Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 

Rabobank Global Dairy Top 20

Rabobank Global Dairy Top 20 – A Shuffling of the deck chairs

Dairy price recovery in 2017 has positively affected the combined turnover of the top 20 global dairy companies, which, in 2017, was up 7.2% on the year in US dollar terms and 5.1% in euro terms, according to RaboResearch’s latest Global Dairy Top 20 – A Shuffling of the Deck Chairs report.

“For the second consecutive year, there were no new entrants to the Dairy Top 20 list, with the USD 5bn threshold difficult to achieve due to a scarcity of large acquisitions or mergers.” says Peter Paul Coppes, Senior Analyst – Dairy. “However, while the names have remained the same, the order shifted in 2017.”

The world's largest food and beverage company, Switzerland's Nestlé, reigns supreme on the list, but the gap between number one and number two has narrowed. French Lactalis swapped places with compatriot Danone and moved into second place, boosted by its acquisitions of US yoghurt businesses Stonyfield and Siggi’s. Danone slipped to the third spot, after divesting Stonyfield following the acquisition of WhiteWave, reducing its stake in Yakult, and selling its holdings in the Al Safi Danone joint venture in Saudi Arabia.

Other highlights from the Dairy Top 20 report include:

Fonterra up one spot

Fonterra moved up one spot on the list into fifth, switching places with FrieslandCampina which dropped to sixth.

M&A is on the rise

Merger-and-acquisition (M&A) activity in the dairy sector grew in 2017, fuelled – as in other sectors – by the availability of cheap capital. However, unlike other food and agribusiness sectors, the mega-deals which did occur – Danone/WhiteWave and Saputo/Murray Goulburn – had limited impact on rankings within the Global Dairy Top 20.

Cooperatives still dominate... but are also challenged

The dairy sector trails other sectors in terms of industry consolidation through large-scale acquisitions. That is not to say that M&A doesn't occur in the dairy sector – it just means that dairy acquisitions tend to be limited in size and financial impact.

China considers global growth opportunities

Chinese companies need to address the integration of non-Chinese management as they consider growth opportunities around the globe. Increased collaboration between Chinese and non-Chinese companies in China has the potential to create a pipeline of global management talent.

Local or global... or both?

Historically, the dairy industry was very local. That is, milk production, processing, and consumption occurred locally. This was particularly true in markets dominated by fluid milk consumption. However, economies of scale in milk production and the conversion of milk into longer shelf-life products like butter, cheese, and dry dairy ingredients has required many dairy companies to be more globally-oriented.

The disruptors are here!

Rabobank sees an increased amount of ‘disruption’-based M&A deals, either defensive or opportunistic. By nature these deals are often small and involve start-ups, but they are growing in volume.


ends

© Scoop Media

 
 
 
Business Headlines | Sci-Tech Headlines

 

Up 0.5% In June Quarter: Services Lead GDP Growth

“Service industries, which represent about two-thirds of the economy, were the main contributor to GDP growth in the quarter, rising 0.7 percent off the back of a subdued result in the March 2019 quarter.” More>>

ALSO:

Pickers: Letter To Immigration Minister From Early Harvesting Growers

A group of horticultural growers are frustrated by many months of inaction by the Minister who has failed to announce additional immigrant workers from overseas will be allowed into New Zealand to assist with harvesting early stage crops such as asparagus and strawberries. More>>

ALSO:

Non-Giant Fossil Disoveries: Scientists Discover One Of World’s Oldest Bird Species

At 62 million-years-old, the newly-discovered Protodontopteryx ruthae, is one of the oldest named bird species in the world. It lived in New Zealand soon after the dinosaurs died out. More>>

Rural Employers Keen, Migrants Iffy: Employment Visa Changes Announced

“We are committed to ensuring that businesses are able to get the workers they need to fill critical skills shortages, while encouraging employers and regions to work together on long term workforce planning including supporting New Zealanders with the training they need to fill the gaps,” says Iain Lees-Galloway. More>>

ALSO:

Marsden Pipeline Rupture: Report Calls For Supply Improvements, Backs Digger Blame

The report makes several recommendations on how the sector can better prevent, prepare for, respond to, and recover from an incident. In particular, we consider it essential that government and industry work together to put in place and regularly practise sector-wide response plans, to improve the response to any future incident… More>>

ALSO: