Story: Dairying and dairy products

Page 12. Manufacturing and marketing in the 2000s

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Fonterra Co-operative Group

The formation of Fonterra in 2001 was a significant step for New Zealand dairy manufacturing and marketing. It resulted in one major processing and marketing cooperative and provided the opportunity for other firms to enter the industry and develop and exploit market opportunities.

When formed in 2001, Fonterra was owned by 11,000 dairy farmers and supplied 95% of the country’s milk. By 2020 its share of the market had fallen to about 80%.

Fonterra Research Centre

The Fonterra Research Centre (FRC) in Palmerston North was formerly called the New Zealand Dairy Research Institute. FRC is a subsidiary of the Fonterra Co-operative Group and conducts research and development in dairy science and technology, with emphasis on dairy product development.

The volume and reliability of Fonterra’s milk supply, which comes from about 10,000 dairy farmers, has made it one of the top 10 dairy companies in the world. It is the leading New Zealand exporter of dairy products and is responsible for a third of international dairy trade.

Fonterra’s global milk supply comes from farms in New Zealand, Australia, Chile and China, and it sells products to customers and consumers in 140 countries. It collects more than 13 billion litres of milk a year, and manufactures and markets over 1.8 million tonnes of product annually. It has around 20,000 staff in 40 countries, with over half of its staff working outside New Zealand.

As well as traditional dairy products, Fonterra exports milk powder, casein and speciality products, such as a range of dairy products to help maintain bone strength. Fonterra has a range of organic products on the market.

Other manufacturers

Two dairy cooperatives that did not join Fonterra were Tatua Co-operative Dairy Company and Westland Milk Products. Tatua has since been at the forefront of the development of niche products. Westland has specialised in the production of milk powders, milk fats and milk protein products. Other manufacturers include Dairy Trust and Synlait.

Hundreds of specialist dairy product companies export their products, some of which are made from goats’ milk. Products from organic cows’ milk are sold on the domestic market.

Non-cooperative dairy manufacturers have become more significant in New Zealand. It was estimated that non-cooperatives would process 3% of New Zealand milk in 2008/9, and this share was expected to grow during the following decade.

Open Country Dairy, controlled by the Talley family, began exporting in 2014 and in 2020 claimed to be the world’s second largest exporter of milk powder. It had processing plants at Horotiu and Waharoa in Waikato, Whanganui, and Awarua (near Invercargill).

The Dairy Companies Association

The principal manufacturers of dairy products in New Zealand are members of the Dairy Companies Association of New Zealand. In 2008 these were Fonterra Co-operative Group, Tatua Co-operative Dairy Company, Westland Milk Products, Fonterra Brands, Goodman Fielder and Open Country Cheese.


New Zealand dairy products are promoted around the world with distinctive brands such as Fernleaf, Anchor, Kapiti, Anlene, Anmum and Fresh ‘n Fruity. However, the vast majority of New Zealand dairy products are used as ingredients in consumer products sold under global brands.

How to cite this page:

Hugh Stringleman and Frank Scrimgeour, 'Dairying and dairy products - Manufacturing and marketing in the 2000s', Te Ara - the Encyclopedia of New Zealand, (accessed 23 May 2024)

Story by Hugh Stringleman and Frank Scrimgeour, published 24 Nov 2008