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Dairy firms target growing international opportunities

By Anthony Fletcher , 26-Jun-2006

The top dairy firms have become even larger due to continued acquisition, according to the latest report from Leatherhead International (LFI).

The fourth edition of Key Players in the Global Dairy Industry, which profiled 34 leading companies, found that 22 completed merger and acquisition deals in 2003, 19 in 2004, 16 in 2005 and 7 to date in 2006.

Most of these deals involved cross-border purchases. Indeed, internationalisation remains a key focus for most of the world's leading dairy firms.

 

All of the world's largest dairy firms operate in more than one country and some of them are truly international with activities in every part of the world. At the same time, brands are also becoming more international, with many companies having worked to reorganise their product ranges in recent times in order to reduce the number of their brands and ensure that their strongest lines are available on a multinational level.

 

With regard to NPD among the world's dairy leaders, key trends include the greater provision of value-added dairy products in place of commodities, often via the introduction of healthy ingredients or more convenient formats.

 

Nestle remains at the head of the global dairy rankings, with sales of $18.7bn in 2005, compared with $10.5bn for its closest rival, America s Dean Foods. According to Leatherhead International, this is well ahead of the next three businesses: Danone ($8.94bn), Dairy Farmers of America ($8.91bn) and Fonterra ($8.69bn).

 

Other companies with dairy turnover of over $5bn include Lactalis, Arla Foods, Unilever, Kraft Foods and Friesland Foods.

 

The report also suggests that, geographically, there is a broad spread among the market leaders, with the top five alone including two European, two American and one New Zealand firm. Overall, of the 34 companies profiled, 21 are European, 8 are American, 4 are Japanese and 1 is from New Zealand.

 

However, as highlighted earlier, the world's leading dairy firms tend to be significant international forces so, whatever their roots, most of them operate in many regions outside their original homeland.

 

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