Woodford contends that a cooperative structure is not the “natural owner” of a consumer-products marketing company, which requires massive capital intensity and decentralized, in-market decision-making to react quickly to evolving trends. In contrast, the ingredients business thrives on science, logistics, and robust Business-to-Business (B2B) relationships. By retaining and doubling down on this B2B focus, Fonterra is prioritizing what it does best: maximizing returns from highly specialized ingredients and the rapidly growing foodservice sector, exemplified by products like specialized mozzarella and high-quality grass-fed butter.

A critical point of misunderstanding lies in the nature of Fonterra’s previous consumer business. Most of the products sold under its brands, particularly in key markets like Australia, did not use New Zealand-sourced milk. Instead, milk was procured and processed in the destination country. This was a necessary workaround due to New Zealand’s unique, highly seasonal production model, which is ideally suited for creating long-life products—such as milk powders and commodity cheeses—but poorly suited for supplying non-seasonal, short-shelf-life consumer items that require year-round consistency.

Despite the logical reasoning behind the sale, Woodford expresses “unease” that New Zealand’s broader investment community, including public and private KiwiSaver funds, did not step up with a competitive bid to keep a minority stake in the new consumer company headquartered domestically. Ultimately, in an open capital economy, it was the dollar value that counted, leading to the sale to Lactalis. This development removes a valuable connection to “consumer-market signals,” which the ingredient business must now actively work to understand through its focused foodservice and specialized product divisions.