Did you know that 5 billion pizzas are sold every year around the world? Our cheese is on a lot of them, with restaurants like Pizza Hut choosing New Zealand’s milk products. We put the spotlight on foodservice and sustainability initiatives by our leading customers.
In 2020 the foodservice industry shut down overnight as COVID-19 raced around the world, keeping people indoors and away from restaurants and eating out. Fonterra quickly moved foodservice products to the consumer channel (e.g. supermarkets) to take advantage of the surge in home cooking that swept across nations.
But today, foodservice is back. The Co-op’s first half for financial year 2024 saw our foodservice business earnings up year on year, with China being a significant driver.
Our Foodservice business
With our industry-leading brand, Anchor Food Professionals, we have a reputation for high-performing, quality New Zealand grown foodservice products. Think of the dairy products found in commercial kitchens, bakeries, pubs, clubs, and restaurants all around the world.
One aspect of this business is Quick Service Restaurants (QSR), with some of the largest restaurant brands in the world – McDonalds, Pizza Hut and KFC – using our dairy, and particularly our cheese.
Quick Service Restaurants leading demand
Globally pizzas and burgers dominate the QSR sector with more than 50% market share1. In fact, more than 5 billion pizzas are sold worldwide each year2 – that’s around 160 pizzas sold per second!
There are huge opportunities in this industry, says Hailey Ryan, General Manager for Fonterra’s QSR business.
“The Quick Service Restaurants sector is growing annually at around 8%, and our business in this sector is growing at a similar rate with the customers we supply. These customers take a strategic partnership approach with a strong focus on supply certainty, quality, and sustainability, which is why we are a trusted supplier.”
Yum! Brands and low carbon dairy
One of the Co-op’s major customers is contributing to this growth. Yum! Brands is one of the world's largest restaurant companies with more than 58,000 restaurants in over 155 countries and territories, generating $NZ11 billion in total revenue. Its brands include Pizza Hut, KFC, Taco Bell and The Habit Burger Grill.
“Innovation is important to this part of the business because our Quick Service Restaurant customers want products that help them to differentiate and meet changing consumer tastes. A great example of this is our mozzarella, which recently won the International Cheese and Dairy Award for ‘Longest Cheese Stretch’. It helps deliver the indulgence that consumers are looking for when they purchase pizza,” Hailey says.
“Keeping ahead of customer and consumer trends is critical, and today, Pizza Hut tops its pizzas with our mozzarella across 30 countries in the Middle East, Latin America, and Asia – including China.”
Sustainability high on the menu
Consumers are becoming increasingly selective around where and how their food is produced and demand for sustainably produced food is front and centre.
Yum! has set science-based targets with initiatives and investment in place to achieve net-zero by 2050.
Beth Kennedy, who is responsible for Pizza Hut’s global supply chain and quality, says cheese is one of its most important categories and sourcing low carbon dairy is a high priority for the company.
“Our customers love cheese and buy a lot of it. We are defined by our Good Growth Strategy, which means we’re committed to growth, but we’ve got to do this in the right way for our planet, our people, and our partners. The more we grow, the more cheese we’ll need, which is why our partnership with Fonterra and its low carbon dairy is a critical factor in our aspirations,” she says.
Sustainability is a critical part of the Fonterra and Yum! partnership, and together, we are piloting the use of Trev farm reporting software on a small number of farms near our Clandeboye site. The partnership aims to provide data and insights to demonstrate how incremental changes made on farm can have an impact on milk production efficiency and in turn lower the carbon footprint of the milk produced.
“Our approach to sustainability and specifically the level of data that we have, gives Yum! and other customers the added confidence to continue partnering with us,” says Hailey.
Fast facts
- Yum! has more than 58,000 restaurants in over 155 countries and territories
- 5 billion pizzas sold worldwide each year2 – that’s around 160 pizzas sold per second
- Yum! aims to achieve net-zero by 2050
1 https://aaronallen.com/blog/pizza-industry
2 IMARC Group. Fast Food Market Report 2024-2032. Imarcgroup.com