bring the co-operative closer to its major customers and the foodservice industry.

“The centre will carry out a number of product training courses for major customers, primarily focused on the Anchor dairy product line,”​ he detailed.

It will be staffed locally, with investments made into training in product formulation, production, operating procedures and food safety systems.

This latest business move comes shortly after Fonterra’s investment in two new large-scale dairy farms in Hebei Province, North East China.

Related topics: Business

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