The U.S. Dairy Exporter Blog: Market Analysis, Research & News
  • USDEC's Mid-Year 2021 Global Dairy Business Review

    By Mark O'Keefe June 30, 2021

    See the significant mergers, acquisitions, joint ventures, new facilities, executive hires and marketing initiatives for the first six months of this year.

    Despite challenging port and shipping issues, U.S. dairy exports got off to a soilid start in 2021. Through the first four months, U.S. export volume was up 15% over the same period in 2020. 


    Across the international dairy sector, business activity remained brisk, as one can see from the U.S. Dairy Export Council's 2021 Mid-Year Global Dairy Business Review. 

    USDEC closely monitors media coverage of global dairy business for our members and summarizes what they need to know in our weekly, members-only newsletter, Global Dairy eBrief. From those newsletters, we cherry-picked what's most relevant to share with you here.

    We started with items from the January 8 Global Dairy eBrief and ended with news from the June 25 edition. This is a thorough, fast-paced, review. We put company names in bold for easy scanning.

    What follows is a one-of-a-kind, curated, aggregated and highlighted archival summary of global dairy business developments for the first half of 2021, presented in month-by-month chronological order.

    Put another way, we present to you the global dairy business news that was.

    Look for the full-year 2021 Global Dairy Business Review in January.  

    January-3

    A2 Milk purchased a 75% stake in New Zealand dairy processor Mataura Valley Milk. Mataura manufactures milk powder products at a plant northeast of Invercargill on the South Island. A2 plans to spend A$112 million (about US$86 million) over the next two-three years to add blending and canning capabilities to the plant. The deal not only expands A2’s manufacturing capacity, but it also strengthens relationships in its key target market of China. China Animal Husbandry Group (CAHG) controls the remaining 25% of Mataura. CAHG is owned by China National Agriculture Development Group, the parent company of A2’s strategic partner in China: China State Farm Holdings Shanghai, a logistics and distribution company. A2 expects CAHG will also help the company with regulatory and market access issues in China. (Sydney Morning Herald, 12/24/20; BusinessDesk, 12/24/20)

    Prior to the New Year, France’s Lactalis purchased Agropur’s Canadian yogurt business Ultima Foods. The deal includes production plants in Granby, Quebec, and Delta, British Columbia. (FoodBev.com, 12/18/20)

    Uruguayan dairy exporter Conaprole is spending more than $10 million on a new headquarters in Montevideo. It expects to finish the project in 2023 . . . Fonterra global foodservice chief Grant Watson will take over as CEO of New Zealand milk processor Miraka in February. He replaces Richard Wyeth who announced his intention to resign in October . . . Lab-grown milk start-up TurtleTree Labs, headquartered in Singapore, secured $6.2 million in funding to accelerate the development of cell-based milk solutions. (Milkpoint, 12/23/20; Stuff.co.nz, 12/21/20; FoodBev.com, 12/18/20)

    Arla Foods is accelerating its e-commerce growth strategy by 3-5 years, increasing investments in its online presence and hiring more e-commerce expertise in sales and marketing across Europe. Its goal is to double European e-commerce sales to €600 million (about US$730 million) by 2025. (Company reports)

    Italian cheesemakers Agriform and Parmareggio (part of the Bonterre Group) completed their merger announced in late 2020. Combined revenues for the new entity are about €580 million (about US$707 million), about 30% from export markets . . . UK cheese exporter Somerdale International acquired the blended cheese business of Abergavenny Fine Foods (AFF). Somerdale said the acquisition (which includes the transfer of AFF’s blended cheese processing assets, brands and trademarks) and will allow the company to grow and develop its portfolio of blended cheeses, particularly for international markets . . . FrieslandCampina is exploring the sale of its 50% stake in Thai yogurt maker Betagen for as much as $500 million. Its joint venture partner, the Attasakulchi family which founded the company in 1991, has the right of first refusal. FrieslandCampina acquired its interest in 2007 . . . Norway’s Orkla Care Health and Nutrition Group purchased Norwegian sports nutrition brand Proteinfabrikken. (Company reports; Indo-Italian Chamber of Commerce and Industry; just-food.com, 1/12/21; FoodBev.com, 1/12/21; Bloomberg, 1/5/21)

    Kerry Co-operative Creameries is reportedly set to buy a 60% stake in Kerry Group’s primary dairy business. The business is valued at €800 million (about US$969 million). (Irish Independent, 1/19/21)

    Welsh dairy processor South Caernarfon Creameries is spending £14.4 million (about US$20 million) over the next three years to increase cheese capacity at its Chwilog plant from 15,000 tons to 23,000 tons per year . . . Saudi Arabian dairy giant National Agricultural Development Co. (NADEC) is restructuring to reduce costs. It expects the process will yield savings of more than $30 million . . Saputo Dairy Australia officially changed its Coon Cheese brand to Cheer Cheese due to the original name’s racist connotations. “Treating people with respect and without discrimination is one of our basic principles, and it is imperative that we continue to uphold this in everything we do,” Chairman and CEO Lino A. Saputo said. (USDEC Middle East/North Africa office; FarmingUK, 1/13/21; ABC News, 1/14/21)

    PepsiCo entered into a new partnership with plant-based food firm Beyond Meat. The two will collaborate on snacks and drinks made from plant-based proteins . . . Tropicale Foods acquired fellow U.S. frozen dessert maker Paleteria La Michoacana, including the company’s Modesto, Calif., manufacturing plant. Tropicale is owned by investment firm Wind Point Partners. (AP, 1/26/21; FoodBev.com, 1/25/21)

    February -1

    Malaysian conglomerate Johore Tin Bhd (JTB) is rebranding and investing in its Able Farms dairy operations with an eye toward building a bigger international presence. The company manufactures milk powder and condensed and evaporated milk, as well as tin cans and packaging materials. JTB recently took a 43% stake in a dairy facility in Lagos de Moreno, Mexico, with Mexican wholesaler/distributor Calkins Burke & Zannie de México and other investors. The facility can produce 120,000 MT per year of condensed milk products. The company expects to form additional joint ventures to expand its global footprint. (USDEC Southeast Asia office; BIMB Securities Research)

