By Miles Hurrell, CEO of Fonterra
Last week, I was fortunate to join Prime Minister Christopher Luxon’s mission with accompanying business delegation to Singapore, Thailand and the Philippines.
Southeast Asia is a thriving cluster of markets full of potential for New Zealand exporters, Fonterra included. The region is home to 640 million people with a growing middle class.
To put this in perspective, if southeast Asia was a country, its population would be the third largest in the world.
Collectively, it is the world’s fifth largest economy, and enjoys some of the fastest economic growth rates in the world. The opportunities for NZ businesses are apparent and I saw this firsthand as part of the delegation.
The delegation provided a platform for leading NZ businesses to showcase the work they are already doing in the region but also to develop connections and understanding of new markets.
Singapore has a strong focus on sustainability under its 2030 Green Plan, and companies like CarbonClick are already tapping into this potential with their partnership with Changi airport.
In Thailand we saw firsthand how Beca is helping to shape some of the country’s largest buildings in Bangkok, and in Manila we experienced the opportunity for collaboration in the geothermal industry as well as the potential that arises from the country’s young and growing English-speaking population.
Looking at the opportunity for dairy, the population’s appetite for high quality food is increasing, with the gap between dairy demand and supply expected to widen by 30% by 2030. NZ dairy is already trusted by the region and is well positioned to fill this growing demand gap.
I always enjoy being in-market and it’s a privilege to see where Fonterra farmers’ milk ends up. Our co-op has been present in southeast Asia for nearly 50 years and our footprint spans eight markets.
We deliver dairy nutrition across all life stages through our consumer brands Anchor, Fernleaf, Anlene and Anmum, which enjoy good market share in the region, and we partner with local customers through our foodservice and ingredients businesses.
As Western diets become more prominent, we are forecasting growth in demand for butter, cream and cheese, with more dairy being used in regional cuisine such as creating a laksa with dairy cream rather than coconut milk.
Our foodservice business in particular has a lot of potential to cater for this demand, with southeast Asia shaping up as our next growth market outside China.
We have a team of chefs in-market supporting the foodservice sector to use dairy in local and regional cuisine and we are working with partners to develop new applications based on consumer need and preferred formats.
Fonterra’s focus is on bringing NZ dairy to everyday staples, such as egg tarts in Thailand, banh mi in Vietnam, ube jam in the Philippines and local crepes in Indonesia. We’ve seen growth in the bakery channel too, with the rise of specialty bakery and lifestyle cafes across the region.
We are also leaning into the hyper convenience trends through our ingredients business, in particular in Thailand, with our dairy going into ready-to-eat and ready-to-drink foods, which are increasing in popularity.
We’ve found that southeast Asia is an excellent market for launching and testing new product concepts. Last year we opened a local application centre, Te Mātāpuna Lab, in our Singapore office, to focus on supporting the region’s pipeline of innovation and application projects.
Fonterra has a real strength in adding value to farmers’ milk by working alongside customers, using our innovation expertise, to create products for changing consumer needs. Southeast Asia is a great example of where this comes to life.
Southeast Asia presents plenty of opportunities for further growth, both for Fonterra and NZ’s export sector as a whole.
It was a real pleasure to see this first-hand as part of the prime minister’s mission and I look forward to seeing what comes of the connections and partnerships formed by the business delegation.
