The Top 10 Dairy Companies

  • May 2008
  • -
  • SCRIP Insights
  • -
  • 174 pages

The Top 10 Dairy Companies

Increasing prices of raw materials, demand for dairy products in emerging markets and the drive for health and wellness, are putting pressure on dairy manufacturers to develop innovative but cost effective products. Key growth strategies for many of the top companies include strengthening brand portfolios and expansion in growth markets such China and India.

The Top 10 Dairy Companies is a report published by Business Insights that analyzes the innovation and growth strategies of the top 10 players in the dairy industry. This report identifies the product areas that the top 10 players are seeking to develop and also highlights the respective markets where each individual company is looking to grow. It also examines the comparative strengths, weaknesses, opportunities and threats facing the world’s leading dairy companies. Benchmark your performance against the leading dairy companies using market share and financial data in this report...

Key findings from this report...

• The global dairy industry is highly fragmented, with the top 10 companies representing about 22.4% of the total market size in 2006.
• The global dairy market reached $402.5bn in 2006, representing a five-year CAGR of 3.7% and it is forecast to reach about $487.2bn in 2011, representing a five-year CAGR of 4.9%.
• The leading dairy companies are focussing innovation on organic and functional dairy. Other latest developments have included products that are low fat, contain natural ingredients and no preservatives.
• Nestlé was the global industry leader with a 5.0% market share in 2006, followed by Danone (2.5%) and Dean Foods (2.4%).
• Parmalat’s dairy business recorded revenues of R3,546m ($4,861m) for the fiscal year ended December 2007, an increase of 6.1% over 2006. Higher revenues in fiscal 2007 were mainly due to higher sales volume in Canada and Italy. The dairy revenues accounted for 91.8% of its consolidated revenues in 2007.

Some key issues answered by this report...
• Growing demand for dairy products in Asia is driving global milk prices. The increase in demand has been fuelled by population growth, increases in personal income and Western-style influences on the Asian diet (demand for non-native foods such as cheese slices, yogurt and skimmed milk among young urbanites).
• Contracting European supply of milk. The milk quota system (introduced in 1984) has placed a limit on the amount of milk produced each year by EU dairy farmers. EU-25 milk production declined 0.3% during September 2004–07 and 1.4% in September 2007.
• Adverse climatic conditions in Australia and New Zealand. Australia and New Zealand are the two major milk exporters in the world. In 2005, both countries witnessed a drop in milk production
due to adverse climatic conditions, with Australia’s output falling 0.3% and New Zealand down 4.0% year-on-year. Decline in output of world’s major milk exporters will impact the global milk supply and therefore, will lead to a rise in milk prices.

Some key questions answered by this report...
• What are the trends in the global dairy industry?
• Who are the top 11 to 20 companies?
• Which regions and segments offer the leading dairy companies the greatest growth opportunities?
• How do the leading dairy companies compare in terms of financial performance and coverage by country and category?
• What are the key strategies of the leading dairy companies and how do these strategies drive revenue and market share?

This new report will enable you to...

• Benchmark the world’s leading dairy companies with this report’s ranking of the top 10 companies, detailing their financial performance and future prospects.
• Identify and target future growth areas from this report’s analysis of the acquisitions and divestments made by leading dairy companies and their strategies for growth.
• Understand the key trends in the dairy market and the impact that they are expected to have, using this report.
• Enhance your product development strategies with this report’s analysis of the leading dairy companies’ innovation and NPD strategies and recent product launches.
• Create more effective competitive strategies based on this report’s SWOT analyses of the top dairy companies.
• Assess the performance of leading dairy companies, identify their strengths and weakness and learn about their growth strategies with this report...

