Fonterra pitches NZ$4.9bn business to investors

As the global dairy industry navigates margin pressure, geopolitical disruptions, and the demand for sustainable nutrition, New Zealand-based co-operative Fonterra is taking a decisive yet measured step: it is preparing to divest its consumer division, home to household brands such as Anchor, Fernleaf, and Mainland. But the dairy giant is in no rush.

Instead, Fonterra is adopting a dual-track process, exploring both a public listing (IPO) and a strategic trade sale. Investor roadshows have begun across New Zealand, Australia, and Asia, even as the company makes clear it will only proceed if the valuation and future stewardship align with its core priorities.

If listed, the consumer division will debut as Mainland Group, positioned as a premier Asia-Pacific dairy platform with deep distribution, high brand equity, and access to high-growth emerging markets.

A Global Consumer Dairy Powerhouse in the Making

Mainland Group is no lightweight. In FY24, the division clocked NZ$4.9 billion (US$2.82 billion) in revenue, with a footprint spanning Oceania, Southeast Asia, the Middle East and Africa (MEA), and wider Asia-Pacific. The portfolio includes everyday essentials—butter, cheese, yoghurt—alongside fast-growing segments such as infant and maternal nutrition and healthy ageing products.

Fonterra’s internal data reveals stable gross profit growth in mature markets like Australia and New Zealand, while regions such as Sri Lanka and the Gulf are experiencing steeper growth curves—a sign that Mainland Group could appeal to both financial investors and global food majors seeking scale in the Global South.

Strategic Patience, Tactical Precision

For Fonterra CEO Miles Hurrell, the spin-off is not a fire sale. Instead, it’s a calculated move aligned with the co-op’s broader strategic pivot toward high-value Ingredients and Foodservice businesses—areas that promise strong returns, pricing power, and long-term resilience.

“We are clear on our strategy and have a pathway to grow further value for farmer shareholders and the New Zealand economy,” said Hurrell. “At the same time, we recognise the responsibility we have to find the right steward for iconic brands like Anchor and Mainland.”

Hurrell said the final decision—IPO or trade sale—will be put to farmer shareholders only after both paths are fully explored. The litmus test? Long-term value creation, expanded global access, and alignment with Fonterra’s farmer-first ethos.

With the co-op recently raising its FY25 earnings guidance to 55–75 cents per share (from 40–60) and maintaining a strong farmgate milk price midpoint of NZ$10.00, Fonterra appears to be timing its move from a position of strength.

Leadership with Global Gravitas

Helming the proposed Mainland Group are two seasoned leaders:

• René Dedoncker, CEO-elect, a Fonterra veteran with experience across 50+ markets
• Paul Victor, CFO-elect, a finance leader with over three decades at multinational energy firm Sasol

Their mandate? Engage investors with a compelling vision of a dairy platform that’s both rooted in heritage and ready for high-growth markets.

A Deal That Could Reshape Global Dairy

Whether Fonterra ultimately chooses a public or private route, one outcome is certain: the consumer division’s transformation into Mainland Group will signal a new chapter for global dairy strategy.

A deal of this scale not only reshapes the competitive landscape but also reinforces the future of food as healthier, more sustainable, and more consumer-centric. For investors, rivals, and supply chain partners alike, the message is clear: Fonterra is playing the long game—and playing it smart.