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John Wilson DairyNZ Farmers’ Forum
Confidential to Fonterra Co-operative Group
May 2014
Page 2 Confidential to Fonterra Co-operative Group
It all starts here
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Times have changed….
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Different ages, different needs
In Tier One cities
in China, 55-65
year olds spend
half their income
on food.
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130 million residential broadband accounts
Spend 40% of time on social media
US$190 million in e-tail sales (2012)
120% compound annual growth since 2003
6 million + merchants online
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4.2 billion consumers
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Where the demand is
Demand from
emerging markets
will grow by an
estimated 2% a year
through to 2022
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GDT price index
?
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Globally relevant
MENA
2%
4%
10%
India2
7%
7%
China
4%
2%
LATAM
2% 2%
ANZ
1%
Nth America
1%
Europe
<1%
Outlook to 20201
ASEAN
2-3%
4%
Demand Growth Supply Growth Demand Volume Supply Volume
1% <1%
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China supply gap widens
0%
20%
40%
60%
80%
100%
0
10
20
30
40
50
2000 2002 2004 2006 2008 2010 2012 2014F
Mark
et S
hare
B
illi
on
Lit
res M
ilk E
qu
ivale
nt
Domestic Production
Net Imports
Import Market Share
Chinese Dairy Consumption – by Product Origin
Source: China Dairy Association, China Customs, Rabobank estimates and forecasts, 2014
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Strategy priorities STRATEGIC PATHS
Selectively
invest in milk pools
Alignment of
business and organisation
6
7
Develop selected leading position
in paediatrics & maternal
Grow our
position in Anlene
Deliver on
foodservice potential
Build and grow beyond our
current consumer positions
Optimise NZ milk
1
2
3
4
5
EVERYDAY
NUTRITION
OUT-OF-HOME
ENABLERS
ADVANCED
NUTRITION
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Turning the wheel to add value
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Global milk pools
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Consistent capacity investment
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A strong Co-op –
getting stronger