NETHERLANDS – FrieslandCampina, a Dutch dairy cooperative, has announced plans to save US$420 million to US$525 million annually starting in 2026 as part of its new business strategy called Expedition 2030.
The cost-saving initiative is aimed at improving profitability and business margins while targeting sustainable growth.
The company will reveal the organizational implications and associated one-time restructuring costs in mid-December, and job cuts have already been announced, particularly in optimizing butter production and focusing on high-performing brands.
Jan Derck van Karnebeek, CEO of Royal FrieslandCampina, stressed the company’s goal to generate maximum value for its members by producing top-quality products from their milk. T
The cost-saving measures will begin in 2024, with a focus on reducing overhead costs. Some of these savings will be used to offset inflation, while the rest will be equally divided between investing in sustainable growth and increasing net profit.
FrieslandCampina also plans to become a “global leader” in proteins and probiotics by doubling its whey protein isolates production capacity at its Borculo facility in the Netherlands.
This expansion aims to meet the growing demand for high-quality ingredients in the sports and infant nutrition markets.
In addition to its cost-saving and growth initiatives, FrieslandCampina has set sustainability goals, aiming to achieve net climate-neutral dairy production by 2050 at the latest.
These strategic moves come as dairy commodity prices have experienced nine consecutive months of decline, with international prices across all dairy products falling, according to the UN Food and Agriculture Organization (FAO).
The FAO Dairy Price Index averaged 108.6 points in September, down 2.6 points (2.3 percent) from August, marking the ninth consecutive monthly decline, and as much as 34.1 points (23.9 percent) below its value in the corresponding month last year.
International prices across all dairy products declined in September, principally underpinned by lacklustre import demand for spot- and near-term deliveries amidst ample stocks in leading producing regions, despite an upsurge in demand towards the end of the month for some dairy products in Southeast Asian countries.
In addition, rising export availabilities in New Zealand in its new production season, limited internal demand in the European Union, and the impact of a weaker Euro against the United States dollar weighed on international dairy prices.
Despite the challenges in the dairy market, FrieslandCampina is positioning itself for long-term success through cost optimization, expansion, and sustainability efforts.