    Ireland’s Kerry Group acquired China’s Jining Nature Group, a maker of savory flavors, seasoning and prepared foods. (Food Business News, 2/4/21)

    Fonterra Brands Indonesia introduced a new natural cheese line under the Mainland brand. The line comes in three varieties: Mild, “Tasty” (aged 18 months) and “Vintage” (aged two years). The 250g packs will retail for about US$5.25 each . . . British cheesemaker Wyke Farms completed a new “export center of excellence” in Wincanton, UK. The facility expands the company’s cut-and-wrap and cheddar aging capacity, as well as its ability to consolidate container orders. Wyke Farms says it will allow the company to serve more global markets and support increased demand in a post-Brexit world . . . Mondelez International is spending £15 million (about US$21 million) to increase chocolate capacity at its Bournville, UK, manufacturing plant. (USDEC Southeast Asia office; FoodBev.com, 2/8/21; 2/5/21)

    Arla Foods plans to invest €700 million (about US$850 million) this year on plant expansions/upgrades, calcium initiative and its sustainability agenda. Major projects include the completion of a powder tower in Pronsfeld, Germany, a mozzarella expansion in Branderup, Denmark, and upgrades to its production site in Bahrain. “2021 will be another year of uncertainty and global disruption as the COVID-19 crisis stretches into the year and the first signs of recession are starting to show,” said CEO Peter Tuborgh. “But it is also a year where we hopefully will see the world open up again as vaccines are rolled out, so I am cautiously optimistic for 2021.” (Company reports)

    Ireland’s Kerry Group is buying Spain’s Biosearch Life, a manufacturer of ingredients for nutraceutical and functional foods. Grupo Lactalis Iberia owns a 29.5% stake in Biosearch Life and is selling its entire stake as part of the deal. Kerry also said it is undertaking a strategic review of its dairy business in Britain and Ireland. Kerry Co-operative Creameries was rumored last month to be a leading candidate to purchase the operations and is still considered a frontrunner should Kerry Group opt to sell. But the manufacturer said it was “evaluating several options.” In addition, the Group has decided to consolidate part of its business in Mexico and Malaysia and instead build a services division that can scale in size to deliver “more efficient and consistent service globally.” (Reuters, 2/16/21: Agriland, 2/16/21)

    Beston Global Food secured A$15.6 million (about US$12 million) to fund stage two of its Jervois, South Australia, lactoferrin plant expansion project. The project, when completed, will produce 20 MT of lactoferrin per year. The facility also produces mozzarella. (The Market Herald, 2/7/21)

    Vietnamese dairy giant Vinamilk formed two new ventures this month. Vibev, a partnership with Vietnamese food manufacturer Kido Group, will make and market ice cream and noncarbonated drinks for domestic and export markets starting in March. Vinamilk holds a 51% stake, Kido owns 49%. A second joint venture with an unnamed Philippine company will import and distribute Vinamilk dairy products in the Philippine market. Each party contributed about $6 million to the 50/50 venture. Vinamilk also operates wholly-owned subsidiaries in Cambodia, Poland and the United States. (Vietnam Investment Review, 2/21/21; Hanoi Times, 2/8/21)

    Danone continue to expand its investment in plant-based foods and beverages, including dairy alternatives. Last week, the company acquired Earth Island, owner of plant-based food manufacturer Follow Your Heart. Follow Your Heart makes plant-based cheese alternatives, spreads and “eggs.” Danone is investing €12 million (about US$15 million) in a new plant-based production line at its Parets del Valles factory near Barcelona, Spain. The line will produce coconut and oat-based items, including yogurt alternatives for local and international markets. The facility will become Danone’s first hybrid facility, pricing dairy and plant-based products side by side. Danone reported a 3.4% increase in sales at its dairy and plant-based division in its 2020 annual report. (FoodBev.com, 2/25/21; Food Dive, 2/19/21)

    Shakey’s Pizza Asia Ventures plans to open 15 new Shakey’s outlets and 15 Peri-Peri Charcoal Chicken units in the Philippines this year. The expansion was planned for 2020 but put on hold due to the pandemic . . . Arla Foods plans to return €264 million (about US$320 million) to its farmer owners due to the cooperative’s strong financial position . . . Great Lakes Cheese is considering building a new $505-million manufacturing plant in the towns of Amity and Angelica, N.Y., and moving production out of Cuba, N.Y. The Allegheny County Industrial Development Agency is considering financial support for the project . . . Hispanic cheese and food manufacturer Cacique Foods is seeking financial incentives from the city of Amarillo, Texas, to build a new $88 million manufacturing plant. (USDEC Southeast Asia office; Company reports; The Wellsville Daily Reporter, 2/22/21, KFDA, 2/19/21)

    March-Jun-23-2021-02-36-54-76-PM

    Danone announced leadership changes in response to pressure from activist investors who have criticized the company’s performance compared to rivals, as well as a plan to sell its stake in China’s Mengniu Dairy. Current chairman and CEO Emmanuel Faber said he would relinquish his CEO responsibilities once the organization identifies a replacement. The process to recruit a new leader has already begun, the company said. Faber will remain chairman. The board of directors made additional changes, including creating a new independent director to provide management oversight in another nod to shareholder complaints. However, it backed Faber’s turnaround plan (including asset sales, job cuts and a reorganization) announced in October, even though the same group of investors opposed it. One of the assets Danone is selling is its stake in Mengniu, which has a book value of $850 million. Because that stake is held indirectly through its investment in state-owned COFCO Corp. (one of Mengniu’s largest shareholders), Danone must first convert the investment into a direct holding, which it could then sell outright. Danone stated that despite the planned sale, “China remains highly strategic” for the company and it is committed to the market. (Company reports; Financial Times, 3/2/21, 3/1/21; Bloomberg, 2/28/21)

