Australia’s omission for corporate dairy league table

French giant Lactalis is the world’s largest dairy company while Indian and Chinese processors made big gains on the corporate league table. See what they all turnover.

French giant Lactalis is the world’s largest dairy company while Indian and Chinese processors made big gains on the corporate league table.

A new report from Rabobank showed Lactalis retained its world-beating position in 2021, with its turnover rising by more than 16 per cent, or roughly US$4.7 billion, last calendar year to sit at US$26.7 billion.

The company, headquarted in Laval (about 300km southwest of Paris) owns some of the world’s best-known brands such as Parmalat, Président and Stonyfield Farm.

Lactalis was well clear of corporate dairy list silver medallist Nestle, in second place with a 2021 turnover of US$21.3 billion.

Another French processor, Danone, clinched the bronze medal with US$20.9 billion, while Dairy Farmers of America and Chinese juggernaut Yili rounded off the top five with 2021 turnovers of US$19.3 and US$18.2 billion respectively.

Rabobank analyst Richard Scheper said several key corporate moves by Lactalis consolidated the French giant’s number one placing.

“Lactalis’ double-digit percentage sales growth was driven by the acquisition of the Kraft Heinz’s American natural cheese business,” he said.

“(Lactalis also purchased) Groupe Bel’s Royal Bel Leerdammer, Bel Italia, Bel Deutschland, and Bel Shostka Ukraine, adding a combined estimated annual turnover of about US$2.1 billion.”

Mr Scheper said Lactalis were on track to retain top spot this year with an “acquisition spree” involving Jalna Dairy Foods in Australia as well as the German-based Bayerische Milchindustrie’s fresh dairy division.

Australian-owned dairy processors such as Bega did not feature in Rabobank’s global top 20 companies, although acquisitions Down Under by Canadian giant Saputo in the past decade have guaranteed the Montreal-based company a place in the top 10.

Dairy Australia analyst John Droppert said it was unsurprising that a domestic player did not feature, given the competitive environment locally.

“The variety of processors here in Australia would certainly be seen as a good thing by farmers – it’s one of the reasons why there were such strong farmgate prices paid this season,” he said.

“But another reason why (an Australian processor) doesn’t feature is the sheer scale of milk production overseas.

“On rough numbers, Australian milk production sits around 8.5 billion litres, give or take, in recent years. Compare that to the European Union with an output of 150 billion litres, 100 million litres roughly from the United States, even New Zealand on about 20 billion litres annually. So with the diversity in the sector, that 8.5 billion litre milk pool is fragmented into smaller numbers, so there’s not one single big player (to feature on the list).”

The authors of the Rabobank reported noted that the rise of dairy ‘alternatives’ — such as plant-based milk, ‘vegan cheese’ and hybrid products — had become more commonplace in the portfolios of top 20 companies, making it more difficult to extract pure dairy revenues compared to previous years.