The U.S. Dairy Exporter Blog: Market Analysis, Research & News

  • The 2018 Global Dairy Business Year in Review

    By Mark O'Keefe December 31, 2018

    See the significant mergers, acquisitions, joint ventures, new facilities, executive hires and marketing initiatives that occurred during 2018.  

    Biz News 2018(2)

    The U.S. Dairy Export Council tracks global dairy business developments every day from news and other sources around the world. We curate and summarize the most important items in our weekly, members-only newsletter, Global Dairy eBrief.

    At the end of the year, we bundle all of the newsy nuggets in a single article that provides a month-by-month snapshot of the top headlines. 

    We put company names in bold for easy scanning.  

    To get similarly packaged news from the last two years, see our 2016 and 2017 reviews. 

    Below is your one-stop, one-of-a-kind historical archive of the most important global dairy business developments of the year.  

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    Australian energy and consumer goods company Jatenergy expanded its dairy sector reach by taking a 51 percent stake in Australian infant formula marketer Golden Koala Group. Golden Koala has been selling Australian-made formula to China for the past seven years. Jatenergy also markets infant and adult milk powder products through its wholly-owned Australian subsidiary Cobbitty Country. (Company reports)

    Arla Foods established a new Indonesian joint venture with dairy and consumer goods company PT Indofood CBP Sukses Makmur. Arla will own 51 percent of Arla Indofood Sukses Makmur. Neither partner revealed details of the JV’s products or production plans. (Company reports)

    Argentine press is reporting that the long-rumored deal for New Zealand’s Fonterra to buy a majority stake in troubled Argentine dairy Sancor could take place this month . . . Netherlands-based ingredient distributor Barentz acquired Serbian functional protein distributor Soforebo. (Company reports; La Nacion, 1/3/18)

    Arla Foods’ dairy exports to China were on track to exceed €100 million (about US$120 million ) in 2017, and the company is projecting annual growth in the 25-30 percent range over the next few years . . . France’s Lactalis signed a deal with Dubai-based importer/distributor Chef Middle East that aims to broaden distribution of Lactalis cheese in the hotel sector in the Middle East . . . Ornua plans to rebuild its fire-damaged Ingredientes España cheese production facility in Avila, Spain . . . Italian pizza chain Alice Pizza plans to open its first Middle Eastern unit in Dubai this month . . . Prairie Farms Dairy is investing $29 million in a UHT milk plant at its Battle Creek, Mich., operation. (USDEC Middle East office; Battle Creek Enquirer, 1/4/18; Hotelier Middle East, 1/2/18; Agriland, 12/21/17; Reuters, 12/15/17)

    In a disagreement over product branding, New Zealand dairy cooperative Fonterra is taking Australia’s Bega Cheese to court. After acquiring a number of Kraft brand products from Mondelez International in 2017, Bega has changed some of the product names to its own brands with the Bega logo and trademark. Fonterra claims the rebranding violates its commercial and distribution agreement granting it “sole and exclusive license” to the Bega brand in Australia. (news.com.au, 1/5/18)

    Emmi Group’s Spanish subsidiary, Kaiku, has announced plans to increase its stake in Tunisian dairy company Centrale Laitière de Mahdia from 45.4 percent to 54.7 percent. Selling under the Vitalait brand, Centrale Laitière de Mahdia has grown steadily in recent years and is now reportedly the second largest dairy company in Tunisia. Besides fluid milk, it produces yogurt, yogurt drinks and desserts. (FoodBev Media, 1/10/18; Company reports)

    Shareholders of The Icelandic Milk and Skyr Corp. (Siggi’s) are selling the yogurt company to French dairy group Lactalis, pending regulatory approval in the United States where Siggi’s is headquartered. Switzerland’s Emmi, noted above, had owned a 22 percent stake in Siggi’s. (Company reports)

    Latvia’s Food Union is investing €11.1 million (about US$13 million) over the next two years to build a center of excellence for fresh dairy products in the Latvian capital of Riga . . . Finnish dairy company Valio is now paying one cent extra per liter to farmers who commit to responsible dairy production focused on animal well-being . . . Dairy Farmers of Canada named Jacques Lefebvre as its new CEO . . . Norwegian dairy company TINE took to social media to ask consumers for their input on how “best if used by” labels should be worded, and consumers chose the option: “best before, but not bad after.” (Company reports; DairyReporter.com, 1/9/18, 1/5/18; FoodBev Media, 01/09/18)

