Kelvin Wickham is winding up 34 years' service to the New Zealand dairy industry offshore. Photo / Supplied
Top Fonterra executive Kelvin Wickham has been walking global roads so long, it's little surprise that his next job after leaving the co-op won't be down under.
Winding up 34 years' service to the New Zealand dairy industry offshore, the Kiwi chief executive of Fonterra's best-performing regional business group in the latest year will head back to Europe to explore job opportunities after a long summer break in this country.
In his own words, Wickham has "pretty much always been on the road".
He was in Germany with former exporter the Dairy Board when Fonterra, New Zealand's biggest business, was formed 21 years ago from an industry mega-merger. Since then he has lived in Singapore, China, Germany and elsewhere in Europe.
As head of the regional group known as Amena (Africa, Middle East, Europe, North Asia, the Americas), he's been living in Amsterdam since late 2019. He joined the industry through the Dairy Board's graduate programme and by 1999 was the exporter's general manager, Singapore. The Dairy Board was rolled into the industry merger.
"I got the bug early on. I really enjoy being out in the world with customers," says Wickham, who has liked "keeping the New Zealand connection" through Fonterra's dairy farmer-owners, but knows executive roles with a global flavour will be scarce back home.
As an executive of the world's sixth-biggest dairy company by revenue, Wickham will have been well-paid for all the globetrotting, but former Fonterra deputy chair Greg Gent reckons it won't have been without personal cost.
"It's been his only career. The industry's had him in postings all 'round the world - the effect on his private life must have been huge, and he did it with a smile."
Gent, a veteran company director, rates Wickham as a "top-class executive".
"He's always had very high staff engagement. People loved working for him - Kiwis and offshore. That was a standout. And he's a big brain. Very, very bright. I couldn't rate him more highly."
Wickham says he'll be considering a new executive role in food, nutrition, health and wellness and biotech.
"If there was a really nice interesting challenge in dairy, I'd look at it because it's my first area. My technical background means I'm reasonably comfortable about biotech."
He has degrees in chemical engineering and management, and a qualification in dairy science and technology.
The Amena region was Fonterra's best-performing area in the 2022 full-year, recording normalised earnings before interest and tax of $527 million, up 57 per cent on the previous year, and an 18 per cent lift in revenue to $8.6 billion.
Fonterra chairman and longtime shareholder Peter McBride says that as a member of the company's senior leadership since 2014, Wickham has been central in a number of strategic choices, especially in the ingredients business.
"Innovation has been a key feature of Kelvin's leadership, including during his time overseeing our China business during a period of phenomenal growth in that region, the launch of the NZMP ingredients brand and the creation of Global Dairy Trade."
McBride says that despite having spent more than three decades working overseas, Wickham is well respected by farmers back home.
Westland Milk Products chief executive Richard Wyeth is another who is quick to note how much of his life Wickham has devoted to the New Zealand dairy industry.
"He's dedicated his whole career to it. All credit to him and his dedication. He should be proud of his tenure. He's certainly one of the smartest guys in the room."
After his three-month summer break down under, Wickham will be heading back to live in what is currently one of the world's more uncertain geopolitical areas. That doesn't deter him?
"No. The whole world has various tensions and issues. You could argue there are other equally central concerns such as the South China Sea or the Middle East. Russia and Ukraine are obviously prominent at the moment, but at any given time this is the world we have.
"Unfortunately, at this time geopolitical tensions look higher than we've had, and crises are coming towards us such as energy and food."
One disappointment for Wickham is what he calls trade fragmentation, with more bipartisan deals being done between countries, and the associated concerns about food security and potential conflict.
"As a global business, we have benefited from largely more open supply chains over the past 20 years with more opportunity to market with preferential tariffs. For example, China's preferential trade agreement with New Zealand and the decreased level of directly subsidised export nations have opened an opportunity [for NZ].
"We've seen that reflected in the improved milk price for our farmers over time as we have been in a position to go into those markets and develop them."
The flip side of the disappointment is the opportunity that fragmentation presents, he says.
"Remember the days when our reliance on [dairy] markets like Venezuela, Mexico, Algeria and Russia was very high and we had to find new markets every year? Now in this new world, it's more about markets that offer the highest payments for New Zealand milk.
"In the changing dynamics there will be more opportunity for markets that value New Zealand milk and its quality more."
If Wickham's private life has been regularly upended by changes in Fonterra's business operations, strategies and chief executives - there have been four in his time - he's not letting on.
"I like the opportunity that comes with change. It's not going backwards. Most of the opportunities I've had have been about growth or setting the foundations for the future. I've always felt a responsibility to build the next stage for the next generation."
Sometimes, though, grasping opportunity can be uncomfortable.
