Why Fonterra accepted defeat in the dairy aisle
OPINION: Fonterra's sale of its consumer dairy business to Lactalis is a clear sign of the co-operative’s failure to compete in the branded consumer market.
Whether it's tackling climate change, cleaning up our waterways or reducing the use of plastic packaging, the New Zealand dairy industry, and food producers in general, are grappling with huge challenges around sustainability.
Globally, food production systems are facing a transformational challenge. New Zealand dairy farmers feed around 40 million people globally today. But as the world grows, food producers around the world will need to find new ways to feed 10 billion people by 2050. And we need to meet these demands while protecting and restoring the environment.
This is being driven by consumers becoming increasingly discerning when it comes to the products they buy and the food they eat.
Recent market research has found that 75% of millennials – those aged 20-35 – are altering their buying habits with the environment in mind and 34% of baby boomers are willing to change what they buy if it means purchasing more sustainable products.
These present unique challenges for New Zealand food producers: and Fonterra is no different. There’s no easy or quick fix.
As a cooperative, we’re deeply invested in New Zealand’s success and take a long-term view. We’re a business built from farms passed down from one generation to the next, and that means ensuring the land and natural bounty of our country are preserved for generations to come.
Agriculture depends upon a stable global climate and is particularly impacted by environmental effects. Our farmers are close to the land and will feel climate change hard.
That’s why we’ve put sustainability at the heart of our co-op’s new strategy.
This means doing what’s right and doing what’s expected of us for the long-term.
It means producing dairy nutrition in a way that cares for people, animals and the land, and brings value to our communities.
This is not only the right thing to do but has become increasingly important as more consumers choose environmentally-friendly products.
As a country, New Zealand has got a head start.
We are known world over for producing some of the best food in the world, and balancing this production with our green, clean reputation.
We’ve got innovative people working to reduce our environmental impacts, from cutting water use through to researching world-leading science to reduce greenhouse gas emissions.
But no one can do this alone. Tackling complex issues like climate change, improving biodiversity and freshwater, and addressing plastic waste will take a collective effort by government, local and regional councils, the business community, scientists, iwi, community groups and consumers. But by working together and focusing on ambitious common goals, the power of collaboration can find solutions.
With New Zealand’s natural environment and some of the world’s most efficient farmers, we’re well positioned to lead change.
We must find ways to achieve food and agriculture sustainability for New Zealand and our export markets.
Fonterra doesn’t pretend to have all the answers and we’ve got a long way to go on our own sustainability journey but believe we can make positive change.
We’ve committed to doing our bit.
• Carolyn Mortland is Fonterra Director of Sustainability