    New Zealand’s Fonterra has teamed with Alibaba’s new retail concept, Hema Fresh, to launch a new fluid milk in China under the label Daily Fresh. The milk, sourced from Fonterra’s Chinese dairy farms, is labeled by the day of the week it is produced to emphasize its freshness. It targets China’s increasingly sophisticated and expanding middle class and its rising interest in “premium” products. Hema Fresh, which launched in 2016, targets that same audience. The store concept combines brick-and-mortar with digital: Consumers can either shop in-store using their mobile phones to browse and purchase, or order online for a 30-minute delivery within a 3km radius. Hema Fresh also carries Fonterra’s Anchor butter, cream, cheese and UHT milk. (Company reports)

    After a nine-month negotiation process, Milk Alliance (a group of nine Ukrainian dairy manufacturers) has begun shipping cheese to the UAE. The company is currently sending processed cheese under the Family Harvest name, as well as a provolone-type cheese. Late last year, Milk Alliance also made its first shipment of UHT milk to Bahrain. (Company reports)

    French dairy company Danone has announced it will discontinue many of its dairy products in India, including yogurt and smoothies, and shut down a factory at Rai near Delhi. The company will focus instead on nutrition products and baby food with brands like Protinex, Farex, Nusobee and Dexolac. According to analysts, Danone appears to have been the victim of tough competition from existing dairy market leaders such as Amul, Nestlé India and Britannia. They also cite pricing and supply chain issues that made it difficult for Danone to compete in India. (BloombergQuint, 1/16/18)

    Argentine dairy company SanCor is selling its share in joint venture Arla Foods Ingredients SA to joint venture partner Arla Foods. The sale, which includes a whey processing plant in Porteña, is part of SanCor’s restructuring prior to its rumored link up with New Zealand’s Fonterra. (Diario Castellanos, 1/13/18)

    On March 17, California Dairies Inc. (CDI) will cease operations at its Los Banos manufacturing facility, affecting 63 employees. In conjunction with the closure, CDI will exit the cream cheese and neufchatel business, which was served solely by the Los Banos plant. CDI will continue to operate five other manufacturing facilities and no other product segments will be affected. (Company reports)

    New Zealand’s a2 Milk Co. is expanding distribution to nine states in the northeastern United States. With the Northeast expansion, a2 Milk (touted for its A2 protein type) will be available nationally through natural foods chains and/or major grocers . . . Private equity firm Advent International has reportedly tapped an investment bank to sell its dairy brand Noosa Yoghurt. Advent bought Noosa in 2014 . . . South Africa’s Aspen Pharmacare says it received clearance from the China Food and Drug Administration to continue selling its Alula infant formula in China . . . Aurora Organic Dairy named Scott McGinty as CEO. Company founder Marc Peperzak will stay on as executive chairman. (Company reports; fin 24, 1/15/18; The New York Post, 1/10/18)

    Vietnamese dairy company Nutifood has signed a contract with an American distributor to sell its Pedia Plus infant formula line in the United States. Pedia Plus specifically targets children lacking proper nutrition. Nutifood eventually hopes to build factories in the United States to produce dairy products such as fresh milk and yogurt. (Nikkei Asian Review, 1/20/18)

    Egyptian dairy processor Arabian Food Industries (Domty) plans to enter the baked goods market in the first quarter of 2018 . . . Two European pizza restaurants are opening shop in the Middle East: Milan-based Spontini expects to launch in Kuwait through a partnership with Kuwait-based food franchise operator M.H. Alshaya; and Switzerland’s Luigia already debuted in Dubai through a partnership with Sunset Hospitality.

