Divestment means Fonterra can focus on its strengths
OPINION: Fonterra's board has certainly presented us, as shareholders, with a major issue to consider.
The co-op's director globla sustainability, stakeholder affairs and trade Simon Tucker, part of the delegation headed by Prime Minister Christopher Luxon, says quality, food and technology come to mind when thinking about Japan.
"And these are well aligned to what is key to our business in Japan, which is using our dairy science expertise to help meet a growing demand for foods that support healthy living," says Tucker.
"Our grass-fed dairy plays particularly well into products designed to promote healthy aging, which with Japan's shifting demographics, is a large and growing opportunity for Fonterra," he adds.
Fonterra's protein ingredients are popular with its Japanese custoemrs, many of which have been specifically developed for the Japanese market or as individual customer applications. The co-op actively works with customers, technical experts and its team at its Research and Development Centre to meet exact customer requirements.
Any visitor to Japan who steps into a 7-Eleven store has a good chance of finding protein fortified drinks and yoghurts containing Fonterra farmers' milk.
Fonterra's grass-fed dairy plays particularly well into products designed to promote healthy aging, which with Japan's shifting demographics, is a large and growing opportunity for the co-op.
Research shows Japanese consumers are willing to pay a premium of up to 50% for products that have added health and nutrition benefits, and with an aging population, there is an increasing appetite for products that support wellbeing, mobility and combat cognitive decline.
Fonterra is well placed to meet this growing demand. Its proteins are designed to help people maintain muscle mass for better quality of life, its dairy lipids help improve mood and its probiotics support immunity and digestion.
Japan is also one of Fonterra's largest markets for cheese, which it sells to customers through its ingredients channel.
As the world's fourth largest economy and New Zealand's fifth largest export market, Japan presents a lot of opportunities in science, innovation, food and agriculture.
For Fonterra, this means partnering with customers to make innovative, high-quality ingredients to meet Japan's growing demand for dairy nutrition.