    Britain’s First Milk is investing £9 million (about US$12.5 million) in its Lake District Creamery and £3.5 million (about US$5 million) in its Haverfordwest Creamery. The bigger Lake District project includes the installation of new high-capacity cheese block formers and new whey, milk and cream handling processes. The Haverfordwest project includes a “significant upgrade” to whey processing. The projects are part of a three year, £30-million series of upgrades that will ultimately lift capacity at both plants by 20%. The company is making the investments “to meet the growing demand from our customers around the world.” (Company reports)

    Independent UK milk processors Freshways (Nijjar Dairies Ltd.) and Medina Dairy said they are discussing a merger to build scale and improve competitiveness in the British fluid milk sector. (Farmers Weekly, 2/24/21)

    Reckitt Benckiser put its Chinese infant formula business under strategic review after disappointing results, impacted by falling birth rates, growing local competition, closure of the Hong Kong border and pandemic-related sales and marketing challenges . . . Singaporean food and agri-business firm Olam International hopes to list its Olam Food Ingredients (which will include its dairy operations) by the first half of 2022. The IPO is part of a strategy announced last year to divide its portfolio into two operating units—ingredients and Olam Global Agri—to better respond to market trends . . . Saputo Dairy UK received a £3.2-million grant (about US$4.5-million) from a British government economic growth program to support a project to expand cheese and ingredient processing expansion (including demineralized whey) at its Davidstow manufacturing plant. (USDEC Southeast Asia office; Company reports; Cornish & Devon Post, 3/1/21; Bloomberg, 2/25/21, 2/24/21)

    Maeil Dairies Australia, a subsidiary of South Korea’s Maeil Dairies, paid A$13.5 million (about US$10 million) for the partially built Corio Bay Dairy Group milk powder processing facility in Geelong, Victoria. It is Maeil’s first investment in dairy manufacturing outside of Korea. Work on the facility—a joint venture between Wattle Health and Organic Dairy Farmers of Australia—halted in 2020 after COVID-19 helped push Organic Dairy Farmers into receivership. Tony McKenna, CEO of the joint venture, was named CEO of Maeil Dairies Australia. Maeil expects to pour another A$18 million (about US$14 million) into the plant to complete it. The company plans to use Geelong as a base to expand domestic Australian business and launch into new markets in Asia. (Mirage News, 3/4/21; Food and Drink Business, 1/20/21)

    French paper Les Echos reported that General Mills sold its stake in the European arm of its Yoplait business to French co-shareholder Sodiaal. The company reportedly began mulling a sale last October. The deal does not affect the Yoplait business in North America. (just-food.com, 3/8/21)

    New Zealand’s Fonterra merged its two Chilean businesses—Soprole and Prolesur—into a single company under the Soprole name. The move is part of Fonterra’s plan to streamline operations in Chile . . . Arla Foods proposed closing its Trevarrian Creamery cheese plant in Cornwall, UK. The plant contract manufactures a range of cheeses, including brie and camembert, for retailers and local brands. The company said it is making the move due to declines in the contract manufacturing business in the region . . . Sweden’s Oatley plans to build a new factory on Peterborough, UK, to produce 300 million liters per year of oat-based milk alternatives, with capacity to expand to 450 million liters. (Yahoo Finance, 3/9/21; DairyReporter.com, 3/9/21)

    Glanbia Ireland approved a policy aimed at limiting excessive growth by its suppliers during the spring flush—April, May and June. Farmers who exceed previous production peaks by more than 5% during those months will be paid 30% less for all excess milk. Glanbia is basing the 5% increase on each farm’s peak production volume in April, May and June in either 2018, 2019 or 2020, whichever is highest. Glanbia suppliers loudly criticized the plan, saying it’s a first step toward supply management. The company said the policy is “temporary,” and aimed at trying to manage peak season milk production growth. Glanbia said it will use any money saved through the scheme to incentivize milk production on the shoulders of the flush. (Agriland, 3/16/21; Irish Independent, 3/15/21)

    Fonterra Co-operative Group provided a divestment update in its half-year results announcement this week. The company and its joint venture partner plan to sell their farms in China, a move that aligns with Fonterra’s focus on New Zealand milk. The company also reduced its shareholding Beingmate from almost 4% to just short of 3% and expects to reduce its holdings to zero by the end of the financial year. (Company reports)

    FrieslandCampina and Egyptian cheese manufacturer Arabian Food Industries (Domty) formed a joint venture to focus on supplying cheese to Africa and the Middle East. FrieslandCampina said that it expects the joint venture “will bring exciting innovations that will create new cheese propositions that are more healthy, affordable and accessible” to consumers across both regions. (Company reports)

    Japan’s Meiji is establishing a new unit in Vietnam to import and sell infant formula and capitalize on the country’s higher birth rate. About 1.5 million more babies are born every year in Vietnam vs. Japan. Meiji Food Vietnam will launch April 1. The company has no immediate plans to set up manufacturing in Vietnam. (Nikkei Asian Review, 3/13/21)

    Frisian Flag, a subsidiary of Dutch dairy giant FrieslandCampina, broke ground on a new $265-million manufacturing plant in the Cikarang industrial district of West Java. The facility, originally announced last year, will produce packaged fluid milk, condensed milk and creamers. The company expects to sell about 90% of production in export markets and 10% domestically. It plans to start commercial operations in 2023. (USDEC Southeast Asia office; Jakarta Post, 3/15/21)

    According to a plan announced earlier this month, Danone Chairman and CEO Emmanuel Faber was supposed to remain chairman but give up his CEO title once the company found a new chief executive. Instead, he stepped down from both positions this week under pressure from activist investors who were not satisfied with the earlier plan. Gilles Schnepp took over as nonexecutive chairman; two senior Danone executives—Shane Grant and Véronique Penchienati-Bosetta—will lead the company while it searches for a new CEO. (Wall Street Journal, 3/15/21)