    New Zealand’s Fonterra says it is “extremely disappointed” that one of its business partners in China, Beingmate Baby & Child Food Co., expects to lose NZ$171 million-$214 million (US$127 million-$158 million) for the year ending December 2017. The co-op, which owns a minority share in Beingmate, says it is looking into “reservations” about the business expressed by some board members. Despite the earnings downgrade, Fonterra said its rationale for the investment still stands, given forecasts for strong infant formula demand growth in China. (Company reports; IEGVu, 1/22/18)

    Fonterra Australia will invest A$165 million (about US$133 million) to boost production in seven of its processing plants in the Australian states of Victoria and Tasmania. This will create capacity for an extra 515,000 tons of milk, which means Fonterra will need to recruit at least 100 new farmer suppliers. A majority of the money will go toward increased cheese production. Construction is already underway, with plans to have the upgrades completed this spring. (The Weekly Times, 1/23/18)

    New Zealand’s Food Waikato is building a new NZ$45-million (about US$33-million) spray dryer to produce sheep milk powder and infant formula. The company expects the facility, located at the Waikato Innovation Park in Hamilton, to generate NZ$129 million in annual export revenues . . . O-AT-KA Milk Products Cooperative is expanding its production facility in Batavia, N.Y., by more than 20,000 square feet for a new retort beverage production line and related equipment . . . Titletown Cheese Trading Co. expects to begin renovations on the former Lake to Lake cheese factory it purchased in Denmark, Wis., in the next few weeks. The company says the cut-and-wrap operation will help facilitate its expansion into global markets and expects the renovation will take 90 days . . . New Zealand’s Synlait Milk formed a partnership with supermarket cooperative Foodstuffs South Island to become the retailer’s exclusive dairy provider. To support the deal, Synlait will invest NZ$125 million (about US$91 million) to build a new milk and cream (fresh and UHT) plant at its Dunsandel, South Island, site . . . New York-based Cayuga Milk Ingredients received non-GMO Project Verification for its entire portfolio of Grade A dairy ingredients . . . Zimbabwe milk processor Dendairy is adding pasteurized milk and yogurt capacity to its Kwe Kwe facility, with the aim of expanding export operations in central and southern Africa. (Company reports; BusinessDesk, 1/22/18; The Herald, 1/19/18; FoodBev Media, 1/17/18; Dairy Reporter, 1/19/18; WBAY-TV, 1/16/18; Empire State Development, 1/10/18)

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    Glanbia Ingredients is coordinating a European Commission project called AgriChemWhey in Ireland. AgriChemWhey, funded largely by the Bio-based Industries Joint Technology Initiative and backed by a consortium of EU research, engineering and commercial interests, seeks to develop technology to process dairy side streams into high-value commercial products. The plan is to build a €37-million integrated bio-refinery that will initially process 25,000 tons per year of whey permeate and de-lactosed whey permeate into L-lactic acid, polylactic acid, minerals for human nutrition, and bio-based fertilizers. If successful, the blueprint would be replicated across Europe. (Bio-based Industries Joint Technology Initiative; DairyReporter.com, 1/29/18)

    Chinese media is reporting that Beingmate Baby & Child Food Co. is laying much of the blame for its poor financial performance on disagreements with shareholder Fonterra Co-operative Group. Beijing News quotes a letter it claims Beingmate sent to Chinese regulators noting that differences between the two parties are “seriously affecting the company’s business operation and development.” The previous week, Fonterra publicly expressed its concern over Beingmate’s poor performance. Media reports suggest Fonterra, which is the second largest shareholder in Beingmate with nearly a 19 percent stake, might be angling to take over the company. (USDEC staff)

    Denmark-based dairy company Arla Foods plans to increase investments to a record €527 million (about US$656 million) this year from €335 million (about US$417 million) last year. Arla expects to put half of the money into projects outside of Europe, in growing markets like the Middle East, North Africa, China, Southeast Asia, Sub-Saharan Africa and the United States. It will also invest in its production facilities in Denmark, Britain, Germany and Sweden. Separately, Arla is closing its Brabrand dairy facility in Aarhus, Denmark, and transferring production of fermented milk products like yogurt, skyr and crème fraîche to other facilities in Denmark, Holland and Germany. Citing Braband’s size and age, the co-op said it made more sense to move production and expand its other sites to meet rising EU demand. (Company reports; Reuters, 1/31/18)

