The firm already claims to be the number one supplier of cheese to pizza makers in China but it also wants to grow its cream and butter sales to bakeries and the dessert sector.
"The bakery sector in Asia tends to be more sophisticated than the western world where the focus is mainly on bread. Here there is a very broad range of products on offer, especially in pastries and cakes," said George Zoghbi, director of Fonterra's global foodservices business.
"Many bakeries in China are adding cafes where they serve dairy desserts, cakes and coffee drinks. They need butter for croissants, cakes and pastry and cream for whipping," he told AP-Foodtechnology.com.
Consumption of dairy products is low in China, even by Asian standards. Estimates suggest that the Chinese now eat 18kg of dairy produce per capita each year, compared with 63kg in South Korea.
But new bakery products have indirectly led to increased dairy consumption in China, with Pizza Hut and McDonald's burgers responsible for introducing cheese to the masses.
Fonterra, which has been present in China for more than 20 years and is the biggest exporter of dairy products to the country, said its foodservices business is seeing higher than average double-digit growth in China and the new innovation centre is designed to keep growing this market.
"China's eating trends are beginning to mirror western countries, with consumers seeking more nutritious and convenient products that they can consume out-of-home," added Zhogbi.
He added that China is not just a copier of trends but also has developed novel food products.
"Innovation can come in a variety of shapes and forms, not just in new products," said Zhogbi. "In China there are lots of products with innovative taste profiles and flavours, [such as green tea and exotic fruits] as well as small portions and individual packing."
The new centre will focus on products that require less labour intervention and are almost ready to use or bake, added Zhogbi.
"There is a lack of skilled labour in the hospitality and food sector and this causes variation in the product offering. Companies want products that are made from authentic ingredients that taste as good as if they're made from scratch and yet the chefs only have to put the finishing touches to them," he said.
The new innovation centre will also serve customers in fast-food and hotels and catering. It will have confidential, well-equipped kitchens where they can test new recipes and design new bakery products. Customers will also have access to research data and training for staff.
Fonterra Foodservices is also opening innovation centres in other growing markets including Singapore, Melbourne and Dubai. The firm spends US$60 million each year on dairy innovation and said yesterday that its sales to foodservices had grown by 15 per cent over the prior year.
"Our strategy is to make our ready-to-use dairy products the preferred choice of foodservice operators globally," Zoghbi said.
