Fonterra has recently launched a new application centre in Shenzhen, China as part of its strategy to introduce New Zealand milk to Chinese customers in innovative ways.
An application centre is where new products are tested and developed, and the co-op already has 4 in China. However, the latest addition will focus on beverage applications. The co-op’s other centres mainly focus on developing food products such as steamed dumplings with mozzarella, cream that does not require refrigeration, and cream cheese lollipops.
Fonterra Greater China Chief Executive Teh-han Chow recognised the potential of combining the co-op’s dairy products with the rich flavours of Chinese beverages. The centre will provide a new platform to explore the use of dairy products in beverages and provide innovative solutions to meet the needs of Chinese consumers.
Chow said, “The new application centre is also an important part of the co-op’s global R&D system. Indeed, the success of our food service business in China is partly driven by the application centres, which allow us to better support our customers and better understand Chinese consumer preferences by picking up latest trends in the market.”
Since the Covid-19 pandemic, Chinese consumers have become more health conscious and the China government is also pushing for its citizens to have a daily dairy intake of 300-500g. In 2022 alone, a total of 1434 new kinds of non-alcoholic beverages were launched by key tea and beverage brands in China. Chow added that Shenzhen is the perfect location for the new centre, as many of the country’s leading beverage customers are headquartered there.
The new centre is Fonterra’s 2nd facility in the Pearl River Delta region, which is home to about 86 million people and represents 12% of the country’s GDP. The other facility is in the city of Guangzhou, a short distance from Shenzhen, but it is focused on bakery applications.
Fonterra’s food service business supplies bakeries, tea houses, coffee shops, restaurants and grocery retailers like convenience stores and supermarkets with its specialist dairy products since 2013.
Fonterra aims to grow its presence in China, Southeast Asia and the US by the 2030.