    New Zealand’s Fonterra released further details about its Australian capital spending plans. About NZ$125 million (about US$92 million) of the total NZ$165 million budget will go toward adding 35,000 tons of primarily cheddar and mozzarella capacity at its Stanhope, Victoria, cheese plant . . . Chinese dairy company Yili Group is eyeing global expansion. The goal, Yili’s chief executive told Chinese news media, is to sell to 2 billion consumers at home and abroad within the next three years . . . New Zealand dairy farmland fund Southern Pastures has become a shareholder of Kiwi dairy co-operative Westland Milk Products. The agreement will add an extra 4,000 metric tons of milk solids to Westland’s milk collection annually from Southern Pastures’ nine Canterbury dairy farms. (Company Reports; Caixin Global, 1/25/18; New Zealand Herald, 1/31/18; Riverine Herald, 1/30/18)

    Lactalis CEO Emmanuel Besnier expects the ongoing salmonella scandal will cost the company “several hundred million euros” and the permanent closure of at least one operation at its site in Craon, France. Besnier acknowledged that salmonella cases linked to Craon date back to 2005, and other babies could have been affected over the past 13 years. (France’s Institut Pasteur reports 141 salmonella cases in French infants were reported in 2005 and at least 25 from 2006-2017.) He also questioned why 16,000 quality tests performed by an unidentified private lab last year yielded no signs of contamination.Separately, in a January 30 letter, nine members of the European Parliament have urged the EU Competition Commission to examine Lactalis’s tax practices. The letter claims the average tax rates of Lactalis subsidiaries in Belgium and Luxembourg have been 2.5 and 2.8 percent, respectively, in recent years, and that Lactalis’s tax practices “deserve particular attention.” (Bloomberg, 2/5/18; The Independent, 2/2/18; Reuters, 2/1/18)

    A group of 11 Maori groups are partnering with Japanese food company Imanaka to build an NZ$32-million (about US$23-million) dairy ingredient processing facility in Kawerau on New Zealand’s North Island. The facility, expected to start operating in early 2019, will produce organic and standard milk powder and MPC for sale to export markets, beginning with Japan. The Maori investors will hold a two-thirds stake in the business; Imanaka’s Cedenco Dairy unit will control the remaining third. (BusinessDesk, 2/7/18)

    Arla Foods bolstered its organic lineup in Britain by acquiring Yeo Valley Dairies from Yeo Valley Group. The deal gives Arla the rights to the Yeo Valley label for fluid milk, butter, spreads and cheese in the UK. Yeo Valley Group retains ownership of the brand for yogurt, ice cream and desserts . . . Polish pharmaceutical company Polfa and dairy company Mlekovita plan to build a €68-million (about US$84-million) infant formula plant in 10th of Ramadan City, northeast of Cairo, Egypt . . . Unilever is acquiring Romanian ice cream company Betty Ice SRL . . . Two Irish dairy cooperatives, North Cork Co-operative Creameries and Feale Bridge & Headley Bridge Co-operative plan to merge following board and membership approval. North Cork is also in negotiations with Ireland’s Newtownsandes Co-op on a potential merger. (Company reports; Dairy Markets, 2/2/18; Agriland, 2/5/18, 2/6/18)

    Nestlé launched Coffee-Mate Milky in Thailand, a product it calls the “world’s first dairy coffee enhancer.” Manufactured in South Korea, Coffee-Mate Milky is made with imported milk from New Zealand and the United States. The company expects the product to “excite the instant coffee market and drive the coffee personalization trend.” (Company news)

    New Zealand’s Synlait Milk and China’s Bright Dairy signed a five-year supply agreement for packaged infant formula. The deal marks a four-fold increase over the companies’ previous contract and provides certainty around production volumes for Bright Dairy’s infant nutrition brand Pure Canterbury. Synlait and Bright believe the new deal may help efforts to register Pure Canterbury with the China Food and Drug Administration as part of stricter food safety standards. Bright owns a 39 percent stake in Synlait. (Company reports)

    France’s Danone plans to sell part of its 21 percent stake in Japanese probiotic dairy company Yakult. Danone will sell two-thirds of the stake, valued at €1.5 billion (about US$1.9 billion), to boost stakeholder returns and meet its commitments for better capital allocation . . . FrieslandCampina acquired all remaining shares in its Chinese joint venture Friesland Huishan Dairy . . . U.S. specialty food importer Atalanta Corp. acquired ANCO Fine Cheese from Schratter Foods Inc. . . . Philippine restaurant chain Jollibee Foods is buying a majority stake in Colorado-based Smashburger. (Company reports, Reuters, 2/14/18, Denver Business Journal, 2/13/18)

