Megadeals passed dairy products

The global dairy top 20, which Rabobank compiles annually, shows only minor changes. Overall, sales grew by 7,1%, if calculated in dollars. Nestlé retains first place, but the gap to number 2 is growing. That number 2 is no longer Danone, but also the French Lactalis.

The Dutch dairy cooperative FrieslandCampina must Fonterra and thus drops to 6th place. Once again, the difference between the two cooperatives is minimal. However, the biggest change is the German DMK. The company manages to rise 2 places to 2th place revenue however, is only half of FrieslandCampina and Fonterra.

Dominance comes from cooperatives
Cooperatives remain dominant in the dairy sector. These companies take places 4 to 7. According to Rabobank, this is partly the explanation behind the lack of so-called mega deals in the sector. "The takeovers in the dairy sector are often small and have only a limited financial impact."

Within a cooperative, a struggle is often seen in terms of value creation for the so-called 'farmholder' (the shareholder). This seizes the money that can no longer be invested in growth (via acquisitions or expansions). "It also means that money must be sought in other good and innovative ways."

Further growth
Rabobank expects the market to decline by 30% in the coming decades value and volume will grow. This is the result of growing demand, urbanization and growing disposable income. It is still difficult to say what this will mean for the companies. However, it is clear that the companies will show greater differences, according to the bank.

For example, there are companies (such as Danone) that are looking at investments outside the dairy sector, such as the acquisition of White Wave. Companies such as FrieslandCampina and Arla (under the influence of environmental regulations) want to look for unique, local products to introduce.
Rabobank's top 20 shows a number of shifts.