    Lactalis is negotiating with fellow French cheesemaker Bel Group to buy numerous Bel businesses, including Royal Bel Leerdammer NL (including the Leerdammer brand), Bel Italia, Bel Deutschland, and Bel Shostka Ukraine, in exchange for Lactalis’s 23% stake in Bel (Lactalis would maintain a 1% share after the acquisitions). The sale aligns with Bel’s strategy to expand beyond cheese and grow its presence in the healthy snack sector. The company said that the additional funds from the deal would allow it to ramp up diversification efforts in high-growth markets like Asia/Pacific and North America. The deal would raise Lactalis’s presence in the Netherlands, Italy, Germany and Ukraine. Separately, and also in line with its diversification strategy, Bel launched its first 100% plant-based cheese alternative line under the Nurishh banner. The line—which offers alternatives to cheddar, mozzarella and provolone in slices and shreds—will debut in the U.S. with a global rollout to follow. (Company reports; Food Dive, 3/23/21; FoodBev.com, 3/19/21)

    New Zealand’s Westland Milk Products is spending NZ$40 million (about US$28 million) to double butter capacity at its Hokitika, South Island, manufacturing plant. The project will focus on its Westgold brand of grass-fed, consumer butter as part of the company’s strategy to move away from commodity packaged products. When completed, the facility will manufacture 42,000 MT of butter per year. (Company reports)

    General Mills confirmed reports that it was selling its 51% stake in Yoplait’s European operations to France’s Sodiaal. What had not been reported earlier was the asking price: General Mills, in return, will acquire Sodiaal’s 48% stake in the Canadian Yoplait business. Yoplait Canada will become a wholly owned subsidiary of General Mills . . . Reckitt Benckiser Group is considering selling its Mead Johnson infant formula business in China . . . Singapore’s Olam International sold its 15% stake in New Zealand’s Open Country Dairy. The buyer or buyers were not named . . . Saudi dairy and food giant Almarai purchased Bakemart Bahrain and Bakemart UAE (including two UAE production facilities) in a deal worth $26 million. Bakemart produces baked goods for the foodservice and retail sectors in the Middle East . . . Mondelez International purchased a “significant majority interest” in UK sports nutrition brand Grenade(USDEC Middle East/North Africa office; FoodBev.com, 3/23/21; BusinessDesk, 3/23/21; Food Dive, 3/22/21; Reuters, 3/22/21)

     April-3

    Glanbia Ireland modified a policy announced last month aimed at limiting peak milk production volumes from its suppliers. Under the revised policy, rather than reducing payments for farmers who exceed prescribed production gains, the company is now offering to pay for milk not produced. And rather than penalize all farms who exceed established production levels, the company will allow small producers to increase output by 10% each year for the duration of the policy.Even though Glanbia said a number of suppliers are willing to commit to scaling back, Irish farmer organizations continue to criticize the plan and some farmers are reportedly seeking to become dual suppliers with other dairies to circumvent the peak milk controls. (Irish Independent, 4/6/21; Agriland, 3/30/21)

    Fonterra completed the sale of its two wholly owned China farming hubs to Inner Mongolia Youran Dairy for NZ$552 million (about US$388 million). Fonterra said it will continue to grow its markets for New Zealand milk in China “through new products, applications and close partnerships with our customers” . . . German dairy processor The Meggle Group purchased Bavarian cheesemaker Stegmann Emmentaler Käsereien from French dairy co-op Sodiaal. Stegmann operates plants in Kempten and Altusried, Germany. Its sales are about €120 million (about US$143 million) . . . UK-based Nomad Foods purchased Fortenova Group’s Frozen Food Business Group (FFBG). About half of FFBG’s revenues (or about $165 million) come from ice cream, a new category for Nomad. (Company reports; DairyReporter.com, 4/6/21, 3/30/21)

    The on-again, off-again talks between Ireland's Kerry Group and Kerry Co-operative for the co-op to acquire the group’s dairy business are off again—at least for now. A week earlier, the two parties were rumored to have tabled a proposal that would see the co-op acquire Kerry Group’s dairy business in three to five years. The proposal, “Project Seafield,” would have seen the creation of a new joint venture to house Kerry Group’s dairy business, including five manufacturing plants, a feed mill, 29 agricultural supply stores and a roster of brand names (although the Kerry name would NOT move with the business). Products manufactured by the joint venture would have been sold exclusively to Kerry Group for five years. The new entity would have been barred from competing with Kerry Group for a further two years after the initial five-year period. Kerry Group suspended the plan, noting it would continue its strategic review of the dairy business. (Agriland, 4/15/21, 4/8/21)

    Ireland’s Dairygold Co-operative Society said it has up to €100 million (about US$119 million) to spend on acquisitions to kick-start its new health and nutrition division established in 2020. The co-op is not yet talking with any candidates, but said it would be looking at already developed businesses. Dairygold formed the division with an eye toward entering higher-value sectors such as fortified milk powders and nutritional products. CEO Jim Wolfe pointed to “dairy deficit areas in Asian markets” as a target. Wolfe also announced he would be retiring at the end of this year after 42 years at Dairygold, including the last 12 as leader. (Irish Times, 4/8/21, 4/7/21; Head Topics, 4/7/21)

    Lactalis do Brasil signed a partnership agreement with Brazilian cooperative Cativa. Under the terms of the deal, Lactalis will take over two Cativa manufacturing plants and a collection center, and Cativa will supply milk exclusively to Lactalis for a 10-year period, with an option to extend the deal for another 10 years . . . German cheese-based appetizer maker Frostkone Food Group purchased UK appetizer/finger food manufacturer Abergavenny Fine Foods. Frostkone said it hopes the purchase will help expand its exports and international presence. (Company reports; FoodBev.com, 4/6/21)

