Core Viewpoint - Fonterra's decision to merge its consumer products team with the food service team in the Greater China region reflects a strategic response to declining performance and aims to enhance efficiency and reduce costs amid a challenging market environment [1][2]. Group 1: Business Performance - Fonterra's revenue in the Greater China region decreased by approximately 9.94% year-on-year, with food service revenue at NZD 2.377 billion and consumer products revenue at NZD 394 million, the latter showing a loss [1][2]. - For the fiscal year 2024, Fonterra's raw materials business generated NZD 3.598 billion in revenue with a post-tax profit of NZD 128 million, while the food service business earned NZD 2.377 billion with a post-tax profit of NZD 299 million. The consumer products segment reported a loss of NZD 15 million [2]. Group 2: Strategic Adjustments - The merger of the two business units is seen as a necessary adjustment due to the poor performance of the consumer products segment, which has struggled in the direct-to-consumer market [2]. - Analysts suggest that this integration reflects the unique characteristics of the Greater China market, where brand recognition and product overlap are significant challenges. The approach prioritizes brand unity and channel efficiency over a global model [2][3]. Group 3: Market Outlook - Fonterra's food service business in the Greater China region is expected to grow, with a revenue increase of approximately 7.46% year-on-year, contributing over 58% to the overall food service revenue [3]. - The shift in consumer preferences towards Chinese-style pastries and beverages presents significant opportunities for Fonterra's dairy products, such as cream and cheese, in the baking and food service sectors [3]. - Following the merger, the new business unit in Greater China is projected to generate over NZD 2.771 billion in revenue, but challenges such as product overlap and team integration remain [3].

Core Viewpoint - Fonterra's decision to merge its Anchor consumer products team with its foodservice team in the Greater China region reflects a strategic response to declining performance, aiming to reduce costs and improve efficiency amid a challenging market environment [1][4][10] Performance Decline Pressure - Fonterra's revenue in the Greater China region for the fiscal year 2024 was NZD 6.369 billion, a year-on-year decline of approximately 9.94% [4] - The foodservice business generated NZD 2.377 billion, while the consumer products segment reported a loss with revenues of NZD 394 million [4] - The merger is seen as a necessary adjustment due to the underperformance of the consumer products division, which has struggled in the direct-to-consumer market [4][8] Strategic Business Shift - Fonterra announced plans to divest its consumer products business globally, focusing on becoming a B2B dairy supplier, while retaining its consumer products in Greater China due to market considerations [3][4] - The brands involved in the global divestment include Anchor, Mainland, Kāpiti, Anlene, Anmum, Fernleaf, Western Star, and Perfect Italiano [3] Positive Outlook on Foodservice Business - The foodservice segment showed promising growth, with a revenue increase of approximately 4.79% for the fiscal year 2024, and a 7.46% increase in the Greater China region [6] - The Greater China market accounted for over 58% of Fonterra's foodservice revenue, indicating its significance to the overall business [6] Market Opportunities - The Chinese baking market is expected to expand significantly, with projections estimating a market size of CNY 859.56 billion by 2029, driven by rising consumer spending and changing consumption patterns [6] - Fonterra's recent product launches, including cream products tailored for the Chinese market, highlight its commitment to capitalizing on growth opportunities in the foodservice sector [7] Challenges Ahead - The merger of the two business units will face challenges such as product overlap, team integration, and competitive pressures from both international and local players in the B2B market [8][9] - Effective management of brand positioning and product differentiation will be crucial for Fonterra's long-term growth and success in the region [10]

Core Insights - Fonterra's Anka Professional Dairy brand showcased its offerings at the 27th China International Baking Exhibition, emphasizing high-quality dairy sourced from New Zealand and innovative applications tailored to local market trends [1][2] Group 1: Company Strategy - Fonterra aims to provide high-quality, nutritious, and sustainable dairy products, with China identified as a key strategic market [1] - The company has maintained rapid growth in its global food service business and seeks to collaborate with local partners to drive innovation and dairy upgrades in the Chinese baking industry [1] Group 2: Product Innovation - Anka Professional Dairy launched a 10L pack of Anka Baking Cream specifically designed for the Chinese market, addressing the needs for large-scale production and diverse packaging specifications [2] - The brand showcased its products through three thematic areas: "Natural Source," "Quality Choice," and "Innovative Flavor," highlighting the journey from farm to table [1][2] Group 3: Market Engagement - The exhibition featured a scale model of a Fonterra milk tanker, equipped with advanced onboard systems for route planning and milk source traceability, ensuring quality assurance [1] - Anka Professional Dairy collaborated with Euromonitor to release the "2025 China Baking Trends Report," further engaging with market insights [2]

Core Insights - Fonterra's brand Anchor Professional Dairy showcased at the 27th China International Bakery Exhibition, emphasizing high-quality dairy sourced from New Zealand and innovative applications tailored to local market trends [1][2] - The company aims to enhance collaboration with local partners to promote dairy product upgrades and support the high-quality development of China's food and baking industry [1][3] Group 1: Company Overview - Fonterra is a leading global dairy company from New Zealand, committed to providing high-quality, nutritious, and sustainable dairy products [1] - Anchor Professional Dairy focuses on delivering premium dairy ingredients and application services to meet diverse customer and consumer needs in the baking and food service sectors [3] Group 2: Market Trends and Innovations - The exhibition featured an immersive experience of New Zealand's grass-fed farming environment, highlighting the natural advantages of New Zealand's dairy production [2] - Anchor Professional Dairy launched the "2025 China Baking Trends Report" in collaboration with Euromonitor, analyzing key industry development trends and showcasing nearly 50 products across five categories [2] Group 3: Future Outlook - The company plans to continue collaborating with local partners to seize industry development opportunities, deepen dairy product upgrades, and lead healthy dining trends while supporting sustainable industry growth [3]