CEO Resignation, Fonterra Reshuffles Strategy

Questioning AI · After Miles Hurrell’s departure, can his successor replicate China’s experience globally?

Recently, New Zealand dairy giant Fonterra announced that Miles Hurrell, who has been at the helm for eight years, has resigned. The Fonterra board has initiated the selection process, and Miles Hurrell will remain until September 2026 to ensure a smooth transition. During his tenure, his final major project was the divestment of consumer goods and related businesses, marking Fonterra’s full transformation into a raw material supplier and technology service provider. Hurrell’s focus on a B2B strategy improved Fonterra’s financial performance and led to the company’s revenue in Greater China surpassing NZD 7 billion for the first time. After Hurrell’s departure, industry attention is on who will continue to execute this strategy.

Eight-Year Term

After weeks of speculation about Hurrell’s departure, the official announcement finally came. On March 16, Miles Hurrell officially resigned.

Hurrell has worked at Fonterra for 25 years. In 2018, he was unexpectedly appointed CEO amid financial pressure and a trust crisis with dairy farmers. During his tenure, he led the company to return to profitability and completed a strategic transformation, especially in China, shifting from a “brand owner” to a “B2B nutritional solutions provider,” one of his most notable achievements.

Under Hurrell’s leadership, China became Fonterra’s largest global market, and he implemented sweeping reforms there. In April 2021, Fonterra sold two fully owned farms in Shanxi Ying County and Hebei Yutian; in June, it announced the sale of two joint ventures with Abbott in Shandong, exiting heavy asset farming in China. Since 2021, Fonterra has established six application centers and one innovation center across Wuhan, Shenzhen, Shanghai, and other locations.

Last September, Fonterra’s FY2025 report showed total revenue of NZD 26 billion, a 15% increase year-over-year. For the first time, revenue in Greater China exceeded NZD 7 billion, with strong performance in foodservice, raw materials, and other segments.

Despite solid performance, Hurrell’s sudden resignation as CEO has sparked industry speculation. “For Hurrell, he realized he had been doing this for eight years and felt that to pursue a new strategy, he would need to invest several more years. So, he probably thought now was the right time to step down,” said Fonterra Chairman Peter McBride in a recent media interview. “Clearly, he had been reflecting and considering this for quite some time.”

Before Hurrell’s official departure in September, Fonterra needed to select a successor. Industry insiders speculate that Richard Allen, the current President of Global Ingredients, is a leading candidate. Notably, Allen led Fonterra’s foodservice operations in Greater China from 2016 to 2018 and is one of the few senior global executives with long-term experience in China. During that period, he oversaw Anchor’s professional brand development in China, focusing on high-growth B2B channels like baking, foodservice, and new tea drinks. Allen’s China experience provides practical basis for his potential to replicate the “China experience” globally after his promotion to Global President of Ingredients in 2025.

Focus on B2B

The execution capability of Fonterra’s current B2B-focused strategy may be a key consideration for the new CEO.

In 2024, Fonterra announced the divestment of its global consumer business, including brands like Anlene, Anmum, and Anchor, retaining only the brand rights in Greater China. The company is shifting its focus entirely to NZMP raw materials and Anchor professional dairy foodservice, emphasizing high-value B2B channels.

In early March this year, Fonterra announced the latest progress in its global consumer business divestment, selling Mainland Group for NZD 4.22 billion to French dairy giant Lactalis. The sale includes three main parts: Fonterra’s global consumer brands (excluding Greater China) and their associated brands, its foodservice and raw material operations in Oceania and Sri Lanka, and its foodservice business in the Middle East and Africa. The transaction involves over 20 brands, including Anchor, Mainland, Kāpiti, Anlene, Anmum, Fernleaf, Western Star, and Perfect Italiano.

It is noteworthy that China, as one of Fonterra’s most important markets, has experienced significant changes in dairy consumption over the past decade. Basic dairy product demand has declined annually, while imports of cheese, butter, and high-quality whey powder have increased steadily, prompting Fonterra to adjust its business strategy.

Chinese food industry analyst Zhu Danpeng stated, “Fonterra’s focus on B2B strategy is reasonable. The original milk powder and other products do not significantly support its overall revenue or profit. After divesting non-core businesses, it will positively impact Fonterra’s sustainable development, brand effect, and scale effect.”

Beijing Business Daily Reporter Kong Wenxie