OPINION: The non-performing China Farms have always been a source of headaches for Fonterra.
Fonterra UHT milk and cream cheese were the star performers, according to the co-op’s chief executive Greater China, Teh-han Chow.
Other popular products with Fonterra ingredients included tea macchiato (tea with a dash of cream cheese) and cheese lollipop.
Chow says Fonterra food service sales were also strong during the celebrations.
He says with last year’s celebrations hit by a complete shutdown due to Covid, most Chinese people were happy to be able to travel and catch up with families as part of the festivities.
However, thanks to Covid, things were a bit different this year prompting Fonterra’s China business to change tack.
Chinese New Year celebrations started on the eve of February 12th and continue for several weeks.
“Chinese New Year is the most important time for family gatherings. Traditionally, when people visit family and friends, they bring gifts with a major emphasis on food,” Chow told Dairy News.
“With Covid-19 having an impact on the ability to visit others, Fonterra’s businesses had to change tack.”
For example, Fonterra’s consumer brands team rolled out a Chinese New Year range in early January, themed “A Taste of New Zealand, An Heirloom for the New Year”, to promote Anchor products as New Year’s gifts for family reunions and gatherings.
Chow says the range of products suits the needs of all family members at different age, such as the Anlene Chinese New Year package designed as a gift for elderly relatives.
He says it was relief for Chinese people to be able to celebrate New Year; last year the country was in a Covid shutdown.
But not everyone decided to travel this year. Chow says between February 11 and 17, a whopping 98 million passenger trips were recorded, this was only 76% of trips recorded in 2019.
For some of Fonterra’s ingredients customers, who get products from New Zealand, Chinese New Year sales can make up a quarter of their full-year sales, Chow says.
Special themed products are created for the occasion.
“This year, one of our ‘snacks’ customers have created a sugar-coated flavour of cheese lollipop.
“It was in market for the for Chinese New Year period only, using only dairy ingredients from Fonterra.
“Other customers rolled out Chinese New Year gift packs, which needed to be on shelves around mid-January. It was essential to make sure our supply and delivery of ingredients were in time to produce the Chinese New Year gift packs for our customers.
“With supply chain disruptions from Covid-19, our China business had to make detailed supply chain and shipping plans and keep close communications with customers to make sure their products were delivered in a timely manner.”
Chow says business outlook in China is optimistic with the that country’s government having a good control on Covid.
“The government is quite quick to control the occasional one or two outbreaks we have in the country,” he says.