Table Of Contents

Table of Contents
The Top 10 Dairy Companies
Executive Summary 16
Market context 16
Nestle 17
Danone 17
Dean Foods 18
Unilever 18
Lactalis 19
Dairy Farmers of America 19
Arla Foods 20
Kraft Foods 20
Friesland Foods 21
Parmalat 21
Conclusions 22
Chapter 1 Introduction 24
What is this report about? 24
Methodology 25
Chapter 2 Market context 28
Summary 28
Introduction 28
Market overview 29
Market size and growth 29
Top trends in the dairy market 31
Increasing raw material prices 31
Growing demand for dairy products in China and Asia 32
Contracting European supply 32
Adverse climatic conditions in Australia and New Zealand 33
Rising cost for animal feed 34
Shift towards health and wellness 34
Chapter 3 Nestle 36
Summary 36
Company information 36
History 37
Recent financial performance 38
Acquisitions and divestments 40
Growth strategies 40
Popularly positioned products (PPPs) 40
DSD initiative 41
Luxury and premium products 41
Innovation and NPD 41
SWOT analysis 43
Strengths 44
Strong brand portfolio 44
Strong presence in emerging markets 44
Weaknesses 44
Product recalls 44
Opportunities 45
Expansion in Brazil 45
Growing health concerns 45
Threats 45
Rising milk prices 45
Chapter 4 Danone 48
Summary 48
Company information 48
History 49
Recent financial performance 50
Acquisitions and divestments 52
Growth strategies 52
Geographic expansion 52
Innovation and NPD 53
SWOT analysis 55
Strengths 56
Strong market position in FDP market 56
Strong brand portfolio 56
Weaknesses 56
Overdependence on Europe 56
Opportunities 57
Entering the organic food market 57
Geographic expansion 57
Threats 57
Government regulations 57
Chapter 5 Dean Foods 60
Summary 60
Company information 60
History 61
Recent financial performance 62
Acquisitions and divestments 64
Growth strategies 65
Leveraging DSD network 65
Morningstar and WhiteWave platforms 65
Innovation and NPD 66
SWOT analysis 68
Strengths 69
Strong market share in the US 69
Strong brand portfolio 69
Weaknesses 70
Customer concentration 70
Low EBITDA 70
Opportunities 70
Growing demand for organic dairy products 70
Expansion of farmers network 71
Threats 71
Increase in raw material and dairy commodity costs 71
Chapter 6 Unilever 74
Summary 74
Company information 74
History 75
Recent financial performance 76
Acquisitions and divestments 78
Growth strategies 78
Restructuring business 78
Innovation and NPD 79
SWOT analysis 81
Strengths 81
Strong market share in the ice cream segment 81
Strong RandD capabilities 82
Weaknesses 82
Decreasing cash flow from operation 82
Opportunities 82
Increasing health consciousness 82
Threats 83
Seasonal demand for ice cream 83
Chapter 7 Lactalis 86
Summary 86
Company information 86
History 87
Recent financial performance 87
Acquisitions and divestments 89
Growth strategies 89
Expansion through acquisitions 89
Innovation and NPD 90
SWOT analysis 91
Strengths 91
Strong market position in French milk market 91
Weaknesses 92
Weak internal control 92
Opportunities 93
Increase of production capacity 93
Threats 93
Price fluctuations in dairy products 93
Chapter 8 Dairy Farmers of America 96
Summary 96
Company information 96
History 97
Recent financial performance 97
Acquisitions and divestments 99
Growth strategies 99
Investing In core business units 99
Innovation and NPD 100
SWOT analysis 101
Strengths 101
Leadership position in the US 101
Weaknesses 102
Divestment of plants 102
Opportunities 102
Growing butter and margarine market in the US 102
Threats 103
Increasing competition 103
Chapter 9 Arla Foods 106
Summary 106
Company information 106
History 107
Recent financial performance 107
Acquisitions and divestments 109
Growth strategies 110
Focus on core business 110
Drive growth in selected markets 110
Innovation and NPD 111
SWOT analysis 113
Strengths 113
Strong sales growth in the UK 113
Weaknesses 114
Lagging behind on revenue growth 114
Geographic concentration 114
Opportunities 114
Increasing whey processing 114
Opportunities in Algeria 114
Threats 115
Consumer boycott 115
Falling milk supply 115
Chapter 10 Kraft Foods 118
Summary 118
Company information 118
History 119
Recent financial performance 120
Acquisitions and divestments 121
Growth strategies 122
Strengthening brand portfolio 122
Creating brand awareness 122
Innovation and NPD 122
SWOT analysis 124
Strengths 125
Strong distribution network 125
Weaknesses 125
Geographic concentration 125
Opportunities 125
