Core Viewpoint - Fonterra's Greater China division is undergoing a restructuring by merging its consumer brand team with its food service team to optimize operations and enhance synergies [1] Group 1: Business Operations - The merger aims to streamline operations and create greater collaboration between the consumer and food service segments [1] - Fonterra's food service business significantly outperforms its consumer brand business in terms of revenue and profit [1] - In FY2024, Fonterra's raw materials business generated NZD 3.598 billion (approximately RMB 15.338 billion) in revenue, with a net profit of NZD 128 million (approximately RMB 546 million) [1] - The food service business reported revenue of NZD 2.377 billion (approximately RMB 10.133 billion) and a net profit of NZD 299 million (approximately RMB 1.275 billion) [1] - The consumer products segment had revenue of NZD 394 million (approximately RMB 1.68 billion) but incurred a net loss of NZD 15 million (approximately RMB 6.3945 million) [1] Group 2: Market Competition - Fonterra faces intense competition, particularly from domestic brands like Miaokelando, which reported a 14% year-on-year revenue growth in its food service segment for 2024 [2] - The rise of domestic cheese brands has led to reduced costs for local cheese production, increasing competition in the food service market [2] - A price war in the food service sector is exerting downward pressure on prices, affecting Fonterra's profitability [2][3] Group 3: Profitability Concerns - Fonterra's food service business has seen a decline in gross profit margins in recent quarters, indicating potential challenges ahead [3] - The ongoing market changes suggest that Fonterra's adjustments may be just the beginning of a broader strategic shift [4]

Group 1 - Fonterra's Greater China region is undergoing a restructuring, merging its consumer brand team with its food service team to optimize operations and enhance synergies [1] - In the Chinese market, Fonterra's food service business significantly outperforms its consumer brand business, with food service revenue of NZD 2.377 billion (approximately RMB 10.133 billion) in FY2024, compared to consumer products revenue of NZD 394 million (approximately RMB 1.68 billion) [1] - The food service business is considered Fonterra's profit driver, generating a tax profit of NZD 299 million (approximately RMB 1.275 billion) in FY2024, while the consumer products segment reported a tax loss of NZD 15 million (approximately RMB 63.945 million) [1] Group 2 - Fonterra is facing intense competitive pressure, particularly from domestic brands like Miaokelando, which reported a 14% year-on-year revenue growth in its food service series, reaching RMB 1.31 billion in 2024 [2][3] - The ongoing price war in the food service sector is exerting downward pressure on prices, affecting Fonterra's profit margins in its food service business, which has already seen a decline in gross margin [4] - The adjustments being made by Fonterra may be just the beginning in response to market changes and competitive dynamics [5]

Group 1 - Ekoniva, Russia's largest dairy group, has opened its first brand store in Xi'an, Shaanxi Province, China, on May 28, 2025, primarily selling natural dairy products and coffee beverages [2] - Ekoniva began supplying dairy products to China in the summer of 2020, marking the start of its market entry [4] - The company established a representative office in Xi'an in September 2023 and announced plans for railway transport of products starting in January 2024, with the first shipment being ultra-high-temperature sterilized milk [5] Group 2 - Ekoniva plans to promote its products through social media and e-commerce platforms, offering a range of ultra-high-temperature sterilized milk and cream with varying fat contents, and aims to increase its export varieties, focusing on semi-hard and hard cheeses [6] - The domestic dairy market is facing significant pressure due to declining milk prices, with a report indicating that 90% of the industry is experiencing losses, and the average price of fresh milk has dropped by 10.5% year-on-year [9] - Despite a previous surge in demand for Russian products in China, the sustainability of consumer interest in Ekoniva's offerings remains uncertain, as some consumers have expressed that the products lack distinctiveness [10]