Fonterra enjoys fast food boom through recession

Waikato Times

DAIRY DREAM: Hayley Kelsey makes coffee at a Starbucks store. The coffee chain is one of a number of stores that can't get enough of Fonterra's cheese and milk.

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The fast food industry's appetite for Fonterra's dairy products doubled over the past three years.

The likes of Domino's Pizza, McDonald's, Pizza Hut and Starbucks could not get enough of Fonterra's cheese and milk.

"In that space – our quick service restaurant business – we have doubled our business in the last three years," said Rene Dedoncker, director of Fonterra's $1 billion global food services business.

"It's in excess of $500 million. Everything else – sales to cafes, restaurants and hotels – has been growing at about 20 per cent per annum." Fast food outlets reported growth during the height of the recession, as cash-strapped consumers switched from fine dining experiences to cheaper fast food.

Mr Dedoncker, who looks at the world as the dairy farmer's oyster, is pleased with the way Fonterra has made the most of opportunities. But two years ago he felt it was missing out on its potential because nearly every market in which Fonterra was active had its own food services business disconnected from other parts of the business. They were combined two years ago after Mr Dedoncker suggested amalgamation.

Fonterra had about 20 per cent of the $5b Asia-Pacific dairy market.

In the $65b worldwide market, about 50 per cent of the food dollar was spent out of the home, Mr Dedoncker said.