A closer look at Foodservice and its growth potential

As the Co-op looks to strengthen its business-to-business (B2B) channels, Foodservice continues to play a key role in driving value across the organisation.

Foodservice generally refers to the business of preparing and serving food and drinks outside of the home. This includes restaurants, cafes, bakeries, beverage outlets, quick service restaurants, and everything in between.

Over the years, the Co-op has built a strong, high-performing Foodservice business. In terms of return on capital, the three-year average for Foodservice is 15%. This compares to 12% for the Ingredients division and 1.4% for the Consumer brands.

The Co-op has created some new materials that better explain this value and growth potential of B2B channels like Foodservice. These include a video offering an overview of the channel and how the Co-op is driving stronger returns through it.

Foodservice products are specially designed for chefs, bakers and foodservice professionals to help grow our customers’ businesses. They also help grow the Co-op’s earnings, which flow through to shareholders and unit holders in the form of dividends.

The business is key in terms of diversification, too. The Co-op can quickly move milk into the products and markets that will get the best returns, as well as offering global scale. Chefs and technical experts at our network of in-market application centres work with customers to identify new product opportunities.

The Foodservice business already supplies high-performing dairy products and solutions to leading kitchens and bakeries in more than 50 countries around the world.

Our cream range features in more than 400 million drinks and 260 million cakes every year. We also produce enough cheese products for about three billion burgers and 300 million pizzas annually, and enough butter sheets to make more than 500 million croissants.

Key markets include Greater China and Southeast Asia, although we’re using what we’ve learned in those regions to ramp up growth in other markets, such as Mexico, Japan, Korea, Taiwan, Dubai and Saudi Arabia.

We’re investing in our manufacturing capacity, including building a new UHT cream plant at our Edendale site. This investment will allow the Co-op to increase production capacity for high-value products, meeting growing demand and delivering further value for our farmer shareholders.

Ultimately, Foodservice is one of the most valuable things we can do with your milk.