Twelve months ago, the sheep meat industry was seeking to replicate its dairy cousin.
The theory was to create a dominant entity - a meat version of Fonterra - which had the size and financial clout to influence markets and capture more value for suppliers.
The bid failed.
But it was with some irony that the dairy industry now appeared to be taking the first tentative steps down the industry-fragmented path taken and questioned by the meat sector.
This week a new private company, New Zealand Milk, announced it was seeking resource consent to build a milk powder plant in South Canterbury, the proposed site almost within view of another independent dairy processor, New Zealand Dairies (NZDL) at Studholme.
That brings to six the number of dairy companies operating a total of nine factories south of Christchurch.
Before Fonterra was established in 2001, milk processing and exporting was strictly controlled by the Dairy Board. Now it is a free market.
Lincoln University's head of farm management and agribusiness, Keith Woodford, said market forces were at work, but the new entrants had been helped by Fonterra.
"My own view is that Fonterra has accidentally made it somewhat easy for new companies by getting the share price unrealistically high."
Between 2002-03 and 2006-07 the fair value share rose from $4.38 to $6.79. It was now $4.47. Shareholders must own one share for every kg of milksolids (kg/ms) they supply.
Prof Woodford said the jury was also still out on whether Fonterra's dominance as an exporter had secured the market premiums for which it was created.
"The benefits of one structure are yet to be proven."
As a percentage of New Zealand's milk production, it has been estimated that Fonterra's share has fallen from about 96% in 2001 to 93% this year, but the total volume of milk produced has been growing at 2% to 3% a year.
It is understood every new competitor has cost Fonterra about 1% of the milk flow.
Prof Woodford said with Fonterra grappling with issues such as capital structure and with 21% equity, it could not afford to lose more market share.
"If they lose any more supply to new companies, it has to come out of their balance sheet and no company is comfortable when they are getting smaller."
There has been some shareholder disquiet at some of Fonterra's actions, viewed by critics as the dairy company strengthening its balance sheet at their expense.
It had stopped accepting contracted milk, removed a share buffer which meant all milk supplied had to have a share and it had changed its payment schedule.
Fonterra chief executive Andrew Ferrier said the company had to attract shareholders by means other than just its size, and he felt it was doing that.
It was unrealistic to expect to retain all suppliers, as some did not want to own shares. Others saw advantages in being closer to their dairy factory or did not want to be part of a large company.
While the value of its shares had been high, Mr Ferrier said they had fallen in value in recent months in line with all share values, but were still returning a 10% dividend.
He feared the dairy industry could splinter, but he would not speculate on the number of competitors or the dilution of supply for that to happen.
The new companies pitted traditional co-operatives against privately-owned entities and unsurprisingly Mr Ferrier went in to bat for co-operative ownership structure.
"Ultimately the farmer-suppliers own the business. There is nobody in the middle making a profit. Everything Fonterra earns goes back in to the farmers' pockets."
New Zealand Dairies (NZDL) was one of the first new players to set up and its chairman, Peter Lavery, expected more farmers to move from co-operatives to proprietary-owned companies, with most of those farmers converting farms to dairying.
"I'm not saying it will undermine Fonterra, but I think we will progressively see more people moving," he said.
Milk was supplied to his company under contract, but suppliers still had a co-operative ethic, he said, with an interest in what was happening at the Studholme factory and a desire to be involved.
"The co-operative ethic of the New Zealand dairy farmer will not go away overnight, but proprietary companies will have to demonstrate over time that they offer something different," he said.
Mr Ferrier questioned the business plan followed by some of the new companies, which he said was too reliant on producing milk powder which was sold in the same markets as Fonterra.
"The premise of a start-up business is to create a product that is unique and some how differentiate it, therefore selling it at a premium to the market. But, we have not seen evidence that they have been able to do that."
New companies did have the advantage of lower milk cartage costs from building factories close to suppliers, but without a range of products, they were at the mercy of commodity cycles, which prevented them consistently paying competitive milk prices.
He said that Westland, which was a powder producer, was feeling the impact as powder prices had plummeted in the last six months.
It was forecasting a payout this year of between $4.20 and $4.30 kg/ms compared with Fonterra's forecast of $5.l0, but Westland has also been hit by unfavourable foreign exchange hedging.
Mr Ferrier said Fonterra had a wide product mix - powder, proteins, butter and cheese, it had economies of scale with 23 plants, was a low-cost producer and had relationships and partnerships with customers around the world.
The new players have attracted foreign shareholding, due to the favourable market in recent years for dairy products, but that had changed.
"They are finding it harder going because they don't have anything to differentiate themselves over Fonterra."
Mr Lavery said Fonterra was unlikely to lose its dominance, but there was room for what he called second- and third-tier operators, as had happened in Australia.
Second-tier companies produced mainstream commodities but third-tier companies specialised in manufacturing cheese, desserts and formulated ingredients.
Mr Lavery, who has spent his whole career working in the Australian dairy industry, said more players brought investment, new ideas leading to diverse products, markets and technology and also greater breadth and depth.
"Much of this results from competition, one competitor endeavouring to match or better what he sees others doing."
Competition in New Zealand had come from foreign investors securing supply, and as Fonterra had also done in Australia and the United States.
Mr Lavery also said the new players helped benchmark milk prices, evident by the higher prices received by dairy farmers in Australia where several companies competed for milk.
He agreed with Mr Ferrier that it was not prudent to rely on one commodity and said NZDL's Russian owner, Nutritek, intended focusing the company on manufacturing nutritional foods, rather than commodity milk powder.