    Commercial Creamery is building a $7-million, 10,000-sq.-ft. expansion at its Jerome, Idaho, plant to increase cheese and powder production by 20-30 percent . . . Magic Valley Quality Producers is planning a $20-million expansion to its facility in Jerome, Idaho. The expansion will allow Magic Valley to process ultra-filtered skim milk, condensed skim milk and cream . . . Latvian dairy processor Baltic Dairy Board plans to shift its product lines away from cream, WPC and MPC and toward niche ingredients like galacto-oligosaccharides over the next six months . . . Finland’s Valio plans to launch a lactose-free line of ice creams in Finland and the Russian cities of Moscow and St. Petersburg. It marks Valio’s return to the ice cream market after more than a decade . . . Nestle Nigeria opened a new $11-million production line for its Milo ready-to-drink beverage at its Agbara manufacturing plant . . . McDonald’s Japan posted a record-high net profit of ¥24 billion (about US$225 million) last year. (Company reports; Jiji Press, 2/13/18; FoodBev Media, 2/12/18; Premium Times, 2/12/18; MagicValley.com, 1/19/18)

    Fonterra is relaunching its fortified Anlene milk brand in Thailand after a 22-year hiatus. The co-op markets it as an “adult milk” to build healthy bones, joints and muscle for better mobility . . . Nestlé plans to roll out organic milk in Brazil in the first quarter of 2019. The launch is part of a broad new product development package targeting rising organic food and beverage demand in the region. (The Nation, 2/20/18; Reuters, 2/20/18)

    New Zealand’s Fonterra and a2 Milk Co. (a2MC) are forming a wide-ranging partnership that could significantly increase the global penetration of A2 beta-casein dairy products. Under the deal, Fonterra will develop A2 milk pools in New Zealand and Australia and manufacture products for domestic and export use under the a2 brand. Fonterra will exclusively supply nutritional milk powder products in bulk and consumer packages for sale in new a2MC priority markets across Southeast Asia and the Middle East. The partners also plan to explore developing a2-branded butter and cheese, building a jointly owned packaging facility and sourcing A2 milk in China. (Company news)

    Dave Thomas, CEO of American Dairy Products Institute (ADPI), plans to retire effective June 30, 2018. Thomas has led the organization since 2012. The ADPI board has formed a search committee to identify Thomas’s replacement.

    Great Britain’s Meadow Foods acquired Roil Foods in a bid to expand its global dairy product portfolio. Roil Foods manufactures edible dairy-based oils, including organic AMF, concentrated butter and ghee . . . Italian dairy firm Granarolo acquired British food distributor and e-commerce operator Midland Food Group . . . German supermarket chain Aldi purchased the Kokárdás dairy brand from Hungarian dairy producer Alföldi Tej. (Food Manufacture, 2/21/18; Reuters, 2/19/18; Budapest Business Journal, 2/16/18) 

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    Fonterra’s foodservice business
    Anchor Food Professionals plans to roll out Red Cow White Cheese in the Middle East early in 2018. Anchor says the product is a multi-purpose, bake-stable, creamy white cheese tailored to Middle Eastern tastes . . . Denmark’s Arla Foods continues to expand its branded organic milk presence in the Middle East. After introducing Arla Organic Milk to the United Arab Emirates last year, Arla launched the product in Saudi Arabia with plans for Lebanon and Kuwait later this year. (USDEC Middle East office; Saudi Gazette, 2/28/18)

    Less than a week after a2 Milk and Fonterra Co-operative Group announced a major business partnership, Australia’s Freedom Foods Group unveiled plans to get into the A2 dairy sector. The company expects its new 1- and 2-liter UHT cartons of A2 milk to spearhead expansion in Asia and Australia. (Queensland Country Life, 2/28/18)

    Canada’s Agropur is reportedly spending US$250 million to triple milk processing capacity at its Lake Norden, N.D., cheese plant from 3 million lbs. per day to more than 9 million. Agropur plans to finish the expansion by early 2019 and market the cheese and whey globally. (Company reports; Watertown Public Opinion, 2/28/18)

    New Zealand dairy processors continue to add production capacity. Here’s an update on recent developments.

