Fonterra Shareholders' Fund Prospectus and Investment Statement

SECTION 1
About
Fonterra continued
Regional busineSSes
ANZ
Fonterra’s ANZ business is one of the largest
dairy businesses in Australasia. In New
Zealand, it includes Fonterra’s consumer
operations (Fonterra Brands New Zealand
and Tip Top). In Australia, Fonterra has an
integrated business that includes local milk
collection, dairy product manufacturing and
exporting, and consumer and out-of-home
foodservices businesses (Fonterra Ingredients
Australia and Fonterra Brands Australia).
In New Zealand, Fonterra is a market leader
in all consumer dairy categories, with iconic
brands such as Anchor, Mainland, Fresh’n
Fruity, Tip Top and Kapiti. In Australia,
Fonterra holds a leadership position in the
cheese, yoghurt and dairy spreads consumer
markets. Key brands owned or used under
licence by Fonterra include Western Star,
Bega ® , Mainland and Nestlé Ski ® .
The Australian operation encompasses the
full dairy supply chain and currently collects
approximately 1.7 billion litres of milk per
year from around 1,300 local suppliers.
The manufacturing sites produce a range of
whole, skim and other everyday nutritional
milk powders, advanced dairy nutrition products
and out-of-home dairy nutrition products
(e.g. cheese, butter, yoghurts and cream) for
out-of-home foodservices customers.
The Australian and New Zealand consumer
dairy markets are relatively mature, operating
within a concentrated retail trade structure.
A key aspect of Fonterra’s strategy has been
to manage its product mix by continuously
reviewing its portfolio. For example, Fonterra
divested its white-milk business in Western
Australia in 2011. It has a small remaining
exposure to this category in eastern Australia.
Over the same period, it has acquired leading
brands in higher-growth categories. This is
consistent with ongoing trends towards
consolidation within the Australian consumer
dairy market.
Fonterra’s ANZ out-of-home foodservices
business has a leading position in both
countries, with a model based on providing
services to meet the specialised demands of
customers in bakeries, restaurants, caterers,
hotels and quick service restaurants. Fonterra
provides out-of-home foodservices operators
with a range of innovative dairy products and
recipe solutions, including ready-to-serve
creams, beverages, butter, yoghurt, cultured
dairy, milk, cheese, ice cream and desserts.
Fonterra in Australia 1
ANZ key brands 2 and
product positions 3
mAP OF AUSTRALIA
NZ
AUS
Cheese #1 #1
Yoghurt #1 #2
CONSUMER
PROCESSING
Chilled Spreads #2 #3
Ice Cream #1 N/A
Dairy Beverages #1 N/A
Source: Fonterra
1 New Zealand’s processing and farming operations are described under the heading “New Zealand milk supply and
manufacturing” above.
2 Key brands for milk, yoghurt, cheese, butter and ice cream. Some ANZ brands are used by the Fonterra Group under
licence (such as Bega ® and Nestlé Ski ® ).
3 Fonterra’s market position for each product is determined on a volume basis for the 12 months ending 31 July 2012.
Source: Aztec Information Services Australia market share data (July 2012)
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