Fonterra’s Waitoa UHT site is celebrating 10 years of growth, thanks to increasing demand for the Co-operative’s Foodservice offerings.
The site’s hero product, 1 litre UHT Whipping Cream, has seen a continued increase in demand since it first came off the line in 2014, primarily driven by China.
This Whipping Cream is found in approximately 400 million beverages and 260 million cakes in Chinese bakery stores each year.
To meet demand, the Co-op will open its sixth China Fonterra Application Centre (FAC) in Wuhan later this year, expanding capacity for innovation across its Foodservice business. These FACs play a pivotal role in creating new products tailored to local preferences in taste, culture, and trends.
The formula for Waitoa's UHT Whipping Cream was developed over two decades ago at Fonterra’s Research and Development Centre (FRDC) in Palmerston North by experts in dairy science and innovation. The product is renowned for its stability, producing consistent rosettes in cream cakes and tea macchiato toppings.
Fonterra’s Foodservice business began in 2013. Alongside UHT cream, top selling Foodservice products include cream cheese and mozzarella.
In FY23, the revenue for Fonterra’s Foodservice business was $3,865 million, up 17% compared to FY22. EBIT increased from $117 million to $334m over the same timeframe while Return on Capital rose from 5.5% to 15.7%.
More recently, the Co-op’s third quarter results for FY24 showed that Foodservice has already surpassed the $3,000 million mark in revenue.
Over the last 10 years, Fonterra has invested in the Waitoa UHT site’s capacity to meet this growing demand. In 2017, a $162 million investment more than tripled the site’s processing capacity. The following year the site also underwent a storage expansion, creating an additional 4,000+ pallet spaces to enable continued growth of UHT cream in China Foodservice.
Fonterra’s Foodservice business is also growing in Southeast Asia, particularly in the bakery channel, with the emergence of specialty bakery and lifestyle cafes across the region. Like China, in-market chefs assist the team in developing new local applications based on consumer needs.
Waitoa UHT is a large employer for the region, growing from 80 employees in 2014 to more than 200 in 2024. During peak season, the site processes up to 800,000 litres of milk and cream every day.