New Zealand’s Fonterra Co-operative Group Ltd. last week announced “a step-change in its strategic direction,” with plans to sell off its consumer businesses and concentrate on business-to-business sales as a dairy ingredients supplier.
The group doesn’t appear to have any consumer products in North America anymore, although Anchor butter and cheddar at one time were available. Here, the group operates as Fonterra America, with headquarters in Chicago. Globally, its ingredients business is known often as NZMP, formerly New Zealand Milk Products.
Following a strategic review, “We believe we can grow further value for the co-op by focusing on being a B2B dairy nutrition provider, working closely with customers through our high-performing Ingredients and Foodservice channels,” said CEO Miles Hurrell. “In this context, we are exploring divestment options for our global consumer business as well as our integrated businesses Fonterra Oceania and Fonterra Sri Lanka.”
Fonterra’s global consumer business has grown over the years since Fonterra was formed and is performing well, the company said. Its brands include Anchor, Mainland, Kapiti, Anlene, Anmum, Fernleaf, Western Star, Perfect Italiano and others. The consumer business was heavily concentrated in New Zealand and Australia. Foodservice accounts are not included in the sale.
Collectively, those businesses used approximately 15% of the co-op’s total milk solids and represented approximately 19% of operating earnings in the first half of FY24, “with our consumer businesses delivering strong underlying earnings.”
“We have also received unsolicited interest in parts of these businesses, making now a good time to consider their ownership,” said Hurrell. “We expect a divestment process to take at least 12 to 18 months.”