    • Synlait Milk purchased land in Pokeno, Waikato, to build a NZ$260 million (about US$188 million) nutritional powder manufacturing factory. The facility will produce 40,000 tons per year to meet growing demand from existing customers, including a2Milk, New Hope Nutritional, Bright Dairy and Munchkin.
    • Danone officially unveiled an NZ$25 million (about US$18 million) investment at its Auckland infant formula plant, effectively doubling the facility’s production capacity to better service Asia and Australia.
    • Local authorities gave Happy Valley Milk (HVM) the go-ahead to build an NZ$230 million (about US$166 million) infant formula factory in Otorohanga, Waikato. The facility requires additional consents before construction can begin. HVM plans to specialize in consumer-ready infant formula and other nutritional milk-based formulas using organic and A2 milk.
    • Open Country Dairy expects its new ingredients plant in Horotiu, Waikato, to start taking milk in late August. The company did not reveal costs or capacity. (BusinessDesk, 2/27/18; TVNZ, 2/26/18; New Zealand Herald, 2/23/18; FoodBev Media, 2/23/18; Radio New Zealand, 2/9/18; NZFarmer.co.nz, 2/8/18, 1/25/18)

    Australian regulators have expressed concerns about Saputo’s acquisition of Murray Goulburn Co-operative (MG). The Australian Competition and Consumer Commission (ACCC) says the takeover could leave some dairy farmers in Victoria with insufficient buyer options. Analysts believe the deal may need to be amended to account for the concern. (Reuters, 3/1/18)

    Wisconsin-based Foremost Farms is building a $58-million milk condensing plant in Greenville, Mich. At capacity, when fully operational, the plant will be able to handle up to 4 million lbs. of raw milk per day. . . Fonterra signed a distribution agreement with ACI Agrolink Ltd. to distribute its Anchor products (milk, butter, cheese, yogurt and milk powders) in Bangladesh . . . UK firm Kendal Nutricare signed an £85-million (about US$118 million) five-year contract extension with Chinese import/export company Orient International Holding Shanghai Foreign Trading Co. to distribute Kendamil infant formula in China . . . Mondelez International opened a new R&D technical center in Singapore, part of a $65-million investment in a network of nine “Research, Development, Quality and Innovation” hubs across the globe . . . UK cheesemaker Long Clawson Dairy completed a £7-million (about US$10-million) expansion of its headquarters, packaging and cold storage facilities in Leicestershire in a bid to drive global sales . . . Canada’s Agropur and institutional investor Caisse de dépôt et placement di Québec are setting up a C$40-million (about US$31-million) investment platform to fund innovative businesses specializing in dairy-related products and technologies. (Company reports; Grand Rapids Business Journal, 2/27/18; FoodManufacture.co.uk, 2/23/18; The Westmorland Gazette, 2/8/18; FoodNavigator-Asia.com, 2/7/18)

    Fonterra Ventures, an arm of New Zealand dairy co-op Fonterra, entered into a strategic partnership with German functional food start-up foodspring. Fonterra expects the new partnership will help the company better capitalize on the growing “active nutrition” consumer segment. Based in Berlin, foodspring targets the healthy eating, weight management and muscle-building food categories. It markets whey protein shakes, organic “superfoods” and other products online, across Europe and Asia. Fonterra Ventures’ mission is to develop new business models and explore new opportunities with innovative start-ups. Fonterra also announced a partnership with New Zealand-based technology consultants Beca to develop a virtual-reality health and safety training program that lets employees navigate the co-operative’s manufacturing and distribution sites virtually without the need to set foot on site. (Company news)

    Glanbia plc, Dairy Farmers of America (DFA) and Select Milk Producers finalized a joint venture partnership to build, supply and operate a new large-scale cheese and whey production facility in Michigan. Site selection is underway. When complete in 2020, the new facility will produce cheese and whey products for U.S. and international markets. Glanbia will hold a 50 percent stake in the “Michigan Joint Venture,” with DFA and Select holding the balance. Michigan Milk Producers Association will participate in the project as a strategic milk supplier to the new facility. (DairyBusiness, 3/6/18)