    Shake Shack says it has “big plans for Asia,” with new outlets planned this year for Shenzhen, Macao, Guangzhou, Singapore and Beijing. It already runs 48 Asian locations, and said its business “has been incredibly resilient in Asia,” even through the pandemic. The company plans to open 35-40 new units globally this year and 40-50 in 2022 . . . Leon Clement, CEO of New Zealand dairy processor Synlait Milk, abruptly resigned effective April 30. Synlait saw a sharp drop in profits due to reduced sales by its main customer A2 Milk (which is facing pandemic-related business difficulties). Former CEO John Penno will take over as interim CEO on May 1 as Synlait searches for a new leader . . . India’s Parag Milk Foods plans to raise $42 million to meet capital investment needs and improve cash flow . . . Canada’s Agropur is closing a fluid milk plant in Winnipeg, Manitoba, in late September to optimize its consumer milk operations. (CNBC, 4/15/21; DairyReporter.com, 4/15/21; BusinessDesk, 4/12/21; Press Trust of India, 4/5/21)

    An Irish High Court ruled that Glanbia can proceed with its €140-million (about US$169-million) cheese plant in Belview, Co. Kilkenny, Ireland. Construction on the plant—a joint venture with Dutch dairy processor Royal A-Ware—had been put on hold over a legal challenge centered on the facility’s environmental impact. While the court ruled in Glanbia’s favor, An Taisce, the group who brought the lawsuit, said it was considering a further legal challenge. The facility will produce 50,000 MT per year of gouda cheese for export. The construction delay was a major reason why Glanbia announced a plan to reduce peak milk production to the dismay of many of its suppliers. Glanbia has not commented on whether it will proceed with that peak milk plan after the High Court’s ruling. (That’s Farming, 4/21/21; Agriland, 4/20/21)

    New Zealand’s Fonterra Co-operative Group is building a fifth application center in China and upgrading three of its four existing locations. The upgraded center in Guangzhou reopened last week; units in Beijing and Shanghai are next up for facelifts. The new location will be in Wuhan. Fonterra says the Guangzhou center holds more than 220 application demonstration seminars per year for the Chinese bakery, foodservice and beverage sectors. (USDEC China office)

    China’s Junlebao expects to complete its $90-million fluid milk plant in Hebei Province later this year. The facility will produce up to 260,000 MT of milk products (including UHT milk) per year . . . Saputo Inc. named Leanne Cutts president and COO (International and Europe) effective in the second half of calendar year 2021. Cutts currently serves as global chief marketing officer at “one of the world’s largest banks,” Saputo said . . . Ireland’s Kerry Group plans to invest €30 million (about US$36 million) in a new “taste” facility in Karawang, Indonesia. The facility will include a flavor manufacturing site, a sampling hub and an R&D pilot plant. (USDEC China office; Company reports)

    Egyptian cheese and bakery products company Arabian Food Industries (better known as Domty) is getting into the fluid business. The company is adding a $2-million Tetra Pak line to produce regular UHT milk, but plans on expanding to flavored milk, heavy cream and other products, with a target to launch one new item a month. The project stems from a pivot made during the pandemic to shift focus from on-the-go snacks (and successful products like its portable cheese sandwich) to products consumed at home. The company said it expects to revive investments in on-the-go products as COVID-19 comes under control. (USDEC Middle East/North Africa office)

    Major New Zealand milk producer Van Leeuwen Dairy Group (VLG) entered receivership. VLG has been struggling since it was identified as the source of New Zealand’s Mycoplasma bovis outbreak in 2017. A long battle for compensation with New Zealand’s Ministry of Primary industries followed. In 2020, it refinanced its operations and tried to sell nine of its 13 dairy farms. Media reports state that the business currently milks about 10,000 cows. (Otago Daily Times, 4/24/21)

    May-4

    Hilmar Cheese is building a $460-million cheese and whey manufacturing plant in Dodge City, Kan. The company expects to break ground this summer, with the plant becoming fully operational in 2024. The new facility, which the company says will “showcase sustainable solutions,” will help Hilmar meet growing demand for cheese and whey products worldwide. (Company reports)

    U.S.-based investment firm KKR invested in direct-to-consumer Chinese dairy company Adopt A Cow. Using a vertically integrated production model and ecommerce sales platform, Adopt A Cow has built a business of 10 million consumers over the last five years selling fluid milk, yogurt, cheese sticks and milk powder. With KKR’s investment, the company plans to build additional farms and manufacturing facilities . . . New Zealand’s Rural Land Co. is paying $114 million for 14 dairy farms owned by Van Leeuwen Group. Van Leeuwen entered receivership last month. The properties cover more than 15,500 acres and around 10,000 cows. Rural Land will lease the assets to three Kiwi farming groups. (Company reports; Stuff.co.nz, 4/30/21)

    Malaysia’s Dutch Lady Milk Industries says it plans to build a new manufacturing plant in the state of Negeri Sembilan to replace its existing facility. The company, which counts Dutch dairy giant FrieslandCampina as majority shareholder, announced similar plans last year then cancelled them . . . CEC Entertainment, owner of Chuck E. Cheese, plans to open 50 new outlets across the Middle East over the next five to seven years, half of them in Saudi Arabia . . . South Korean food and confectionery firm SPC Group is expanding in Malaysia, with plans to launch its popular Korean bakery chain Paris Baguette and build a new manufacturing facility. (USDEC Middle East/North Africa office; USDEC Southeast Asia office)

    Irish environmental watchdog An Taisce is appealing the High Court decision allowing Glanbia Ireland to proceed with construction on a major new cheese plant in Belview, County Kilkenny. An Taisce’s original court challenge, which cited increased carbon emissions from the plant and negative impact on water quality, has already delayed estimated completion of the project from 2022 to 2024. The appeal could postpone the project even further, Glanbia said. (Agriland, 5/10/21; Irish Times, 5/9/21)

    French dairy, fruit and plant-based food manufacturer Bel Group is splitting the CEO and chairman position into separate functions, setting the stage for executive vice president Cécile Béliot to take over as CEO. Current Chairman and CEO Antoine Fiévet will remain chairman. The move sets the stage for closer integration between Bel’s dairy operations and those of MOM Group, the fruit-based food manufacturer in which Bel holds an 83% share. Bel expects the changeover to advance international growth in what it calls “its three complementary product families.” (Company reports)

    Danone is selling its 10% stake in China’s Mengniu Dairy in a deal that could be worth up to $2 billion . . . Investment firms and Chinese dairy companies are lining up to acquire Reckitt Benckiser’s Chinese infant nutrition business. The business recently posted disappointing results, impacted by falling Chinese birth rates, growing local competition, closure of the Hong Kong border and pandemic-related sales and marketing challenges. So far, media reports say Bain CapitalCarlyle GroupKKRSequoia China, China’s Yili Group and China’s New Hope Dairy have all submitted bids . . . Irish dairy processor Carbery Group purchased U.S.-based flavor and ingredient supplier Innova Flavors. Innova will join Carbery’s U.S. Synergy ingredients division. (Reuters, 5/12/21; Bloomberg, 5/10/21; Irish Times, 5/7/21)

    Saputo is spending $30 million to expand capacity at its Las Cruces, N.M., manufacturing site . . . Dutch dairy giant FrieslandCampina is spending €14 million (about US$17 million) to expand production capacity for dairy desserts and fermented milk products at its Mátészalka, Hungary, plant . . . CKE Restaurants, parent of Carl’s Jr. and Hardee’s, plans to double the number of international units to 2,000 over the next five years. About half those new stores are expected for Mexico and the Middle East, but the company noted there is “huge white space” in China and Africa . . . Malaysia’s Johor Corp. is seeking investors to develop Jemaluang Dairy Valley, a project to produce fresh dairy products for the domestic market . . . Great Lakes Cheese broke ground on a new $185-million cheese packaging plant in Abilene, Texas. (USDEC Southeast Asia office; Las Cruces Bulletin, 5/13/21; FoodBev.com, 5/13/21; Forbes, 5/10/21; Melkveebedrijf, 5/10/21)

    Nestlé broke ground on a new $220-million beverage facility in Batang, Central Java, Indonesia. The plant will produce Bear Brand liquid milk and Milo and Nescafé ready-to-drink beverages to meet rising consumer demand in Southeast Asia. Nestlé also says the facility will support development of the dairy sector in the region. Commercial production is slated to begin in 2023. (Company reports)

    Fonterra is shutting down its Darnum, Victoria, manufacturing site for five weeks as it undergoes a multi-million “maintenance” makeover. The facility manufactures nutritional infant powders, 75% of which are sold overseas. It takes in about 280,000 MT of raw milk annually. While the plant is closed, all milk will go to Fonterra’s Stanhope, Victoria, cheese plant. (Farm Online, 5/19/21)

    Italian dairy group Granarolo acquired the 49% stake in British distributor Granarolo UK that it didn't already own. The company said it hopes the deal will strengthen its footprint in Britain and that it plans to acquire additional companies in Italy, Europe and overseas. (FoodBev.com, 5/17/21)

    Danone named Antoine de Saint-Affrique, head of chocolate maker Barry Callebaut and former leader of Unilever’s foods division, as its new CEO effective Sept. 15, 2021 . . . Kerry Group plans to build a food technology and innovation center in Queensland, Australia. The facility will include pilot plants, labs and tasting facilities. Kerry says it will leverage its “R&D network around the world, as well as global insights, market knowledge, and culinary and applications expertise to customize solutions that ultimately deliver exciting products that resonate with the local market.” (Company reports)

    Dutch dairy giant FrieslandCampina sold its Russian subsidiary Campina LLC to German dairy processor Ehrmann and its Nutrifeed animal nutrition business to Dutch feed manufacturer Denkavit. Under the terms of the feed deal, FrieslandCampina will supply Denkavit with dairy inputs. The Ehrmann deal includes the Campina manufacturing plant in Stupino, Moscow Oblast, as well as yogurt brands Fruttis and Nezhny. Ehrmann already operates a yogurt plant near Moscow. FrieslandCampina’s previously announced its intention to review its position in various markets and refocus on the best growth opportunities. (Company reports; Food Ingredients 1st, 5/25/21)

    Canada’s Saputo purchased Wisconsin Specialty Protein’s Reedsburg, Wis., manufacturing plant. The plant, which makes value-added ingredients including organic lactose, goat whey and other dairy powders, will enable Saputo to broaden and increase the value of its ingredients portfolio for the United States and internationally, the company said. Saputo also purchased UK-based Bute Island Foods, a producer of cheese alternatives for retail and foodservice markets. “Our commitment remains to expand our footprint in the dairy alternatives space to meet the changing demands of our customers and consumers,” said Lino A. Saputo, chair and CEO. (Company reports)

    Qatar’s vertically integrated dairy firm Baladna is building a new processing facility to manufacture evaporated milk, sterilized cream and other long shelf-life products. The facility, set for completion in spring 2022, is part of a broader plan to expand export markets in Africa and Southeast Asia. In addition, the company is exploring transferring the milk production and processing strategy it followed in Qatar to other nations, starting with Malaysia. It began farm and plant site surveys in Malaysia this month. (USDEC Southeast Asia office; FoodNavigator-Asia.com, 5/19/21)

    China Youran Dairy Group is planning an initial public offering aimed at raising $800 million. Youran purchased Fonterra Co-operative Group’s dairy farm hubs in China’s Hebei and Shanxi provinces last year. It says it will use the cash raised to expand its breeding herd and ramp up feed and raw milk production. Chinese milk production grew 7.5% in 2020, according to the country’s National Bureau of Statistics. But Chinese cows produce about 80% as much milk as cattle in other countries with modern dairy industries, notes USDA’s latest Dairy And Products Semi-annual on China. That is due to genetics, feeding and disease issues. Chinese dairy processor Yili Industrial Group holds a 40% stake in Youran. (USDA; Reuters, 5/18/21)

