While the large cooperative dairy cooperatives FrieslandCampina and Arla put their 'non dairy' divisions up for sale, dairy giant Danone invested in non-dairy production that was not directly related to milk. This is apparent from the Rabo Global Dairy Top 20 report presented this week.
For many companies the question is whether they invest in 'non dairy' or not. Arla decided to sell the Rinkeby soft drink division and FrieslandCampina has put the Riedel division up for sale.
From third to second place
The private Swiss Nestlé always leads the list with a turnover of 21,7 billion euros in 2016. Followed by the French private Danone, which rose from third to second place in the Global Dairy top 20, partly thanks to investments in WhiteWaveFoods, with an annual turnover of 16,6 million Euros. FrieslandCampina rose from sixth to fifth place thanks to the 51% acquisition in Pakistan's Engro Foods and exchanged pennies with the New Zealand cooperative Fonterra.
On acquisition path
The largest dairy cooperative in the world, the French Lactalis, invested in Romania, Belarus, Chile, China and the United States, but had to give second place to Danone. Next year, Lactalis will rise again in the ranking, Rabobank expects. The biggest faller on the list is the East German Müller, which dropped from fifteenth to nineteenth place with an (estimated) turnover of 4,4 billion euros. The two Chinese dairy giants on the list, Yili and Mengniu, will need to be on the acquisition path outside of China in order to rise further on the 'Global Dairy top 20' list. Their annual turnover remains at 8,1 and 7,4 billion Euros respectively.
price drop
In 2016, many dairy companies lost turnover for the second year in a row, due to the dramatic fall in prices on the world dairy market. But the time of organic growth will return, analysts at Rabobank expect. Milk prices are rising again and milk volumes no longer show unbridled growth. Risk spreading is an important point of attention, partly in view of Brexit. Potential and announced changes in trade agreements and changes in the field of the environment and food security also demand the attention of the dairy industry worldwide, according to Rabobank.
Pay even more
In the LTO Nederland milk price comparison, FrieslandCampina scores best in the list of largest dairy companies in Europe. Companies from the United States and the New Zealand Fonterra pay even more. Up to and including April FrieslandCampina paid out 4,2 (including supplementary payment) for milk with 3,4% fat and 500.000% protein (at 32,27 litres). Over the same period, Fonterra quotes an average of 32,38 cents per liter and the French Lactalis notes 31,95 cents. The East German Müller does not get more than 27,47 cents.
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