World dairy leader Fonterra Co-operative Group Limited of New Zealand said there are new ways to drive strong demand for dairy goods in China, including in the sector of ingredients despite the decline in foodservice, its half year report said.

The company on Thursday said the Co-op delivered a half year profit after tax of NZ$364 million ($248.8 million) and a group normalized EBIT of NZ$607 million, its 2022 Interim Results said.

Fonterra CEO Miles Hurrell said the Co-op's results for the first half of the financial year showed it is performing well, while creating the momentum needed to achieve its 2030 targets.

"We have continued to see firm demand for dairy as our team finds new ways to drive demand," said Hurrell of the Chinese market. "Ingredients benefited from strong demand and good margins."

Globally though, the company's normalized EBIT is down 20 percent to $236 million, particularly in foodservice where, despite steady volumes, higher milk prices impacted gross margins.

Hurrell says the Co-op has continued its focus on financial discipline and reducing debt.

Commenting on the Co-op's strategy globally, Hurrell said it's early days, but the Co-op's strategic choices to focus on New Zealand milk, be a leader in sustainability, and lead in dairy innovation and science, it is putting in place the necessary building blocks to grow foodservice, strengthen its consumer channel and move towards higher value products in Ingredients.

The company is doubling down using the power of social media in China. For example, the company promoted the idea of mozzarella on dumplings. The dish gained huge attention and sparked a new trend in the lead up to the Lunar New Year, the CEO said.

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