NETHERLANDS – Rabobank of the Netherlands has released its annual Global Dairy Top 20 Report, ranking Lactalis, Nestlé, and Dairy Farmers America as the world’s top three dairy companies.
For the first time in a decade, French dairy cooperative Lactalis outpaced industry titan Nestlé to clinch the top spot in the prestigious ranking by the Dutch multinational banking and financial services company.
Lactalis was a surprise winner as it was ninth place in 2000, with a turnover of 4.8bn, and today boasts of being the world’s largest dairy position, with a turnover of US$23bn, an increase of more than 370% since the start of the century.
Since 2010, Lactalis has grown through approximately 60 deals, expanding its global footprint in the Middle East, Africa, and North and South America.
Rabobank predicts that Lactalis will most likely top the rankings next year as the pending acquisition of the Kraft Heinz natural cheese business and Groupe Bel’s Royal Bel Leerdammer, Bel Italia, Bel Deutschland, and Bel Shostka Ukraine, bring a combined annual turnover of about US$2.5bn into the company’s bottom line.
Nestlé, on the other hand lost its top position after selling sold its US-based ice cream business to Froneri in 2019.
Rabobank however notes that Nestlé’s estimated 2020 dairy-related turnover of US$20.8bn still represents a 60% increase compared to the start of the century.
Source: Rabobank. Figures are US$bn dairy turnover for 2020, predominantly dairy sales and based on 2020 financials and M&A between January 1, 2021 and June 30, 2021. Pending deals are not included.
The US’s largest dairy cooperative, Dairy Farmers of America (DFA), retains the third position which it clinched from Danone in 2019 after acquiring Dean Foods. DFA and Danone both reported lower dairy-related sales in 2020.
DFA disposed of some assets and milk volumes due to the Dean Foods’ acquisition, while Danone faced some headwinds in the infant formula market.
Rabobank noted that, like Nestlé, Danone’s portfolio continues to evolve, with a greater focus on acquisitions in the dairy alternatives space.
It further noted that the rapid expansion of dairy alternatives is blurring the definition of milk and that the sales growth of liquid milk and yogurt alternatives – especially oat- and almond-based alternatives – have not gone unnoticed.
Most significantly, Danone’s turnover in dairy alternatives, following its acquisition of WhiteWave Foods in 2017, was recorded at €2.2 billion (US$2.5 billion) in 2020, a gain of 15 percent compared to the previous year.
Adding these sales would lift Danone to third position. Dairy alternative du jour Oatly surged in market capitalization, to more than US$10 billion, after its IPO debut in May 2021, making it a major contender if it were to be included in the global top 20 dairy list.
The biggest upward movement in the top 20 is Kraft Heinz jumping three places to 15 overall, however, Rabobank is predicting it will drop out of the top 20 next year.
Rabobank’s 2021 report also highlights increased consumers awareness of environmental challenges in the context of the pandemic.
“Consumer sentiments are being heard, and many companies included in the Global Dairy Top 20 have made sustainability commitments,” Rabobank noted.
For 2022, Rabobank is predicting investment activity to remain robust in the ontrend channels and categories, including specialty cheese and innovative dairy ingredients like human milk oligosaccharides.
The Bank also expects more investments to be channeled into dairy alternatives ranging from plants and fermentation to cell-based, and lifestyle nutrition.
Issued annually, Rabobank’s Global Diary Top 20 Report has been recognized as one of the most authoritative rankings of the dairy industry, putting industrials leaders in the spotlight based upon their sales data and financial statements.
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