1 00:00:01,000 --> 00:00:05,000 Speaker 1: You're listening to a Shasi's podcast. It does represent to 2 00:00:05,080 --> 00:00:07,800 Speaker 1: change in strategy moving more into the ingredients business and 3 00:00:08,160 --> 00:00:09,920 Speaker 1: the food service. Like, just interested in how you're sort 4 00:00:09,920 --> 00:00:11,880 Speaker 1: of articulating that and how that's been picked up. A 5 00:00:11,880 --> 00:00:15,239 Speaker 1: lot of people thought our strategy was to divest of consumer, right, 6 00:00:15,240 --> 00:00:17,480 Speaker 1: which is not the strategy. Right. The strategy has been about, 7 00:00:17,880 --> 00:00:19,880 Speaker 1: you know, it has been about us being clear about 8 00:00:19,880 --> 00:00:21,759 Speaker 1: what it is that we are as a co op 9 00:00:22,600 --> 00:00:24,040 Speaker 1: and then there's a co op. What we're here for 10 00:00:24,239 --> 00:00:27,680 Speaker 1: is end to end value for the farmer, and sometimes 11 00:00:27,720 --> 00:00:31,920 Speaker 1: that's about getting milk price and sometimes that's about earnings. 12 00:00:32,200 --> 00:00:34,839 Speaker 1: But actually for us, we're a co ops and we're 13 00:00:34,880 --> 00:00:38,320 Speaker 1: sort of ambivalent between the two of them. But actually 14 00:00:38,360 --> 00:00:41,520 Speaker 1: that's what we're trying to maximize. What maximizes the milk 15 00:00:41,520 --> 00:00:45,239 Speaker 1: price and the earnings that goes along with it. And 16 00:00:45,280 --> 00:00:47,279 Speaker 1: so our strategy is, well, then how do we do that, 17 00:00:47,320 --> 00:00:49,479 Speaker 1: how are we best place to be able to do that? 18 00:00:49,680 --> 00:00:51,879 Speaker 1: But also at the same time being clear that we 19 00:00:51,920 --> 00:00:54,160 Speaker 1: don't just play a financial role for the farmer. We 20 00:00:54,200 --> 00:00:56,720 Speaker 1: also play quite a big risk roll, and so you know, 21 00:00:56,800 --> 00:00:58,800 Speaker 1: we know we have a network of assets that that 22 00:00:58,880 --> 00:01:00,840 Speaker 1: means that we will always come and pick up the 23 00:01:00,840 --> 00:01:02,560 Speaker 1: milk and we will always pay for it on the 24 00:01:02,560 --> 00:01:04,959 Speaker 1: fifteenth of the month. And then we have a network 25 00:01:05,000 --> 00:01:07,360 Speaker 1: of assets which allows us to then turn that into 26 00:01:07,800 --> 00:01:10,559 Speaker 1: the most profitable setup of products. Right, we have asset 27 00:01:10,600 --> 00:01:14,800 Speaker 1: flexibility which gives us optionality. Depending on how the markets 28 00:01:14,800 --> 00:01:17,520 Speaker 1: are looking, we can choose to make different things. We 29 00:01:17,560 --> 00:01:19,480 Speaker 1: also have a whole heap of assets that we can 30 00:01:19,600 --> 00:01:22,400 Speaker 1: use so that we're not dependent on just one in 31 00:01:22,440 --> 00:01:23,840 Speaker 1: one area or any of that sort of stuff. So 32 00:01:23,840 --> 00:01:25,680 Speaker 1: that flexibility, so that does actually a lot of risk 33 00:01:25,720 --> 00:01:28,399 Speaker 1: mitigation on behalf of the farmer as well. So the 34 00:01:28,440 --> 00:01:31,000 Speaker 1: farmer offering is something that is super important. How do 35 00:01:31,040 --> 00:01:33,119 Speaker 1: we make sure that we are the most compelling offer. 36 00:01:33,840 --> 00:01:35,760 Speaker 1: That's what we want to make sure because you know, 37 00:01:35,760 --> 00:01:37,920 Speaker 1: our co op of scale is important to the industry, 38 00:01:38,040 --> 00:01:40,839 Speaker 1: we believe, so we look at it from that perspective. 