The UK sits in our Atlantic region, which was formed in August 2022 as part of Global Markets and includes Europe and the Americas - North, Central and South. Our European business is headquartered in Amsterdam and is led by Mike Bones, Managing Director - Europe.
The UK's demand for milk exceeds its production, which reached nearly 15 billion litres in 2022/23, and it is a net dairy importer with exports being just two thirds of imports1, representing a significant opportunity for Fonterra.
Trade in the UK
New Zealand's UK Free Trade Agreement went live last May and is widely seen as one of New Zealand's most comprehensive Free Trade Agreements, allowing high quality market access for the first time in over 50 years, when the UK was one of New Zealand's largest export markets.
Re-entering the market after 50 years sees the team focused on being lean and simple, and choosing the right partners and sales channels to maximise the opportunities for our dairy ingredients.
"The UK is the world's second largest dairy net importer, with both strong local demand as well as pull from customers that export," says Mike.
"So far, we've contracted 10,000 tonnes of product under the Free Trade Agreement, with most of this being cheddar from our Hautapu and Stirling sites. Butter, organic skim milk powder and proteins make up the remainder of the business and reflect the diverse opportunities available to Fonterra as a result of regaining access to the UK."
A number of wins at the recent International Cheese & Dairy Awards in Cheshire, England, are proof of how our quality and innovation are world leading and highly regarded by the local industry.
"Doors are opening for us in the UK thanks to Fonterra's world leading dairy sustainability credentials, enabling us to partner with customers who value the goodness of New Zealand dairy," says Mike Bones.
Building strong partnerships
"The UK is a market that continues to surprise us with the breadth of opportunities, and we've done well to find two incredible partners to take our New Zealand dairy into the market. Our ambition is to become the preferred premium imported dairy supplier in the UK by 2030 and build a business that delivers sustainable returns.
"So, phase two for us is about extending some of the fantastic global relationships that we have in the UK and building genuine and transparent partnerships that we know we will provide benefits to our customers and consumers in the UK while also returning value back to our farmer owners."
Fonterra in Europe
The Co-op's European business is a true regional hub. It provides sales and customer support to some of the world's largest dairy, nutrition and food companies, including our global strategic customer, Nestlé. It also exports products to and from New Zealand, and around the world.
Europe is currently the largest market for functional Whey Protein Concentrate sales, with the high value ingredient used in cultured foods applications, such as high protein yoghurts and meal replacement beverages. Whey Protein Concentrate is sourced from New Zealand, and also theCo-op's Heerenveen factory in theNetherlands, 90 minutes' drive north of Amsterdam.
1. https://www.statista.com/topics/6147/milk-market-in-the-uk/#topicOverview