    Saputo proposed selling Murray Goulburn Cooperative’s (MG’s) Koroit, Victoria, processing plant after the Australian Competition and Consumer Commission cited competition concerns about the Canadian dairy giant’s takeover of MG. Saputo’s Warrnambool Cheese and Butter plant in Allansford, Victoria, and MG’s Koroit site together would control much of the raw milk processing capacity in western Victoria, which could leave some famers there with insufficient buyer options. Australian media reports Bega Cheese is one of the potential Koroit suitors. (The Standard, 3/07/18; Reuters, 3/4/18)

    German food company Dr. Oetker and Bavarian dairy group Molkerei Gropper plan to form a joint venture to focus on joint production and marketing of refrigerated desserts, yogurt, quark and dairy and non-dairy beverages . . . Michigan-based Lipari Foods acquired Jim’s Cheese, a cheese cutting and packaging firm in Waterloo, Wis. . . . Pure Nutrition, the joint venture between China’s Ausnutria and New Zealand’s Westland Milk Products, commenced operations near Rolleston, on New Zealand’s South Island. It will can milk powders and other nutritional products sourced from Westland for Ausnutria and other customers. (Company reports; Crain’s Detroit Business, 3/05/18; Riverine Herald, 3/3/18; YumDa, 2/27/18)

    An Australian startup, No Bull Milk Processing, is looking to build a NZ$130-million (about US$94-million) manufacturing facility in Cohuna, Victoria. The plant would produce dry dairy ingredients for local and export sale . . . Nestlé Canada announced a C$51.5 million (about US$40 million) expansion of its London, Ontario, ice cream factory . . . Organic Dairy Farmers of Australia signed a long-term deal to supply Bega Cheese with organic milk. Bega will use the milk (which will replace organic milk powder imported from Europe) to produce organic infant formula for domestic and export markets . . . New Zealand dairy company Synlait Milk opened a new research and development unit at Massey University on New Zealand's North Island . . . Tony Sarsam, formerly CEO of Ready Pac Foods, was named CEO of Borden Dairy Co. in Dallas. (Company reports; The Weekly Times, 3/7/18; NZFarmer.co.nz, 3/02/18; Food Business News, 2/28/18)

    Foremost Farms USA Cooperative sold its pharmaceutical-grade lactose business and Rothschild, Wis., processing plant to Kerry Group’s Kerry Bio Science division. The two companies have a long-standing relationship (Foremost manufactures pharmaceutical grade lactose under Kerry’s Sheffield brand) and say they will continue that relationship. Foremost says it plans to reinvest the earnings from the sale into other value-added whey protein products to compete in the global market. (Wausau Daily Herald, 3/6/18; Wisconsin State Farmer, 3/5/18)

    India’s Jubilant FoodWorks formed a joint venture with Bangladesh-based Golden Harvest QSR to expand Domino’s Pizza into Bangladesh. Jubilant currently operates more than 1,100 Domino’s stores (and 40+ Dunkin’ Donuts units) in India and Nepal . . . New Jersey-based Carrington Farms acquired Tera’s Whey, a certified organic whey protein company based in Wisconsin, to help build its protein powder portfolio and drive its innovation efforts in the health and wellness space . . . Müller UK & Ireland intends to purchase Nampak’s bottle manufacturing assets adjacent to its Foston and Severnside dairies in the UK, which will allow it to increase the use of recycled plastic in its bottles. (Company reports; Livemint, 3/6/18)

    China’s Mengniu Dairy and shareholder Arla Foods are cooperating on a cheese project in China to produce 13,000 tons of mozzarella per year starting in 2019 . . . Glanbia Ireland is installing a third dryer and additional processing equipment at its Belview, Co. Kilkenny, facility. The company expects the €160-million expansion (about US$198 million) will be operational by 2020 . . . Through their existing strategic alliance, Foremost Farms and Michigan Milk Producers Association (MMPA) are adding a barrel cheese line to MMPA’s Middlebury Cheese facility in Middlebury, Ind. The line will initially process up to an additional 500,000 lbs. of milk per day . . . Chinese-owned packaging manufacturer Jamestrong opened an infant formula can factory in Hornby, New Zealand, to support exports from several milk powder producers, including Synlait Milk, Yashili, NZ Dairy Collaborative and Westland Milk Products . . . French retailer Carrefour plans to extend the use of blockchain technology to cheese, milk and other products. With the technology in place, consumers can use their smartphones to scan a QR code attached to the product label, providing details such as the rearing practices of the animals involved and name of the farmer. (USDEC China office; Farmers Advance, 3/13/18; Business Day, 3/09/18; Dairy Reporter, 3/08/18; Irish Independent, 3/8/16)