    Japan’s Morinaga Milk Industry acquired Vietnamese beverage and yogurt maker Elovi Vietnam JSC. The deal is part of Morinaga’s plan to increase its global presence. (Company reports)

    Saudi Arabian dairy processor SADAFCO expects to start trial production at its new ice cream plant by July . . . Contract foodservice company Compass Group said that it intends to convert 40% of its portfolio to plant-based meals. (USDEC Middle East/North Africa office; Company reports)

    June-4Arla Foods is investing more than $8 million to expand its Troldhede Dairy facility in West Jutland, Denmark, to meet rising demand for the company’s cheese in Japan. The plant makes a number of cheeses, including Castello brie and camembert. The project will allow Arla to implement a new production method for its cheeses that the company claims will yield fresher, softer cheeses after arrival in Japan. Arla expects the changes will increase Troldhede cheese sales to Japan by 800 MT per year to 2,000 MT total. The company expects to complete the expansion by mid-2023. (FoodBev.com, 5/28/21)

    New product trends in target U.S. dairy export markets—and from U.S. and competitor dairy ingredient suppliers—offer insights into consumer demand trends for U.S. suppliers. Here are some of more notable rollouts from the past few months.

    • Arla Food Ingredients developed the first prototype recipes for a joint project with the Global Alliance for Improved Nutrition (GAIN) that aims to take processed papaya leftovers and create an affordable, nutritious snack for low-income consumers in Ethiopia. The initial product is a protein bar made with papaya pulp and milk and whey-based ingredients. Three other Ethiopian food and ag companies are involved in the project, which runs through 2024. Arla’s next step is to adapt the recipe to local consumer preferences.
    • The Dairy Promotion Organization of Thailand released Chew-D, the first ambient yogurt drink with chewable pieces in Thailand. The line is passion-fruit flavored with small, chewy pearls made from the root of the konjac plant.
    • Danone introduced the first infant formula product manufactured at its factory in Qingdao, Shandong Province. The company is marketing Nutrilon Yunhui Stage 3 as deriving from milk from grass-fed cows. Danone called it a product of “milestone significance” and plans to increase research in China to produce more locally developed and manufactured products over the next five years.
    • China’s Feihe Dairy was granted a patent for a new manufacturing method for shelf-stable processed cheese. The product contains natural cheese, low-gluten wheat flour, starch and raising agents, which Feihe says lowers costs and reduces production times.
    • China’s Junlebao Dairy released a new upgraded version of its A2 infant formula billed as fostering brain development. The product contains milkfat globule membrane, DHA and a patented phosphate. Junlebao’s original A2 infant formula released last April posted sales of $23 million last year.
    • Separately, Junlebao unveiled its first new cheese product since investing in cheese manufacturer Shanghai School Cheese Food Technology in January. The company is marketing the product—a kids’ cheese-snack featuring DHA and arachidonic acid—as good for children’s health.
    • Kerry Group released a new children’s milk formula developed for the Chinese market. Glanseair Children’s Formula, for kids aged 4-12, is manufactured in Ireland and shipped to China for online and traditional sales. Kerry is marketing the product as made from milk from grass-fed cows and as having better sustainability credentials compared to other formulas.
    • Lactalis expanded its milk powder range with a new organic WMP for chocolate, dairy and baking applications.
    • Japan’s Meiji launched two new probiotic yogurt products in China, noting rising demand during the pandemic for food products considered “good for you.”
    • Synlait Milk launched premium SMP and WMP under the Made With Better Milk Media reports say the initial customer is a “prominent consumer brand owner in Asia.” The products are made from milk supplied by farmers in Synlait’s “Lead With Pride” farm assurance program, which it claims sets stringent standards for animal and human welfare and generates better outcomes for climate, water, soil and biodiversity.
    • Vinamilk launched a new UHT milk with “bird’s nest.” Bird’s nest is a traditional ingredient in China and parts of Asia with reputed medicinal and nutritive properties. Vinamilk bills the product as containing vitamins K2, A and D3 and selenium to bolster the immune system. The first export shipment of the new milk went to Singapore in March. (Company reports; USDEC China office; USDEC Southeast Asia office)

    Korean private equity firm Hahn & Co. agreed to pay $280 million to acquire a 53% stake in South Korean dairy processor Namyang Dairy Products. Namyang has faced multiple scandals in recent weeks resulting in the resignations of its managing director and its chairman . . . Australian investment group Prime Value Asset Management paid A$62.5 million (about US$48 million) for 11 Tasmanian dairy farms belonging to Van Dairy Group. Earlier this year, Van came under fire over effluent management issues. Prime said it planned to address the environmental issue. The deal includes 5,000 cows and yearlings. (Farm Online, 5/31/21; MarketLine Financial Deals Tracker, 5/31/21)

    A group of partners plans to take Mexican dairy processor Grupo Lala private, paying a 20% premium for outstanding shares . . . China’s Mengniu Dairy secured an HK$2.3-billion loan (about US$296 million) that it reportedly plans to use to expand organic milk production, add equipment to reduce water usage and invest in alternative energy systems . . . Ireland’s Kerry Group opened a new “taste” facility in Irapuato, Mexico. The facility, serving Mexico, the Caribbean, Central America and the Andean region, will help Kerry “co-create with customers” and develop products tailored to regional preferences, the company said. Mexico presents “a solid opportunity for growth and innovation,” said Marcelo Marques, president and CEO of Kerry Latin America. (USDEC Mexico office; USDEC China office; Company reports; Global Capital Euroweek, 5/31/21)

