Fonterra: A view of the dairy market in Asia Bruce Donnison General Manager, Sustainability...
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Transcript of Fonterra: A view of the dairy market in Asia Bruce Donnison General Manager, Sustainability...
Fonterra: A view of the dairy market in Asia
Bruce DonnisonGeneral Manager, Sustainability
Confidential to Fonterra Go-operative Group
2 March 2011
Page 2
About Fonterra Cooperative Group
• Formed in 2001 with the merger of the New Zealand Dairy Board, New Zealand Dairy Group and Kiwi Co-operative Dairies
• Largest milk processor and largest dairy exporter in the world
• Annual revenues of NZ$16 billion
• 15,000 employees
• Sales network that reaches customers in more than 140 countries.
• Cooperative structure – owned by 10,500 New Zealand dairy farmers
• No matter where we are in the world, dairy is what makes us tick
Page 3
Today’s presentation
• The dynamics of the dairy market in Asia
• How Fonterra operates in the Asian market
• The importance of a sustainable approach
– Nutritional innovation
– Security of the supply chain
• Delivering the nutritional needs of Asian consumers
• The role of the Australian dairy supply chain
Page 4
Fonterra
Our Vision:To be the natural source
of dairy nutrition for everybody, everywhere,
every day
Fonterra
Our Vision:To be the natural source
of dairy nutrition for everybody, everywhere,
every day
Page 5
Total dairy market in Asia and Middle East
• Total market AUD $9bn• Roughly twice the size of
Australia• Growing at 4-5% per annum• Consumption will continue to
rise
Page 6
China also a major driver of growth
China on track to exceed 1 million tonnes of dairy imports
– China
– Mexico– US / Japan– Russia– EU
Percentage of global imports
Page 7
Plenty of room for growth
Source: Euromonitor, powder converted to its rate of 1kg = 8.33 lts. 2005 data
Latam average = 57 lts/capita
Asia average = 11 lts/capita
• Low base per cap consumption
• Huge populations with increasing incomes
• Interest in healthy eating is growing
• Milk is seen as a ‘gold standard food’
Per capita milk consumption
Page 10
Delivering on nutritional needs in Asia
• Leading adult dairy nutrition product in Asia
• 286 million Chinese expected to suffer osteoporosis/low bone mass by 2020
• Anlene is high-calcium, clinically proven to prevent osteoporosis
• Backed by continuous research and innovation
• Leading product for pregnant women in Asia
• Unique ingredient builds brain connections in infants
• Supported by educational programs on maternity/infant nutrition
• Science behind Anmum building broader paediatric product range
Page 11
On-farm
• 1,500 farmer suppliers;
300,000 cows
• 20% share Australian industry
The role of the Australian dairy supply chain
MilkCollection
• 1.8 billion litres per annum
• 50,000 on farm pick-ups p.a.
Manufacturing
• 12 sites nationally
• Manufacture consumer and foodservice
products ,and bulk ingredients
Sales and marketing
• Research• Innovation
• Product development
Storage and handling
• 300,000 tonnes of Australian product per
annum
All underpinned by our principles of sustainability
Page 12
Summary
• Fonterra is on a journey to deliver the nutritious dairy products the world needs in a sustainable way
• Milk is a product of nature so this journey starts with clean water, green grass and healthy cows
• Asian consumers have unique demands from dairy, the market is growing rapidly and is a key focus for us
• We are committed to meeting demand from Asian consumers by:
Investing in R&D so they can enjoy the best of dairy
Ensuring a safe, secure supply chain to build confidence about where our products come from