Wednesday, May 22, 2024

Keeping pace with China’s taste for the new

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Consumer demand for new food and drink products ‘phenomenal’.
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As China opens up after covid lockdowns, Fonterra has introduced new products and moved into emerging new food and drink categories, chief executive Miles Hurrell says.

He told the 2023 China Business Summit the speed of innovation and the consumer demand for new products in China is phenomenal.

New protein and probiotic categories have benefitted considerably and are expected to continue to grow by 10% annually over the next five years.

Cheese, cream and butter applications are developed and promoted through Anchor Food Professionals (AFP), now active in 450 cities with 20,000 commercial customers.

Recipes have moved beyond pizzas and tea macchiatos into foods more tailored for the local palate.

AFP works with McDonald’s, Starbucks, Dominos, KFC, and Pizza Hut and more than 400,000 outlets in China.

Fonterra also looks after the needs of more than 25,000 locally owned cafes and restaurants, with new stores opening at the rate of 4000 annually.

Hurrell said consumers are constantly seeking out new drinks, and last year more than 1400 new non-alcoholic beverages were launched.

“Almost everything is done online and many retailers do not have storefronts, replaced by QR codes that are scanned and payment made digitally.”

Customers also want goods to be produced sustainably and New Zealand’s grass-fed dairy is well placed in that trend.

Fonterra has new products to support immunity and cognition.

One-third of NZ milk is consumed in China in many varied forms, Hurrell said.

Zespri chief executive Dan Mathieson said 25% of NZ kiwifruit are consumed in China, which is a $1 billion market for the single-desk exporter.

Over 100 people are employed in five regional offices in that country.

With new sustainably produced packaging, more than 40% of kiwifruit are bought online and delivered to the home.

Zespri has expanded from 60 to 90 cities over the past three years and now reaches 150 million potential customers.

Distribution can also be deepened as consumption increases from five fruit per person annually in Shanghai to 10 pieces in Taiwan.

Mathieson said the aim is to market high-quality healthy foods using new technology in e-commerce.

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