Vietnam at the heart of Fonterra’s ASEAN expansion

July 02, 2025 | 18:46

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As global exporters grapple with rising non-tariff barriers, Justine Aroll, general manager of trade strategy at Fonterra, spoke to VIR’s Hoang Oanh about how the dairy giant is navigating Southeast Asia’s complex trade landscape through regulatory expertise, long-term resilience planning, and strong local partnerships.

Vietnam at the heart of Fonterra’s ASEAN expansion

What drives Fonterra’s efficiency and relevance amid growing competition and changing consumer needs in ASEAN?

Fonterra’s long-term commitment to ASEAN is built on over 50 years in the region and rooted in an in-depth understanding of our consumers – not just who they are – but how they live, what they value and how their needs evolve.

We have invested in robust systems across the region to track consumer attitudes, behaviours and habits. These insights are not just data points, they are woven into the very fabric of how we operate, from product development and marketing to in-market execution. This discipline keeps us relevant in a fast changing, diverse region.

We don’t see consumers in isolated segments, we see them across life stages. From pregnancy and early childhood with Anmum, to growing families with Boneeto and Anchor, and onto healthy living with Anlene, our portfolio is designed to support every stage of life. This approach has helped us build trust across generations.

What powers this strategy is our strong innovation engine anchored by local application centres across ASEAN. Being close to the consumer allows us to develop, test and launch innovations rapidly, often within timelines that set industry benchmarks.

Beyond consumer connection and innovation, our supply chain strength has been a key enabler. Through efficient manufacturing and smart distribution, we deliver high-quality New Zealand dairy nutrition at accessible price points, a critical factor in markets where affordability and value go hand in hand.

In a region as dynamic and fast changing as ASEAN, these elements – profound consumer understanding, life stage relevance, fast innovation and operational excellence – have allowed us to remain consumer relevant and future focused.

As non-tariff barriers continue to pose significant obstacles to trade and market integration, what specific challenges has Fonterra faced in navigating regulatory frameworks?

Non-tariff barriers (NTBs) can pose significant obstacles to trade and market integration for exporters. Globally, New Zealand dairy exporters can face significant NTBs across a range of different issues.

A 2023 study commissioned by the Dairy Companies Association of New Zealand estimated that non-tariff measures impose costs of around $4.5 billion on New Zealand dairy exports.

In the ASEAN region, we are very lucky to have high-quality free trade agreements that have helped to simplify regulatory environments.

This includes the ASEAN-Australia-New Zealand Free Trade Area, Comprehensive and Progressive Agreement for Trans-Pacific Partnership and Regional Comprehensive Economic Partnership. These arrangements have been invaluable in streamlining operational procedures and tackling non-tariff barriers.

Nonetheless, we still face some barriers across the wider ASEAN markets. Some of the most common issues that we face include complex or duplicative administrative procedures and processes, inconsistent interpretation of rules by government agencies, in ports of entry and regulations that are sometimes unclear in their application.

These are things that we are well-prepared to tackle. We have mature systems and processes that reflect a deep understanding of local dynamics, we have strong local partnerships, and we ensure all regulatory clearances are in place well ahead of market activity.

This allows us to adapt quickly without compromising our supply chain integrity, cost structure or go to market pace. It also ensures that we can maintain continuity, protect product quality and uphold our commitment to consumers across the region.

How has Fonterra adapted its investment strategy to strengthen resilience and maintain long-term growth in Southeast Asia?

Fonterra’s investment approach in ASEAN remains consistent, guided by long-term thinking. We take a disciplined view of the region, built on scenario planning, robust forecasting and clear contingency strategies.

While we remain fully aware of global supply chain realignments and evolving geopolitical dynamics, there have been no material changes to our investment plans in the region.

We have already built resilience into our model with diversified supply chains, local manufacturing where relevant and strong in market teams that understand how to respond to complexity. Our presence in Southeast Asia is built on strong fundamentals, and we continue to see it as a key growth engine in Fonterra’s global portfolio.

How does Vietnam fit into Fonterra’s broader ASEAN strategy, and what plans are in place to grow its role in the region?

Vietnam is a key focus market for Fonterra within our broader ASEAN strategy. Its strong economic growth, rising middle-class and increasing demand for high-quality dairy nutrition make it one of the most exciting opportunities in the region.

Vietnam is also emerging as a strategic production base within the 'China+1' model, giving it added significance in regional supply chains. These factors combined with its integration into regional trade frameworks further reinforce its importance in our long-term plans.

Our commitment to Vietnam is clear. It is a growth market for us, and we are focused on expanding our presence, both through deepening customer relationships and strengthening our in market capabilities.

Whether it is through targeted innovation, supply chain excellence or go to market strategies, Vietnam remains a priority for us.

We see Vietnam not just as a growth market, but as a strategic anchor in our ASEAN footprint. After more than five decades in the region, we remain fully committed to investing in its future.