The article clarifies that Fonterra is a global leader in this area, but not because of its brands. Instead, its success is found in the creation of high-value ingredients. Gow contends that this strategy delivers a far higher economic return to the dairy industry than any of the cooperative’s branded products. This nuanced understanding of dairy economics suggests that a company’s greatest strength may not be in direct consumer-facing products but in its position as a specialized provider of premium ingredients.

The report also addresses concerns that selling the consumer brands will make Fonterra vulnerable. The article highlights that this move is not a sign of weakness but a strategic consolidation. By focusing on its core expertise—the creation of high-value ingredients—Fonterra is reinforcing its competitive advantage. The sale will not have an impact on the price paid to farmers, a key detail that will resonate with producers and reinforce the stability of the cooperative model.

Another key insight is New Zealand’s unique position in the global food supply chain. Unlike other dairy-producing nations that prioritize their best milk for the liquid milk domestic market, New Zealand puts its highest quality milk into milk powder and ingredients. This strategic choice differentiates the country and gives it a distinct advantage in the agribusiness sector, allowing it to command a premium for its specialized, high-quality products on the international market.