Fonterra teams up with America's Land O' Lakes

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Fonterra has signed a five-year sales and marketing agreement with one of America's biggest dairy co-ops - Land O'Lakes - to distribute its foodservice products there.

"We've entered into a sales and marketing agreement which, in essence, will open up a significant amount of more doors for us in the US," Fonterra Global Director for Foodservice Paul Harvey told The Country Sport Breakfast's Lee Piper.

The US was not only the largest dairy foodservice market in the world, but also the most competitive, Harvey said.

Land O'Lakes worked with all major US national and top regional foodservice distributors and this would help enable potential national distribution of Fonterra products.

Although Fonterra had been in the US foodservice market for a number of years, breaking into it at any great scale had been a challenge and required a new approach, Harvey said.

"The partnership with Land O'Lakes will give us that access to their significant, well-established distribution network and their significant, large customer base."

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Land O'Lakes would help Fonterra distribute, promote and sell its cooking creams and cream cheese - and in the future - expand its relationship into other categories, such as cheese products.

Fonterra's reputation for developing innovative dairy products played a big part in securing the partnership, Harvey said.

"When we started to showcase that to Land O'Lakes [and] overlaid it with what they bring to the table there was a huge amount of confidence that they could grow our products significantly with their networks in place."

It was clear Fonterra would diversify its foodservice markets when it launched its value focused strategy last year, Harvey said.

"We're now doing more with like-minded partners and leveraging what we believe is our intellectual property and our tangible assets, and making the most of the capital investments of our own as well."

"So this is a great example and one that we're really looking forward to rolling out in the US, and hopefully in other markets in the future."