39 00:01:41,160 --> 00:01:43,800 Speaker 1: And then the two channels that are the best return 40 00:01:43,920 --> 00:01:48,040 Speaker 1: for us is ingredients and food service and consumer. You know, 41 00:01:48,080 --> 00:01:50,320 Speaker 1: despite the fact that you know, we've had a really 42 00:01:50,320 --> 00:01:52,840 Speaker 1: good improvement in the performance over the past few years, 43 00:01:53,720 --> 00:01:57,600 Speaker 1: it's still less than farmers cost the capital. That's the 44 00:01:57,640 --> 00:01:59,600 Speaker 1: sort of return that we're getting on there, So it 45 00:01:59,640 --> 00:02:02,840 Speaker 1: doesn't makes sense for us to retain that business when 46 00:02:02,840 --> 00:02:05,360 Speaker 1: we have other channels that we can get a better 47 00:02:05,440 --> 00:02:08,080 Speaker 1: return in. And it's not about us saying that it's 48 00:02:08,080 --> 00:02:10,119 Speaker 1: a bad business, because it's not. It's a great business, 49 00:02:10,200 --> 00:02:12,880 Speaker 1: but we have another one that gives us better returns. 50 00:02:13,240 --> 00:02:15,360 Speaker 1: And so our choice is not to say, hey, do 51 00:02:15,400 --> 00:02:18,480 Speaker 1: you want a B or C. It is between between 52 00:02:18,480 --> 00:02:20,480 Speaker 1: those what is the best mix? And for us that 53 00:02:20,520 --> 00:02:23,560 Speaker 1: becomes about ingredients of food service. So ingredients, you know, 54 00:02:23,639 --> 00:02:25,600 Speaker 1: that's always I mean, it's where we make the vast 55 00:02:25,600 --> 00:02:29,040 Speaker 1: majority of our profit. It always has been. There is 56 00:02:29,080 --> 00:02:32,840 Speaker 1: so much demand there for high value ingredients, advanced proteins, 57 00:02:32,919 --> 00:02:37,440 Speaker 1: medical grade nutrition is very important now more so, and 58 00:02:37,680 --> 00:02:40,680 Speaker 1: people want natural nutrition. And the business that we have 59 00:02:40,760 --> 00:02:44,000 Speaker 1: within food services, you know, we have great product sets 60 00:02:44,880 --> 00:02:47,760 Speaker 1: and they have great functionality that is valued by chefs, 61 00:02:47,880 --> 00:02:50,560 Speaker 1: and that's essentially who is choosing these food service products. 62 00:02:51,040 --> 00:02:53,240 Speaker 1: Our business is quite heavily in China, and I'd love 63 00:02:53,280 --> 00:02:55,160 Speaker 1: to see us do a bit more outside of China 64 00:02:55,840 --> 00:02:58,600 Speaker 1: in that food service space. But you know, again there's 65 00:02:58,600 --> 00:03:01,280 Speaker 1: plenty of opportunity out there as well. So that's where 66 00:03:01,320 --> 00:03:03,760 Speaker 1: we get the best returns. We're also it's a B 67 00:03:03,880 --> 00:03:05,920 Speaker 1: to B business. It's a simpler business. We can be 68 00:03:06,000 --> 00:03:09,680 Speaker 1: more agile, and that allows us to really develop long 69 00:03:09,760 --> 00:03:12,840 Speaker 1: term partnerships with our customers. That's where we focus our innovation, 70 00:03:12,960 --> 00:03:16,079 Speaker 1: that's where we focus our resources. Is about getting good 71 00:03:16,080 --> 00:03:19,680 Speaker 1: long term relationships. That's what actually creates value. Investing involves 72 00:03:19,680 --> 00:03:21,760 Speaker 1: the risk you might lose the money you start with. 73 00:03:22,080 --> 00:03:25,840 Speaker 1: We recommend talking to a licensed financial advisor. We also 74 00:03:25,880 --> 00:03:29,200 Speaker 1: recommend reading product disclosure documents before deciding to invest.