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DBweekly U.S. companies slide in RABOBANK’S GLOBAL TOP 20 GLOBAL DAIRY TOP 20, 2013 Rank Dairy turnover 2012 2013 2012 Company Country ($ U.S. billion) 1 1 Nestle Switzerland 30.1 2 2 Danone France 19.4 3 3 Lactalis France 18.0 4 4 Fonterra New Zealand 16.0 5 5 FrieslandCampina Netherlands 13.5 6 6 Dairy Farmers of America U.S. 12.1 7 8 Arla Foods Denmark/Sweden 10.8 8 7 Dean Foods U.S 8.8 9 12 Saputo Canada 8.4 10 10 Meiji Japan 7.7 11 11 Unilever* Netherlands/UK 7.5 12 15 Yili China 6.5 13 -- Morinaga Japan 5.8 14 14 Sodiaal* France 5.8 15 16 Mengniu China 5.7 16 9 Kraft Foods U.S. 5.7 17 13 DMK Germany 5.7 18 17 Bongrain France 5.3 19 19 Schreiber Foods* U.S. 4.5 20 18 Muller Germany 4.2 * Estimate Turnover data are for dairy sales only, based on 2012 financials and M&A transactions completed between Jan. 1 and June 15, 2013. Pending mergers and acquisitions not included in the dairy sales are the merger of 3A and Sodiaal, and Yashii’s acquisition by Mengniu. Source: Rabobank, 2013 Rabobank published a new report ranking the 20 largest companies in the global dairy industry, highlighting the trends affecting these giants. While the top five dairy players continue to drive consolidation and maintain a firm hold on their positions, there is much movement elsewhere, according to Rabobank’s Food & Agribusiness Research and Advisory team. China’s Yili and Mengniu continue their ongoing rise. In contrast, the lack of a U.S.-based global consolidator means the rankings of U.S. companies has declined, said Rabobank analyst Tim Hunt. Almost all of the top 20 firms felt the stiff headwinds of a slow global economy, European Union recession and maturing Western dairy markets in 2012. At least six companies saw their dairy revenues decline in 2013 (in local currency terms). Rabobank said slowing growth potential is placing more pressure on companies to consolidate local industries and seek growth via acquisition, contributing to the flurry of recent activity among the top 20. Companies are also actively positioning themselves to access growth markets abroad. Rabobank’s report said the Chinese government’s desire for domestic consolidation and vertical integration, together with 5 Dave Natzke | DairyBusiness Update dnatzke@dairybusiness.com local market growth, will almost certainly underpin further growth of Chinese giants Yili and Mengniu. Looking at the U.S., a combination of confinement to the domestic market and lack of sizable acquisitions has seen the rankings of U.S. companies decline in recent years. Kraft slipped seven places following the split of its U.S. grocery business from Mondelez, while Dairy Farmers of America also saw sales decline in 2012. Dean Foods fell one place on the back of the sale of WhiteWave and Morningstar and the contraction of the U.S. fluid market. “With the rapid growth of the Chinese giants, it is quite possible that the U.S. dairy giants will be pushed further down the list in coming years, with the global landscape largely being shaped by others at present,” explained Hunt. “Size should not be a goal in itself, and U.S. companies can participate in growth offshore by developing their export businesses. However, with much of the growth opportunities in dairy likely to come outside of the U.S. in coming years, U.S. companies will need to think about whether being an unaligned exporter with no offshore footing will be enough to secure a fair share of the growth and value available in the future.” Visit www.rabobank.com/f&a
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