Fonterra targets Asia market with new cream cheese plants

25 Jul 2017

Fonterra has announced plans for two new cream cheese plants at its Darfield site in Canterbury, with the output addressing the Asia market where the company sees surging demand.

Fonterra targets Asia market with new cream cheese plants

Fonterra has announced plans for two new cream cheese plants at its Darfield site in Canterbury, with the output addressing the Asia market.

The company sees cream cheese undergoing a steady surge in popularity in Asia, and the $150 million two-stage project will see the first plant completed in 2018 with a second to follow in either 2019 or 2020.

The two new plants will incorporate Fonterra-first technology that will allow the firmness and consistency of the cream cheese they produce to be dialled up or down to meet customer preference.

Fonterra’s Director of Global Foodservice, Grant Watson says the investment is a timely one as more and more consumers around Asia develop a preference for milk-based products.

“What’s really promising are the trends we’re seeing in cheese, butter and UHT over the years – not just in the sale of dairy products, but how they are being consumed. Particularly as the major urban centres in China shift away from oils, people are actively seeking more dairy in their diet whether in their cooking, as a table spread or in a glass,” said Watson.

“In markets like China – where dairy hasn’t traditionally been a staple – there are fewer pre-conceived notions around how it should be eaten, and with that we’re seeing remarkable versatility in their dairy applications.”

“Arguably some of the most innovative dairy product development anywhere in the world is happening right now in China and, through our Anchor Food Professionals team and their engagement with our customers, we’re playing an integral role.”

Dairy beverages such as tea macchiato – which mixes tea with cream and cream cheese – are evidence of a willingness to be bolder with dairy applications, says Watson.

Fonterra Chief Operating Officer - Global Operations, Robert Spurway says this investment will be a significant one for the Co-operative and is a good demonstration of Fonterra’s strategy in action.

“This is not just about expanding our capability in manufacturing, it’s another marker in our strategy to continue delivering better returns to our farmers. What’s particularly exciting with this project is our ability to innovate with new technology that opens up all manner of new possibilities in some of our key markets,” said Spurway.

“Projects like these are great examples of how we’re keeping pace with customer preference. Not all cream cheese is the same, and one that is used in a beverage will be quite different to one that is used in a cream cake. The new technology we’re introducing at Darfield will give us the flexibility to quickly change our products to suit that need – a real game changer.”

Once the project is complete, Fonterra says that Darfield will become one of the largest producers of cream cheese in New Zealand, alongside the Co-operative’s Te Rapa site, something Spurway says is positive for the region.

“Canterbury is fast becoming the Co-operative’s foodservice capital of New Zealand with nearly half a billion dollars of investment in this category over the past three years.”

“Globally, the foodservice industry is growing around 6 per cent every year. Expansions such as these, which are backed by customer demand, have helped Fonterra’s foodservice business triple that figure over recent years. This puts us well on track to achieve our targets of 20 per cent year on year growth in foodservice sales.”