Shanghai innovation centre will tap into Chinese dairy demands - Fonterra

By Mark Astley

- Last updated on GMT

Related tags: Milk

The Innovation Centre opening is Fonterra's latest step in solidifying its presence in the Chinese dairy market. (Photo copyright: Fonterra)
The Innovation Centre opening is Fonterra's latest step in solidifying its presence in the Chinese dairy market. (Photo copyright: Fonterra)
Dairy giant Fonterra has announced the opening of a new Shanghai-based innovation centre, in its latest effort to tap into Chinese demand for new, innovative dairy products.

Staff at the new facility will focus on the development of innovative dairy products and premium ingredients to meet the demands of Chinese consumers, and the country’s increasing appetite for dairy products.

The New Zealand-based cooperative has hired seven new staff to assist with technical innovation, and installed a range of equipment.

Fonterra was unable to disclose the cost of the opening.

The opening comes just months after Fonterra launched its Group Strategy Refresh, which outlined the firm’s increasing focus on emerging dairy markets such as China.

According to the company, Chinese demand for dairy is expected to double to around 70bn litres of milk per year by 2020.

Changing consumer needs

“The centre is focused on being able to tap into changing consumer needs in China more quickly and developing products suited specifically for these needs,” ​Fonterra China president Phillip Turner told DairyReporter.com.

According to Fonterra, people across China are eating or drinking dairy for different reasons – with nutritious, convenient and infant-targeted products topping the list.

“We expect to be able to test the application of new premium ingredients such as dairy proteins, in specific products for our customers. We also expect to be able to come up with a range of new recipes, product modifications and other solutions for our foodservice customers to support the growth of the out of home dining industry,” ​said Turner.

“Among the new products to be tested at the innovation center will be all-natural yogurts and beverages, produced without additives, using milk ingredients, sugar, culture and fruit and one of the products that we’re currently testing at the centre with our Chinese customers is natural, additive free Greek yogurt.”

“Fonterra’s new innovation centre in Shanghai will help us develop products to cater for these diverse needs,” ​he added.

Emerging market focus

The innovation centre unveiling comes just months after the firm launched its Group Strategy Refresh, which outlined the firm’s new emerging market approach.

The strategy, which was launched in March 2012, was built on the back of several social and economic factors as well as a projected increase in global demand for milk.

The strategy included a “strong push on the fast-growing emerging markets of China, ASEAN and Latin America.”

In April, Fonterra unveiled its latest step in increasing its presence in China - the development of two new large-scale dairy farms in the Hebei province.

“We have a long history in China and we are committed to the further development of the local Chinese dairy industry. We want to establish an integrated milk business in China that processes high quality milk from Chinese farms into dairy nutrition for Chinese customers and consumers,” ​said Fonterra CEO Theo Spierings at the time.

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