Fonterra: Asia behind global foodservice growth

By RJ Whitehead

- Last updated on GMT

Fonterra: Asia behind global foodservice growth

Related tags: Pizza hut, Kfc, Fast food

The world’s biggest dairy company, Fonterra, believes that global foodservice growth is being driven by the emerging Asian markets, where it estimates the category will increase at around 13% per year until at least 2016.

To meet the expansion required to accommodate this growth, Fonterra has just unveiled plans to invest NZ$72m at its Clandeboye mozzarella plant.

This additional capacity is needed to meet growing international demand among global fast food restaurant chains, as well as growth in regional fast food and fine dining restaurants.

Mozzarella melt-down

Fonterra’s investment is the final stage of a technology upgrade that will double the capacity of the Clandeboye plant in Canterbury to produce individual quick frozen grated mozzarella. When fully implemented, this will increase Fonterra’s IQF mozzarella capacity across its two plants in New Zealand to over 50,000 tonnes per annum.

Clandeboye uses a manufacturing process that Fonterra has developed to turn milk into frozen natural shredded mozzarella in one day, rather than the two months taken by conventional mozzarella processes.

Fonterra foodservice director, René Dedoncker, said that Asia has been driving global foodservice.

Demand for high-value dairy products like mozzarella is being fuelled by changing dietary habits, particularly in Asia, where there is a significant move toward more Westernised diets​.

For example, there has been dramatic growth in the number of pizza restaurants in China, where key customers such as Yum! [owners of the Pizza Hut brand] and Domino’s Pizza are undertaking aggressive expansion plans in new and existing markets​.”

Corporate strategy

He added that foodservice is one of seven strategic paths identified in the Co-operative’s business strategy and it was one of the stand-out performers in Fonterra’s annual results released at the end of September.

Our progress last year shows that our strategy is delivering the results we want in our priority areas. A good example is our Asia, Africa and Middle East business, where we achieved a 45% normalised EBIT growth in foodservice. We also achieved double digit growth in China, where foodservice grew 28%​.”

With demand for out-of-home meals increasing annually, Fonterra expects sales in this category to grow further.

The Clandeboye plant upgrade will begin in mid-2014 and is due to be completed by September 2015.

Related topics: Markets, All Asia-Pacific, Dairy, Asian tastes

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