The added-value split is about one quarter each in consumer-ready products and food service products and half in advanced ingredients, which have added functionalities.
The external sales volume is more than 22 billion litres of milk annually, equivalent to 27 hours of water out of Lake Taupo and over the Huka Falls.
Debate centres around Fonterra’s alleged lack of willingness or capital funds to turn this prodigious milk flow into ice cream or yoghurt or varieties of cheese.
How fast is fast enough when you are in danger of going over the falls – every day during the spring production peak?
Dairy nutrition commentator Julian Mellentin (page 4) says even multinationals like Fonterra ignore key consumer trends at their peril.
But within the beast there are researchers, marketers, trend spotters and decision makers who spend their working lives on these matters.
New Zealand Milk Products publicised some of its higher-margin products to the food industry and media last year.
Lactoferrin, called pink gold, sells for $250,000 a kilo but that takes 10,000 litres of milk to produce.
Sports drinks and paediatric nutrition are now anchored on whey protein concentrate, a by-product of cheese manufacture.
Consumer trends by their nature are not secrets and NZ has many dairy companies developing and marketing foods and beverages that respond to one or more of Mellentin’s eight trends.
Nonetheless, Fonterra chief executive Miles Hurrell has signalled a theme rather than trend that needs addressing.
It is the NZ dairy story of pasture, provenance, quality, family farming and co-operative ownership.
Many customers pay and will pay more for that quality assurance, he says.
Fonterra farmers will hear a great deal more about what Fonterra calls the Co-operative Difference in the future.
Hugh Stringleman
