"We have been known as a company that has provided the world with powders and butter - closer to the commodities-style of product," said Priem, who is Fonterra's managing director for Greater China and managing director Asia, Middle East, Africa.
"Fonterra has been, I would say, rather late by standards of multi-national companies to realise that there probably should have been more focus on branded products and Food Service products earlier on, for the very simple reason that there is more value to be obtained out of each litre of milk sold in that type of business than there is to be made out the commodities-type business," he said.
"The more value that you add to the functionality of the product, the higher the price at the retail level and the higher the margin is for Fonterra,"
On that basis, Fonterra was looking at what it needed to do to catch up.
The company needed to sort out where it could get to number one or number two in selected categories, having already secured leadership positions in Malaysia, Sri Lanka, Chile and New Zealand.
Bearing in mind Fonterra was not able to "conquer the world" it identified strategic markets of China, Indonesia, Australia and Brazil as where it wanted to number one or two market positions. It has also identified the Philippines, Vietnam, Thailand and Myanmar as important markets.
China is the company's top strategic market and it has already made inroads - 80 per cent of food outlet pizzas have a Fonterra cheese topping.
The Food Service business was clear standout in Fonterra's latest result, thanks mostly to a record performance from key markets in Asia and Greater China.
"The value is coming more out of the food service business," Priem said. "Food service is clearly the biggest contributor to the value growth and volume growth we are generating in my market."
The Food Service arm provides Fonterra customers with tailored products and solutions that support their business needs, covering the specialised demands of customers in quick service restaurants, fast food outlets, cafes, restaurants, hotels, bakeries, commercial and institutional catering, and manufacturing.
The Ingredients side supplies the world's leading food companies with standard dairy ingredients such as milk powders and butter, specialised proteins for sports and nutritional beverages.
In Asia, Food Service delivered combined volume growth across the region of 11 per cent, mainly in butter, UHT cream and cheese.
Priem's patch consists of Mainland China, Hong Kong and Taiwan, but since the departure of Pascal De Petrini, managing director of the co-operative's Asia-Pacific, Middle East and Africa business unit, he has taken on that role as well, splitting his time between Singapore and Shanghai.
Priem also sits on the board of Beingmate, the Chinese infant formula company that is now 18.8 per cent owned by Fonterra.
He said distribution of Fonterra's Anmum infant formula through the Beingmate network was under way, with the first shipments having arrived in China in June.
