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.
Owned by farmers and growers, they drive the economy, by earning the country billions of dollars exporting quality products and by providing services and raw materials behind the farmgate.
In export markets around the globe, these co-operatives carry for the torch for New Zealand’s clean green credentials and their quality consumer products and ingredients are much sought after.
But sadly, these co-operatives aren’t getting the recognition they deserve at home, thanks to a lack of understanding of the co-operative model by politicians and policymakers. There are also misconceptions about the business model that fundamentally goes back to a lack of education about co-ops.
Two years ago, research by PricewaterhouseCoopers (PwC), to showcase the scale of the co-op business community, produced shocking results. Individuals who should know, or need to know, have limited knowledge about the co-op model.
The umbrella body for co-operatives, Cooperative Business NZ (CBNZ), has its work cut out.
As CBNZ chief executive Roz Henry says, this is something that she’s constantly amazed at and working to resolve.
CBNZ hosts multiple engagements with the various political parties and ministries and spends much of its time building an understanding of the co-op business model and co-operative businesses themselves to change their underlying misconceptions.
Henry admits this is required before they can even start to consider the opportunities they present.
Tackling the myths around co-operatives is also a priority for CBNZ.
One myth that needs to be tackled is that the business model is “out of date or non-mainstream”. When one looks at enduring brands like Anchor and Tatua, it quickly becomes apparent this is not the case. They are two of our most successful.
NZ remains one of the most co-operative economies in the world. The stats are staggering: our co-operatives continue to be showcased in the Top 300 World Co-op Monitor, including Fonterra, Zespri, Foodstuffs North Island, Foodstuffs South Island, Alliance Group, Silver Fern Farms and Farmlands.
