Surging demand from China is delivering a major boost to New Zealand’s dairy sector, as global consumers increasingly turn to high-quality imported products.
As Chinese consumers seek out premium imported goods, New Zealand’s reputation for high-quality dairy is paying dividends. Cream, in particular, is used in everything from cakes to trendy tea beverages, bracing New Zealand’s position as a competitive supplier in international markets.
Dairy giant Fonterra is responding with a private-sector investment, building a new facility in Southland capable of producing around 50 million litres of cream annually.
Fonterra chief executive of greater China Teh-han Chow visited the plant this week to review progress.
“It’s looking fabulous; it’s a really important site for us, and it’s a really important investment for the food service business.”
“We’re investing nearly $150 million in a facility that’s going to create a lot more UHT cream; it complements our existing facility in Waitoa.”
Chow noted that demand for cream is especially strong in China, with sales rising across Asia, so the plant is designed to ramp up production as needed.
“Cream is in cakes; that’s very popular, and it’s also being used in tea macchiatos.”
“If you look at all the base fundamentals, you’ve got increasing urbanisation, an increasing middle class, and you’ve got consumers that are wanting higher-quality products.”
He also contrasted trends in Western and Asian diets:
“In western markets we’ve seen a move from animal fat-based diets to plant-based – in Asia it’s the opposite; people want to move from a plant-based diet to a dairy-based one because it’s seen as better, healthier and more nutritious.”
Despite slower overall economic growth in China, demand for imported dairy remains resilient. This underlines the importance of maintaining strong trade relationships and ensuring open market access—key factors in sustaining export-led growth.
“I think demand for New Zealand dairy products will continue to grow,” Chow said.