    Primavera Capital Group paid $2.2 billion for Reckitt Benckiser Group’s Infant Formula and Child Nutrition business in China. The deal includes manufacturing facilities in Nijmegen, Netherlands, and Guangzhou, China, and royalty-free and exclusive license to the Mead Johnson and Enfa brand families in China, including EnfamilEnfagrow and Enfinitas. Reckitt will continue to own the brands in the rest of the world and also maintains an 8% stake in the Chinese business. At a recent dairy event, an official from Yili Group reported that share of foreign made brands in China’s infant formula market had fallen to 46% (including both imports and cross-border ecommerce trade). Foreign-made share hasn't been that low since before the melamine scandal in 2008 that ushered in the foreign infant formula boom. Reckitt Benckiser booked a £2.5-billion loss (about US$3.5-billion) from disposal of the division, which had disappointed since the company acquired it in 2017. (USDEC China office; Company reports; FoodBev.com, 6/8/21; Evening Standard, 6/6/21)

    Abu Dhabi state investment fund ADQ is considering acquiring a stake in Egypt’s Juhayna Food Industries. The fund has been investing in the broader region since its founding in 2018, with a focus on Egypt. It agreed last year to invest $1 billion to support expansion of hypermarket chain LuLu Group in Egypt. (USDEC Middle East/North Africa office)

    FrieslandCampina plans to appeal a ruling by a Thai court that the company owes 2.2 billion baht (about US$70 million) to an unnamed former business client. The customer brought the court case claiming FrieslandCampina overcharged the company for a decade, from 2009-2019. FrieslandCampina operates an office in Bangkok and a plant in Samrong, where it manufactures the Foremost brand of condensed and UHT milks and yogurts for domestic sales and export markets . . . Hispanic food company Cacique broke ground on a new $88-million, 200,000-sq.-ft. processing facility in Amarillo, Texas, to manufacture Mexican-style cheeses, yogurt, crema and other dairy products. (Company reports; just-food.com, 6/8/21)

    European dairy processors Arla Foods and FrieslandCampina continue to invest in the Nigerian dairy sector in ways that build relationships with the local industry and a long-term vision to foster mutually beneficial dairy growth. Arla plans to build a state-of-the-art commercial dairy farm in Northern Nigeria where it will train and support up to 1,000 local dairy farmers with instruction on improving milk yields and quality, animal welfare and profitability. Milk produced by the farm will be processed at Arla’s nearby plant. Arla’s philosophy: Providing Nigeria’s growing population with nutritious foods requires a “complementary approach where imported food is crucial to ensure food security while also supporting the government’s long-term agricultural transformation plan to build a sustainable dairy sector in Nigeria,” said Arla Executive Vice President and head of Arla Foods International Simon Stevens. FrieslandCampina WAMCO Nigeria, an affiliate of the Dutch company, opened a new milk collection center in southwest Nigeria on the campus of Bowen University. The company, which operates a Dairy Development Program (DDP) in southwest and northern Nigeria, is also backing the building of a dairy farm for training purposes at the school. The DDP supports the training of local farmers with instruction on improving milk yields and quality, and feeding, breeding, farm management. (Company reports; FoodBusinessAfrica.com, 6/19/21)

    Arla Foods signed a deal with Northern Ireland-based Dale Farm wherein Dale Farm will supply the Denmark-based dairy giant with WPC for use in infant formula and consumer health products. Arla said the agreement will help the company meet increasing global demand for Arla Foods Ingredients specialty products. Dale Farm said the agreement was “an excellent opportunity to grow our presence in the global whey protein market.” Prior to the deal, Dale Farm mainly supplied WPC for sports nutrition products, so the focus on infant formula is a new sector for the company. (Company reports)

    Kansas Dairy Ingredients (KDI) is spending $45 million to expand its Hugoton, Kan., operations. The company, which specializes in concentrated milk products, is adding capacity to produce American-style, Italian-style, Hispanic-style and European-style cheeses as well as butter. It began construction on the expansion in December 2020 and expects to start receiving milk in October 2021. (Food Business News, 6/22/21)

    Kerry Group sold its chilled meats and convenience meals division to U.S. food company Pilgrim’s Pride for €819 million (about US$976 million). It plans to use the proceeds to fund acquisitions in the ingredients sector as the company refocuses operations on its higher-margin taste and nutrition divisions. Immediately after the sale, Kerry purchased preservation technology company Niacet. Kerry’s dairy operations, which it was close to selling to Kerry Co-op earlier this year, will not be sold “at this time,” the company said. Its consumer foods business will fully incorporate dairy-related activities for the time being. Analysts believe it is just a matter of time before Kerry offloads its dairy holdings as well. (Irish Times, 6/21/21, 6/19/21; Irish Examiner, 6/17/21; Farmers Journal, 6/18/21)

    Belgian dairy co-op Milcobel purchased Belgian mozzarella shredding specialist Kaasbrik. Milcobel said the deal would enable the company to strengthen its position as a global player in the international mozzarella sector. (DairyReporter.com, 6/21/21)

    Switzerland’s Emmi laid the foundation stone for a new CHF 50-million (about US$54-million) cheese plant at its Emmen site. The facility will replace the company’s 40-year-old cheese building, upgrading processing equipment and expanding capacity for its cheese brands including Lucerne cream cheese . . . Mexican dairy processor Alpura is spending nearly US$75 million on two projects in the state of Mexico: US$32 million on its La Torre Cuautitlán plant (which manufactures yogurt drinks and other dairy products) and $42 million on a new distribution center in Tepotzotlán . . . Brazilian dairy processor Betania opened a new R$50-million (about US$10-million) milk powder plant in the Brazilian state of Ceará. The facility can handle 200 MT of raw milk per day. (USDEC Mexico office; USDEC South America office; Company reports)


    Mark O'Keefe is vice president of editorial services at the U.S. Dairy Export Council.

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    The U.S. Dairy Export Council fosters collaborative industry partnerships with processors, trading companies and others to enhance global demand for U.S. dairy products and ingredients. USDEC is primarily supported by Dairy Management Inc. through the dairy farmer checkoff. How to republish this post.  

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