Is it just me or is Fonterra
undergoing a remarkably rapid culture shift in a very short space of time?
Last year I attended the Ashburton leg
of the Fonterra Financial Results Roadshow: quite apart from the delicious
lunch and sneak preview of the new Whittaker’s ice cream, it was a chance to
hear then interim-CEO Miles Hurrell and
new board chair John Monaghan deal with the unpleasant reality of Fonterra’s
first ever financial loss.
Miles especially came across as
humble, honest and realistic, and those are attributes in direct contrast to
the brash and overly optimistic Fonterra leadership we are used to seeing. The
way Miles spoke to farmers, the manner in which he answered questions and the
way in which he took responsibility for Fonterra’s performance instead of
taking the not unreasonable position that he was new to the role all point to
this being the nature of the man rather than some PR makeover.
During the roadshow Miles made a
series of promises to farmers, not least of which was a top to bottom review of
the business. The speed with which this has happened can be seen in the
restructuring that has already occurred within the co-op and also in Fonterra
disentangling itself from the Beingmate joint venture in Australia to take full
control of the Darnum plant.
The DIRA submission, which I covered
last month, is another example of Fonterra’s new found realism; rarely have I
seen such plain and simple language from them when dealing with such a complex
topic. They stuck to the facts and backed themselves with solid data, releasing
the whole submission for public scrutiny. Contrast that with Synlait who have
selectively released parts of their submission and used the process as an
opportunity to take pot-shots at the competition. I’m not entirely convinced
that whining in the media that Fonterra pay their suppliers too much is the way
to win support, or to keep suppliers for that matter.
There are signs too that Fonterra is
finally coming of age and seeing itself as more than just a dairy processor, they
are in fact a global food and ingredient manufacturer and are beginning to invest
accordingly. In the past the co-op has stuck to its knitting, investing in
dairy and dairy-related businesses over the globe with mixed results.
Fonterra has taken a stake in Motif
Ingredients, a US based company that develops and commercialises bio-engineered
animal and food ingredients. This is a clear sign they are looking to the
future and are determined not to be left behind. Milk compounds are notoriously
difficult to replicate in the lab, so Fonterra see this investment as having a
stake in complementary proteins, products that Fonterra itself may use as
ingredients that will integrate with and add value to their core dairy
nutrition focus.
Of course GMO’s and lab based foods
have their detractors. Federated Farmers
representatives were in a meeting with Air New Zealand shortly after the
airline introduced the lab-grown Impossible Burger to their menu, the meeting
had nothing to do with the burger, but rumour has it a Feds board member
snarled “I’d like to reach over the table and stab you.”
Such are the passions that
non-traditionally produced proteins inflame!
I wonder if that Federated Farmers
board member is as impressed with new humble, honest and realistic Fonterra as
I am.
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