Fonterra CEO Resigns: Restructuring Concludes, Restorer Departs

Why is Hao Wanli’s departure from AI considered the completion of a repair mission?

Sometimes, a CEO’s departure is the result of a crisis; other times, it serves as a phase completion report.

On March 16, Fonterra announced that CEO Miles Hurrell will resign, and the board has initiated a successor search.

The company’s public statement was quite calm: after working at Fonterra for 25 years and serving as CEO for eight, Hao Wanli believes now is the right time to leave. This non-dramatic wording doesn’t quite match the ups and downs he experienced during his tenure.

When he took office, Fonterra was paying the price for a series of aftereffects, with one of the issues stemming from overseas expansion and complex investments. In fiscal year 2019, the company recorded a net loss of NZD 605 million, with a return on capital of only 5.8%, and management had to admit that a business reset was unavoidable.

That year, Fonterra launched a new strategy emphasizing cuts in capital expenditure, divestment of non-core assets, and strengthening financial discipline, while refocusing on New Zealand milk sources.

From a corporate history perspective, Hao Wanli’s first achievement was turning Fonterra from a company trying to do everything into a company that knows what it excels at.

Once, Fonterra tried to balance multiple identities: it was both a dairy cooperative and a global dairy investor; relied on bulk dairy exports while seeking higher premiums on consumer brands; paid competitive milk prices to farmers while maintaining a complex, multi-region, multi-brand international business system.

Such a structure was sustainable in a booming market but became cumbersome under capital return pressures. Hao Wanli didn’t attempt to spin a new story but instead did the hard, unglamorous work: acknowledging that cooperatives don’t need to own all dreams, then systematically doing some pruning.

His second achievement was redefining Fonterra’s identity. In 2024, Fonterra revised its strategy, clearly stating that growth would focus on ingredients and foodservice businesses, further strengthening its position as a B2B dairy nutrition supplier, while exploring the divestment of its global consumer goods operations.

This statement may seem like a strategic language adjustment, but it actually signifies that Fonterra has finally accepted a reality: its true advantages may not lie at the retail shelf end but in high-value dairy ingredients, foodservice channels, milk source systems, and dairy science capabilities. Compared to becoming another global consumer goods giant, becoming a more focused, efficient, and higher-return upstream and midstream supplier might better suit Fonterra’s nature.

This approach ultimately culminated in his most iconic move: the sale of its global consumer goods and related businesses. In 2025, Fonterra announced it would sell this part of the business to French dairy giant Lactalis. On March 6, this year, Fonterra announced that the deal is expected to close by the end of March, with capital returns to shareholders in April.

For a dairy company that has long wavered between branding, milk sourcing, and global layout, this was not just an asset transaction but a shift in identity: Fonterra decided to stop seeing itself as a comprehensive dairy group trying to do everything and instead focus on its most competitive segments.

If only looking at the results, Hurrell’s financial statements are clearly much better than when he took over. Fonterra’s fiscal year 2025 revenue reached NZD 26 billion, up 15%; the group reported an operating profit of NZD 1.732 billion, higher than the previous year’s NZD 1.529 billion; after-tax profit was NZD 1.079 billion; annual dividend was 57 NZ cents; and the return on capital was 10.9%, entering the company’s target range of 10% to 12%.

More importantly for cooperative members, the final farm gate milk price for the 2024/25 season was NZD 10.16 per kilogram of milk solids, meaning Fonterra paid NZD 15.3 billion to New Zealand farmers over the year. For a cooperative that must account to both capital markets and farmers, this is a respectable performance.

Even more critically, this performance is not just the result of cyclical benefits but is supported by a clearer operational structure. Fonterra explicitly stated in its annual report that profit growth mainly came from improved profitability in the ingredients business and continued growth in foodservice, especially in Greater China, where demand for ultra-high-temperature cream, butter, and mozzarella remained robust.

Meanwhile, the company plans to invest up to NZD 1 billion over the next three to four years in capacity expansion for proteins, butter, cream cheese, and other products, as well as upgrades to ERP, data, AI, and automation infrastructure. This means that what Hao Wanli left behind is not just a short-term boost from asset sales but a more focused operational logic: converting more milk sources into high-value products and channeling capital into higher-return segments.

Of course, today’s Fonterra still faces risks. The dairy industry is a typical cyclical sector, with global dairy prices, weather, trade conditions, and exchange rates all quickly affecting profitability and milk prices. In February, the company raised its farm gate milk price guidance for the 2025/26 season from NZD 8.50–9.50 per kg of milk solids to NZD 9.20–9.80, while maintaining an ongoing earnings per share forecast of 45–65 NZ cents and stating that the sale of Mainland Group is expected to support a special dividend.

In other words, Fonterra remains in a relatively favorable industry window. Hao Wanli reduced organizational complexity through restructuring but did not eliminate industry cyclicality. The real test ahead will be whether Fonterra, after divesting its consumer business, can continue to prove that a more focused approach means not only being lighter but also more profitable.

Therefore, Hao Wanli’s departure at this time is somewhat thought-provoking.

Official explanations usually cite the company’s entry into a new strategic phase, suitable for the next leader to take over. This isn’t false; it’s just incomplete. A more comprehensive understanding might be that Hao Wanli was a repair-oriented CEO. His most important work was not pioneering new territories but clearing old battlegrounds; not telling bigger stories but ending costly old stories.

When he took over, the company needed to stop losses, reduce debt, divest, and rebuild trust with farmers; when he leaves, these tasks are largely completed. The next phase for Fonterra likely requires capabilities beyond restructuring—more operational execution and implementation skills. The strategic direction is quite clear now; the market will be watching not whether the new CEO overturns the current route but whether he can deepen the ingredient and foodservice businesses, turn capital expenditure into more stable returns, and truly shape Fonterra into a high-quality B2B dairy company after selling its consumer business.

The company has entered a new strategic phase, and the outside world is now more focused on executing the established strategy rather than another major shift. In this sense, Hao Wanli’s departure is less like a forced exit and more like a conscious closing of a chapter.

He spent eight years turning a cooperative once burdened by expansion aftereffects, impairments, and identity confusion into a more disciplined, clearly positioned, and financially sound dairy company. He didn’t make Fonterra the most glamorous company but first made it easier to understand and more easily valued.

Such CEOs are often less dazzling than founders or star professional managers. They are more like road builders and obstacle clearers, pulling a company back from the wrong path and leaving when the road becomes smooth.

Fonterra has completed a long and costly correction, and the person leading this correction chose to pass the baton at the point of financial improvement and deal closure. This is not just a simple personnel change but a footnote to Fonterra’s restructuring history over the past eight years.