New offerings in Cheese 125
Cost cutting 126
Threats 126
Consolidation of retail sector 126
Chapter 11 Friesland Foods 128
Summary 128
Company information 128
History 129
Recent financial performance 129
Acquisitions and divestments 131
Growth strategies 132
Strengthening position in Southeast Asia 132
Concentrating Central European production 132
Vision 2015 133
Innovation and NPD 133
SWOT analysis 135
Strengths 136
Strong market and brand position 136
Co-operative business structure 136
Weaknesses 137
Declining profits from Asia and Africa regions 137
Opportunities 137
Friesland Foods and Campina merger 137
Focus on low-income segment in Indonesia 138
Threats 138
Rising commodity costs 138
Chapter 12 Parmalat 140
Summary 140
Company information 140
History 141
Recent financial performance 141
Acquisitions and divestments 143
Growth strategies 144
Focus on functional and premium products 144
Innovation and NPD 144
SWOT 146
Strengths 147
Strong position in Italy 147
Weaknesses 147
Major presence in mature markets 147
Opportunities 147
Growing trend towards health and wellness 147
Threats 148
Competition from private labels 148
Chapter 13 11-20 companies 150
Bongrain 150
Company description 150
Recent financial performance 150
Innovation and NPD 151
Morinaga Milk Industry 152
Company description 152
Recent financial performance 152
Innovation and NPD 153
Campina 153
Company description 154
Recent financial performance 154
Innovation and NPD 154
Meiji Dairies 155
Company description 155
Recent financial performance 156
Innovation and NPD 156
Land O’ Lakes 157
Company description 157
Recent financial performance 158
Innovation and NPD 158
Saputo 159
Company description 159
Recent financial performance 160
Innovation and NPD 161
Sodiaal 161
Company description 162
Recent financial performance 162
Innovation and NPD 162
Fonterra 163
Company description 163
Recent financial performance 163
Innovation and NPD 164
Fromageries 165
Company description 165
Recent financial performance 165
Innovation and NPD 166
Yakult Honsha 166
Company description 167
Recent financial performance 167
Innovation and NPD 168
Chapter 14 Conclusions 170
Summary 170
Introduction 170
Revenue overview 170
Growth strategies 171
Expansion into emerging markets 171
Health and wellness 171
Category focus 172
Outlook 172
Glossary 173
Index 174
List of Figures
Figure 2.1: Global dairy market size, ($m), 2002-06 29
Figure 2.2: Top 10 dairy companies market share, (%), 2006 30
Figure 2.3: EU-25 average milk prices, (€/100kg), 2003-07 31
Figure 2.4: Milk production in EU-25, (thousand tones), 2004-07 32
Figure 2.5: Annual growth in milk production, (%), 2002-06 33
Figure 3.6: Nestle dairy financial performance, ($m), 2005-07 39
Figure 3.7: Nestle’s recent dairy product launches, by category, 2004-07 42
Figure 3.8: Roxie Ice Cream and Haagen-Dazs Ice Cream 43
Figure 3.9: Nestle SWOT analysis 43
Figure 4.10: Danone dairy financial performance, ($m), 2004-06 51
Figure 4.11: Danone’s recent dairy product launches, by category, 2004-07 54
Figure 4.12: La Serenisima Yogurisimo Go Yogur Licuado Endulzado and Essensis Pro-Nutris
Yogurt Drink 55
Figure 4.13: Danone SWOT analysis 55
Figure 5.14: Dean Foods dairy financial performance, ($m), 2005-07 63
Figure 5.15: Dairy Group revenue breakdown (%), 2007 64
Figure 5.16: Dean Foods’ recent dairy product launches, by category, 2004-07 67
Figure 5.17: Rachel's Organic Bio-Live Yogurt 68
Figure 5.18: Dean Foods SWOT analysis 68
Figure 6.19: Unilever dairy financial performance, ($m), 2004-06 77
Figure 6.20: Unilever’s recent dairy product launches, by category, 2004-07 80
Figure 6.21: Becel Margarine - Omega 3 Plus, Popsicle SlowMelt Long Lasting Pops and Breyers
Swirls Ice Cream 80
Figure 6.22: Unilever SWOT analysis 81
Figure 7.23: Lactalis financial performance, ($m), 2006-07 88
Figure 7.24: Lacatalis’ recent dairy product launches, by category, 2004-07 90
Figure 7.25: Dukatol and Galbani mozzarella mini light 91
Figure 7.26: Lactalis SWOT analysis 92
Figure 8.27: DFA financial performance, ($m), 2004-06 98
Figure 8.28: DFA business segments breakdown, share of sales, 2006 99
Figure 8.29: DFA’s recent dairy product launches, by category, 2004-07 100
Figure 8.30: Borden Spreadable Butter with Canola Oil, Breakstone's Spreadable Butter with
Canola Oil and Keller's Spreadable Butter with Canola Oil 101
Figure 8.31: DFA SWOT analysis 102
