Friday, March 29, 2024

Fonterra tries new paths in China

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A huge reduction in holiday travelling over Chinese New Year opened up dairy market opportunities for Fonterra ingredients, and in foodservice and consumer brands.
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Fonterra chief executive for greater China Teh-han Chow says official figures showed a 77% drop in passengers on public transport between February 11 and 17, compared with 2019.

The Government discouraged the traditional holiday travel to home cities, asking people to stay put to confine covid-19 disease outbreaks.

Conversely, shorter trips around the places of work and residence increased.

“Chinese New Year is the most important time for family gatherings, and for gifts with a major emphasis on food,” Chow said.

“The travel impact of covid-19 meant that Fonterra had to change tack.”

Contingency plans were conceived as Fonterra’s 1800 employees in China thought of ways to boost sales under the unusual circumstances.

For some ingredients, customers’ New Year sales can make up a quarter of their full-year revenue and special themed products are made for the occasion.

One customer snack created is a sugar-coated cheese-flavoured lollipop, using only dairy ingredients from Fonterra.

Others made gift packs for sale from mid-January, necessitating timely changes of deliveries of ingredients.

“Our people had to make detailed supply chain and shipping plans and keep close communications with the customers,” he said.

In the Anchor Food Professionals team, new recipes were developed for customers to create for the New Year festival.

Examples included cheesecake gift packs, cheese-stuffed sticky rice dumplings and ox-shaped cakes to reflect the Year of the Ox and the Spring Festival.

Chow says the festive occasion also created a huge demand for ready-to-go food products, as families cooked at home rather than attend local restaurants.

“We have been working on ways to get cheese dumplings or cheese shrimp balls for hotpots,” he said.

“Local food outlets expanded their online offerings and we launched a new frozen shredded mozzarella cheese that remains stretchy and tasty even when pizzas are reheated at home.”

In the consumer products business, Anchor Chinese New Year posters were available to be personalised as gifts for family reunions and gatherings.

Gifts for elderly relatives featured Anlene rather than Anchor.

A small website enabled consumers prevented from travelling home to create an individualised poster to send best wishes to their family members.

Chow says over 150,000 such posters were made.

These new products and services came from the agility and adaptation of the Fonterra China team, he says.

Smaller disruptions to shipping and deliveries had been resolved quickly, so that customers had the ingredients they needed when they wanted them.

“Our retail sales over New Year showed double-digit growth, compared with 4.9% growth in consumer purchasing overall,” he said.

Since the latest covid-19 outbreaks have been controlled, travel restrictions around China have eased.

Growth in foodservice demand has resumed, although he was reluctant to say what is “normal” any longer.

“We have to develop new plans and products and remain adaptable for whatever comes up,” he said.

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