Wickham led the launch of the product auction platform Global Dairy Trade, now considered an essential benchmarker of world dairy prices and very much part of the pricing landscape, but in 2008 seen as highly controversial.
As an auction platform, it was feared that it would bring down prices for New Zealand product. As well, at the time there was a global financial crisis going on.
"It was a pretty traumatic time to launch," says Wickham. "It wasn't so well received by the industry but we've moved through that and it's certainly well-established today. It will continue to evolve and it's great to have seen Fonterra sell two-thirds of the shareholding to the NZX and the EEX [European Energy Exchange] to take it to the next level and continue development of the [dairy] futures market while we transition to a much more transparent milk price, which we needed, and still do."
But Wickham recalls that "it did become a bit lonely for the first six months".
He has seen Fonterra through some awful times.
There was the 2008 food safety scandal in China when SanLu, a company 43 per cent owned by Fonterra, was involved in the deliberate and fatal lacing of baby milk with melamine to raise its protein count. Then there was the 2013 botulism scare, which turned out to be a false alarm but resulted in a wide recall of Fonterra product, reputational harm and customer damages costs. Other issues include the billion-dollar loss from investing in establishing dairy farms in China, since sold or in the process of sale; the $750m investment in Chinese baby milk company Beingmate, $405m of which was lost in 2018. Then in 2018 and 2019, disastrous financial results with heavy losses.
Wickham was heading Fonterra's operation in China - "one of the most enriching and rewarding times I had professionally and personally" - during the botulism scare, otherwise known as "Fonterra's precautionary recall". It hit when he and his team were launching consumer brands in China, building the food service business and the China farms, and while the core ingredients business was booming, by up to 30 per cent a year. It all made for "quite a dynamic and challenging time", he recalls.
From 2019 Fonterra began turning a corner under new chief executive Miles Hurrell, a largely new senior management team, McBride as the new chair, and a new business strategy which sees it retreating to a New Zealand milk focus after years of building overseas milk pools.
But the domestic market heavyweight - after 21 years it still collects just under 80 per cent of the country's raw milk - hasn't entirely shed its reputation for excess, particularly in salaries. Of its 20,000 fulltime equivalent staff, 43 earn more than $700,000 and 8400 earn upwards of $100,000. Hurrell was paid $4.3m in the 2022 full-year. His predecessor Theo Spierings was paid $8m a year until he left in 2018.
Wickham says Fonterra has learned from the China farms and Beingmate investments.
"We're not making investments of that magnitude today. They're not core to what we are good at.
"Definitely, there was that culture of excess but certainly under Miles' leadership there's a clear focus and it's much more consultative. During the other times there was a choice to make. Do you stay chipping away for what you believe and try to influence from the inside, or do you leave? I have chosen for many years to stay and get my voice heard when I can."
He says hearing claims of excessive Fonterra salaries is "always disappointing".
"It doesn't paint the full picture. There are a lot of people really vested in the business, day in and day out. We pay competitively for the market we are in - but not overly. It is a competitive market."
On markets and where our future dairy export challenges will come from, Wickham says New Zealand milk production is not going to grow, but world demand for dairy will.
"That is going to be met by the US and Europe, but Europe is already showing signs of limitation, because of environmental constraints ... so the Europeans are probably not able to expand beyond their domestic requirements as much as they thought five years ago.
"That leaves the US as the player and it has more headroom to grow. They supply close to home but we're starting to see them also in Asia, China and southeast Asia - and that will continue."
Right now, US exports tend to be complementary to New Zealand's in that they are largely commodity ingredients, whereas Fonterra is focusing on differentiated ingredients, food service and consumer product positions, he says.
"But they will develop and learn. It's just part of an ongoing changing dynamic. We've seen the market mix changing. We shouldn't be overly concerned about that. You keep an eye on what the competition is doing but we are not chasing volume.
"When I started, I had to find a new home every year for milk because we had more milk every year. Nowadays, we find the best home. By its nature that means we have more choice.
"If you think of long-term aspirations, which this organisation is, the market mix in 2030 will be different from today ... [but] I think the important markets of scale for us today will still be there barring any major events. China, the US, Japan and parts of Europe are important markets for Fonterra.
"Some wonderful markets, call them the next tier, are emerging. There are great opportunities around the world."
And what do overseas markets think of the Government's aspiration for New Zealand to be a world leader in reducing agriculture emissions by taxing its farmers on their greenhouse gases?
"We start from a very strong position across most markets, particularly the more developed nations ... [but] a lot of governments are taking action, we are not unique in that," says Wickham.
"The challenge is that agriculture is such a prominent player in New Zealand. I'm hoping we can find a solution which recognises we start from a very strong place. It would be very disappointing if we end up having less production and it just moves to higher-emitting countries, which is a danger.
"However, we absolutely have to invest more in reducing the footprint. Our competitors certainly are and they will catch up."
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