Fonterra’s chief executive Miles Hurrell has turned the co-operative around. In this episode he discusses the dairy giant’s transformation, in the kitchen.
Fonterra was receiving unsolicited bids to buy its consumer division before it put the well-known Anchor milk and butter, Mainland and Kāpiti cheese brands officially up for sale.
The major dairy exporter is now moving forward with a trade sale or public listing of its consumer division, which encompassed all of its retail brands.
“We’re going to run both of those [sale options] in parallel, at pace, and see what comes out of it,” Fonterra’s chief executive Miles Hurrell told Markets with Madison.
He said the co-operative, owned by its dairy farmers, had spoken about selling the consumer division internally a handful of times over the years, and he and the board finally acted on it this year.
“It’s a conversation that’s been brewing for a while.
The other was ingredients, where it extracted nutrients out of milk such as casein protein or probiotics, and supplied them to other businesses to add to their products.
“If we talk ingredients for a start, that includes our manufacturing operations, and the opportunities there are endless.”
Hurrell said extracting more value from New Zealand milk was necessary as the amount the country produced was declining.
“We’re in a situation now where that milk is not flowing at the same rate it used to be, in terms of the growth.
“And our customers are really starting to understand the value of what we produce here.
“So that’s the untapped potential I see, linking those two together, a scarce supply here in a New Zealand context, with growing demand globally and bringing those two together with how we produce it, what we produce, [and] the technology that comes with it.”
Watch Miles Hurrell candidly discuss the dairy giant’s major divestments – and how long he may lead the strategy for – in the last episode of Markets with Madison for 2024 above.
Get investment insights from executives and experts on Markets with Madison every here on the NZ Herald, on YouTube and wherever you get your podcasts. The show will return in February 2025.
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Disclaimer: The information provided in this programme is of a general nature, and is not intended to be personalised financial advice. We encourage you to seek appropriate advice from a qualified professional to suit your individual circumstances.
Madison Reidy is host and executive producer of the NZ Herald’s investment show Markets with Madison. She joined the Herald in 2022 after working in investment, and has covered business and economics for television and radio broadcasters.
