Asian Dairy Companies Gaining Ground

UTRECHT, The NetherlandsRabobanks new Global Dairy Top-20 shows the recent growth of Japan and China in the world dairy sector. The Top-10 is still headed by Nestlé, but Japans Meiji Dairies moved up 3 places to number 11, and Yili from China shot into the rankings for the first time at number 17.

Changing diets and strength in numbers are key to understanding the growth of demand in the Asian markets, according to Mark Voorbergen of Rabobanks Food & Agribusiness Research and Advisory. The Chinese government is helping create a whole new generation of dairy consumers by promoting a school milk programme. So Chinese dairy companies will have ample opportunity to increase sales simply by keeping up with domestic market growth.

But volume growth is only happening in developing regions like China, South East Asia and selected markets in the Middle East, Africa and Latin America. For the developed markets of Europe, the USA and New Zealand, the main growth challenge is to introduce new characteristics often related to health and convenience - to standard dairy products that the consumer is willing to pay for.

Brazil is tipped for the Top-20 next year, assuming successful completion of the new conglomerate made up of Itambé, Centro Leche, Confepar, Mineiras Cemil and Mines Milk. Mexicos Grupo Lala is also bubbling under, following its acquisition of National Dairy Holdings last year.

Fragmentation in the German market and the slow pace of consolidation between Nordmilch and Humana Milchunion has knocked Germany out of the Top-20 entirely this year. Bel, the French producer of La Vache qui rit came in at number 19 but Mark Voorbergen expects it may lose its position once compatriots Entremont and Sodiaal complete their merger.

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