Figure 9.32: Arla Foods dairy financial performance, ($m), 2005-07 108
Figure 9.33: Arla Foods’ recent dairy product launches, by category, 2004-07 112
Figure 9.34: Yoggi Yalla! Drickyogurt 112
Figure 9.35: Arla Foods SWOT analysis 113
Figure 10.36: Kraft Foods dairy financial performance, ($m), 2005-07 120
Figure 10.37: Kraft Foods’ recent dairy product launches, by category, 2004-07 123
Figure 10.38: LiveActive Cheese 124
Figure 10.39: Kraft Foods SWOT analysis 124
Figure 11.40: Friesland Foods dairy financial performance, ($m), 2006-07 130
Figure 11.41: Friesland Foods’ recent dairy product launches, by category, 2004-07 134
Figure 11.42: Friesche Vlag Slaap Lekker and Dios-Mezes 135
Figure 11.43: Friesland Foods SWOT analysis 135
Figure 12.44: Parmalat dairy financial performance, ($m), 2006-07 142
Figure 12.45: Parmalat’s recent dairy product launches, by category, 2004-07 145
Figure 12.46: Black Diamond Ficello Smart Growth String Cheese and Latte Parziamente Scremato
146
Figure 12.47: Parmalat SWOT analysis 146
Figure 13.48: Der Milde Chavroux Frischkaese aus 100% Ziegenmilch - 8% Fett 151
Figure 13.49: Eskimo Ryofudo Ice Cream and Eskimo Pino Ichigo 153
Figure 13.50: Campina Fruttis Yogurt and Campina Fruttis Creamy Yogurt 155
Figure 13.51: Meiji Bulgaria Yogurt Teito Nameraka 156
Figure 13.52: Alpine Lace Variety Pack of Sliced Cheese 159
Figure 13.53: Dairyland Alive Yogurt 161
Figure 13.54: Panier de Yoplait 0% Fat Yogurt - Quartiers 162
Figure 13.55: Perfect Italiano Ricotta Cheese 164
Figure 13.56: Kiri Golo and Laughing Cow Cheese Spread 166
Figure 13.57: Yakult no Seinyu Tappuri Yogurt 168
List of Tables
Table 2.1: Top 10 dairy companies turnover, ($m), 2004-06 30
Table 3.2: Nestle key milestones 37
Table 3.3: Nestle dairy financial performance, (CHFm), 2005-07 38
Table 3.4: Nestle business segment performance, (CHFm) 2007 39
Table 3.5: Nestle key dairy brands 41
Table 4.6: Danone key milestones 49
Table 4.7: Danone dairy financial performance, (€m), 2004-06 50
Table 4.8: Danone business segment performance, (€m), 2006 51
Table 5.9: Dean Foods key milestones 61
Table 5.10: Dean Foods dairy financial performance, (€m), 2005-07 62
Table 5.11: Dean Foods dairy business segment performance, ($m), 2005-07 63
Table 5.12: Dean Foods key dairy brands 66
Table 6.13: Unilever key milestones 75
Table 6.14: Unilever dairy financial performance, (€m), 2004-06 76
Table 6.15: Unilever business segment performance, (€m), 2006 77
Table 6.16: Unilever key dairy brands 79
Table 7.17: Lactalis key milestones 87
Table 7.18: Lactalis financial performance, (€m), 2006-07 88
Table 8.19: DFA key milestones 97
Table 8.20: DFA financial performance, ($m), 2004-06 98
Table 9.21: Arla Foods key milestones 107
Table 9.22: Arla Foods dairy financial performance, (DKKm), 2005-07 108
Table 9.23: Arla Foods business segment performance, (DKKm), 2007 109
Table 9.24: Arla Foods key dairy brands 111
Table 10.25: Kraft Foods key milestones 119
Table 10.26: Kraft Foods dairy financial performance, ($m), 2005-07 120
Table 10.27: Kraft Foods dairy business segment performance, ($m), 2005-07 121
Table 10.28: Kraft Foods business segment performance, ($m), 2007 121
Table 10.29: Kraft Foods dairy key brands 122
Table 11.30: Friesland Foods key milestones 129
Table 11.31: Friesland Foods dairy financial performance, (€m), 2006-07 130
Table 11.32: Friesland Foods business segment performance, (€m), 2007 131
Table 11.33: Friesland key dairy brands 133
Table 12.34: Parmalat key milestones 141
Table 12.35: Parmalat dairy financial performance, (€m), 2006-07 142
Table 12.36: Parmalat dairy business segment performance, (€m), 2006-07 143
Table 13.37: Bongrain snapshot 150
Table 13.38: Bongrain dairy financial performance, (€m), 2004-06 151
Table 13.39: Morinaga Milk Industry snapshot 152
Table 13.40: Morinaga Milk Industry dairy financial performance, (Â¥m), 2004-06 152
Table 13.41: Campina snapshot 153
Table 13.42: Campina dairy financial performance, (€m), 2004-06 154
Table 13.43: Meji Dairies snapshot 155
Table 13.44: Meiji Dairies dairy financial performance, (Â¥m), 2005-07 156
Table 13.45: Land O’ Lakes snapshot 157
Table 13.46: Land O’Lakes dairy financial performance, ($m), 2004-06 158
Table 13.47: Saputo snapshot 159
Table 13.48: Saputo dairy financial performance, (C$m), 2005-07 160
Table 13.49: Sodiaal snapshot 161


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