The total turnover climbed by 5% in euro terms. Top 20 merger and acquisition activity was reasonably constant in 2021 but fell in the first part of 2022.
According to Richard Scheper, Rabobank’s dairy analyst, dairy demand firmed internationally as a result of the rebound in foodservice channels after the first Covid-19 epidemic and continuing robust retail channel sales. “Dairy product prices surged to significant levels in 2021, owing to lower-than-expected milk production increases in the key exporting countries and extraordinarily strong Chinese import demand.”
According to Scheper, the movers and shakers characterize this year’s list. Both turnover increase and strategic actions were stronger than in previous years, creating a shift in the ranking. Strategic repositioning and mergers and acquisitions, for example, led in Froneri’s arrival and Kraft Heinz’s exit from the list.
The second half of the leader board is still congested, with little financial gap between the firms. In 2020, the gap between the eight corporations in the bottom half of the chart was less than $1 billion. This year, four firms had revenues of less than US $0.15 billion.
Dairy alternatives (from drinks, yogurts, frozen desserts, and cheese to hybrid items) are becoming increasingly prominent in the product portfolios of the Top 20, making it more difficult to extract pure dairy earnings. As a consequence, the definition of dairy is becoming more ambiguous.
The four worldwide cooperative behemoths are clustered towards the bottom of this year’s list. Each has some degree of constraint in their native market for organic development. Dairy Farmers of America continued to integrate Dean Foods businesses in 2021, while Fonterra and FrieslandCampina divested non-core assets.
Privately-held According to Rabobank’s newest Global Dairy Top 20 report, French dairy business Lactalis has reinforced its position as the world’s biggest dairy company.
According to the research, Lactilis’ sales increased to USD26.7 billion in 2021 (up USD4.7 billion or 16.2 percent from the previous year), putting it considerably ahead of second-placed Nestlé of Switzerland, which had turnover of USD21.3 billion over the same time.
Lactalis’ double-digit percentage sales growth, according to Rabobank senior agri analyst Emma Higgins, was driven by the acquisition of KraftHeinz’s US natural cheese business and Groupe Bel’s Royal Bel Leerdammer, Bel Italia, Bel Deutschland, and Bel Shostka Ukraine, with these purchases adding a combined estimated annual turnover of about USD2.1 billion.
“With the recent acquisitions of Australian-based Jalna Dairy Foods and German-based Bayerische Milchindustrie’s (BMI) Fresh Dairy Division, this acquisition frenzy has extended until 2022,” she added.
Danone (France) surpassed Dairy Farmers of America (US) to take third position on the list (turnover of USD20.9 billion) (USD19.3 bln). Yili (China) stayed sixth despite acquiring Infant Milk Formula company Ausnutria, which helped boost its 2021 revenue to USD18.2 billion, up from USD13.8 billion the previous year.
Ms Higgins said that New Zealand’s Fonterra took sixth place on the list for the third year in a row, with 2021 sales of USD14.8 billion, up USD1.2 billion from the previous year.
“Fonterra completed the sale of its two wholly-owned China agricultural centres in 2021.” “The sale of DPA Brazil and Soprole, as well as future adjustments in the Australian-based firm, are still on the table,” she stated.
“Despite the sales of its Chinese hubs, wider China, notably foodservice sales, remains a significant market for Fonterra, as do other nations in the Asia Pacific area.”
“Fonterra’s annual results for the fiscal year 2022 will be released next month.”
More dairy firms are integrating their climate goals with the campaign Science Based Targets (SBTi). To far, eight of the top twenty corporations have publicly committed to (some of) the SBTi aims or have targets that are deemed linked with SBTi.
Rabobank anticipates that this figure will rise in the near future as examination and goal setting continue. Dairy firms are focusing on climate and environmental goals for 2030, as well as net-zero goals for 2050.
Another good year for dairy sales.
Rabobank also predicts that the combined Global Dairy Top 20 turnover will be high again next year, as underlying dairy commodity prices reach record or near-record levels throughout the world as a result of the Ukraine conflict and growing inflation.
“However, decreased global dairy consumption is expected in the second half of 2022 owing to a mix of Covid-related lockdowns, inflation affecting consumers’ spending power, and other economic headwinds,” says Scheper. Some corporations may struggle to preserve their positions and advances in this year’s list due to the weakness of local currencies, particularly the euro versus the US dollar.”
