Fonterra Greater China CEO: Sensing opportunities key to standing out from competition
February 22, 2023. Shanghai – Sensing opportunities in advance, being agile and responding quickly to consumers’ needs are among the key elements that allow companies to stand out from the competition, Fonterra Co-operative Greater China CEO Teh-han Chow shared during a special Executive Forum at the CEIBS Shanghai Campus this evening.
During the offline event, Mr. Chow walked participants through Fonterra’s business model, major milestones in China, and the process of turning a glass of milk into various products. He also shared his learnings and insights on how to sense opportunities from both business and personal experiences.
“Sensing opportunities is an important part of how a company or organisation can be successful [...]. It’s through the experience that entrepreneurs get during tradings that they are able to pick that up,” Mr. Chow told the packed audience.
A co-operative group with multiple business units spanning ingredients, food service and consumer brand categories, Fonterra was one of the first New Zealand businesses to enter the Chinese market.
In the group’s quest to find a disposal solution for cheese whey, Fonterra sensed potential opportunity and came up with a whey protein concentrate – a solution which reuses the watery cheese liquid instead of dumping it in the ground.
“In the old days, what they did was to try to flush it down the drain because they had no use for it, which meant you had to have an affluent system and discharge it into the sewage […]. Suddenly we’ve taken a waste that we’re trying to get rid of and actually [found a way to] sell it at a very high value,” Mr. Chow explained, adding “that took sense.”
The quick response to market and consumer behaviour changes also propelled Fonterra to thrive through the pandemic. Rather than reducing its demand forecast during the Shanghai lockdown in 2022, the group quantified “senses” and forged ahead with a new sales model of large scale deliveries.
“Had we kept with our original or a reduced forecast, we would have lost out on business. By raising our forecast, we were able to capture opportunities in April and beyond in 2022,” Mr. Chow said.
As a result, Fonterra set up their first community buying scheme shortly after the beginning of the lockdown.
“It’s about how quickly you can react, and how you’re looking out for these things,” he noted.
Mr. Chow further introduced what he called a “reward cycle” – something he learned during his MBA studies.
“When you look at a situation, you find what matters and measure it. As soon as you start measuring it, people will find ways to do it and make the number a little bit better. If it gets done, you reward them for it. What gets rewarded does matter, so it’s a continuous cycle,” he stated.
In additional to finding and building a reward cycle into one’s organisation, he added, we should not be clouded or overly negatively impacted by the circumstance that we’re in.
“Your current circumstance will dictate how you see things […] and a part of sensing is an ability to step out of the current circumstances and to be able to look at it from a more holistic point of view and not be influenced by negativity or whatever situation may be cloudy,” he concluded.
In addition to the sharing, Fonterra Greater China Vice President Carol Feng also briefly introduced the Co-operative’s people strategy and young talent development programme, with five criteria valued for forward-looking talent, namely purpose-led, agile, innovative, fast-learning (lifelong learning) and collaborative.