“We are doing well,” he told more than 200 shareholders.
“But how much more can we do – are we going to lead or are we going to follow,” he challenged.
Spierings said there were massive opportunities but there were also massive challenges.
“I would definitely like to lead going into the strategy of the next five years.
“The world is changing and we need to change month-by-month with the world,” he said.
Dairying was 20% of all global agricultural land with today’s farmers producing six times the amount of produce off the same hectares of land as they did 100 years ago.
But climate change was working against the future of food.
“In New Zealand we recognise that challenge,” Spierings said.
Productivity was up 8%, emissions down 3.1% and $1 billion had been spent on farm environment initiatives.
Fonterra’s strategy was nutrition-focused, recognising innovation opportunity and smart precision farming for everyday, advanced and affordable nutrition.
“The trust opportunity will create the next level of value tracking the goodness in every drop of milk from 10,500 NZ farmers.”
The co-op’s ongoing transformation was leading to strong results and the strategy to shift more milk into higher-value products was working.
Fonterra’s Q1 revenue was up on the same quarter last year and the launch of new Anchor products in China was evidence of the co-op doing more with its milk to derive premium prices.
The Q1 revenue was up 5.9% on Q1 2016 to $3.8b, with consumer and food service volume up 11% quarter-on-quarter and the gross margin up 31%.
That contrasted the experience of ingredients, where the volume was up just 2% and gross margin fell 12%.
Chairman John Wilson said 2016 was an extraordinary year and it would be critical to continue to work closely with the Government in the significant political change following the resignation of Prime Minister John Key.
“It’s been a tough season for farmers but there’s been solid earnings growth within a strong co-operative.
“We have stayed on course with our strategy and lowered debt by $1.6b,” he said.
He made reference to the latest indicative payout of $6.40/kg MS, including an assumed 40c dividend and an average yield on shares of 7.3% during the incredibly difficult year.
Priorities for the coming year included the expansion of Farm Source to support farmers.
There would be investment in capacity support efficiency to generate more value in the consumer food service business.
“This will open the door for growth to meet the huge demand from an increasing middle class in China,” Wilson said.
In response to growing demand for safe, high-quality dairy nutrition, the new Anchor Upline range featured two new UHT milk products, NaturalUp and LiveUP.
LiveUp was a high-protein milk with 50% more protein than standard UHT while NaturalUp was made from certified fresh organic NZ milk that met Chinese and NZ organic standards.
Wilson said in the past year Chinese demand for dairy products rose 26% and in the past three months alone by 12%.
The rest of Asia was also a growth market, up 5% over 12 months, as was Latin America, up 13%. The Middle East and Africa were down 6% over the same period.
Fonterra Greater China president Christina Zhu said the new LiveUp products were a response to changing consumption patterns where Chinese consumers were increasingly seeking out more premium and healthy options.
Both products were now available right across China for sales orders online while LiveUp was being rolled out to stores in the coming months.
Each was being manufactured and packaged in NZ with LiveUp produced at Fonterra’s Takanini site and NaturalUp made at the Waitoa UHT site.
The launch in China was part of a global refresh of Anchor.