    To capitalize on the growing popularity of yogurt in China, Arla Foods Ingredients developed a new skyr product geared specifically toward Chinese tastes. Arla plans to introduce it at this week’s Food Ingredients China exhibition in Shanghai, along with a high-protein yogurt drink and a natural long-shelf-life yogurt snack product . . . FrieslandCampina rolled out its Debic cream line to the Middle East foodservice sector, targeting high-end chef use. The company launched three varieties: Debic Culinaire Original; Debic Stand & Overrun (35 percent fat, formulated for baking and whipping applications); and Debic Whipped Cream with Sugar. (USDEC Middle East office; DairyReporter.com, 3/16/18)

    New Zealand dairy cooperative Fonterra reported a half-year net loss of NZ$348 million (about US$250 million) after taking an NZ$405-million write-down on its Beingmate investment in China and paying NZ$183 million to Danone for damages related to the 2013 botulism scare. Fonterra bought a share in the Chinese food company in 2015, but the share price has since dropped amid poor earnings and questions over its management and strategy. Fonterra CEO Theo Spierings defended the Beingmate investment, saying opportunity remained in the Chinese infant formula sector and turning the investment around was a key priority for the senior management team. Spierings, however, won’t be leading that team for much longer. The co-op announced it had formally commenced succession discussions last year, initiated an international search for a new CEO and was now shortlisting candidates to replace Spierings when he steps down later this year. Fonterra claims the change is independent of shareholder unrest due to the Beingmate situation. Fonterra’s overall sales were off 11 percent (on a milk-equivalent basis) in the first half of the year, attributed to record-low opening inventory and reduced milk collection. On the plus side, the co-op lifted its forecast farmgate milk price for 2017/18 to NZ$6.55/kgMS (from NZ$6.40/kgMS). (USDEC staff; Company reports; Reuters, 3/21/18; Radio New Zealand, 3/21/18; Newshub, 3/21/18)

    New Zealand co-op Westland Milk Products signed a Memorandum of Understanding (MOU) with Indonesian consumer health and nutrition company Kalbe in what the company characterizes as a first step toward a strategic partnership. Westland has been making up for its relatively small size with dynamic deals to expand its global reach in recent months. (USDEC staff; Company reports)

    Investment fund Keen Growth Capital acquired a stake in Massachusetts-based drinkable yogurt company Dahlicious Organic. (Company reports, 3/20/18)

    China’s Alibaba Group Holding is investing another $2 billion into e-commerce subsidiary Lazada after putting $2 billion into the company when it purchased a majority stake in 2016. Singapore-based Lazada operates online marketplaces in six Southeast Asian nations . . . Freedom Foods in Australia wants to raise an extra A$200 million (about US$154 million) to expand its Sydney dairy processing plant and pay down debt. Freedom expects its pending launch of Australia’s Own long-life milk will boost sales and make the plant expansion more imperative . . . New Zealand’s Keytone Dairy is looking to raise NZ$15-$20 million (about US$11-$14 million) from investors to expand operations and increase exports to China and other Asian markets . . . Fonterra is investing NZ$11 million (about US$8 million) in water processing technology to reduce the amount of groundwater extracted at its new plant in Darfield, South Island, by 70 percent. (Company reports; Wall Street Journal, 3/20/18; BusinessDay, 3/17/18; Dairy Reporter, 3/16/18; North Queensland Register, 3/16/18; FoodBev Media, 3/14/18)

    Nestlé introduced an A2 beta-casein protein infant formula product in China under the Illuma Atwo name. The move will intensify competition in the growing A2 milk sector between Nestlé and companies like New Zealand’s a2 Milk Co. and Australia’s Freedom Foods, which already have products on the market. (The New Zealand Herald, 3/29/18)

    Saudi Arabia’s National Agricultural Development Co. (Nadec) has agreed to buy Al Safi Danone Co., a joint venture between Saudi Arabia’s Al Safi Group and France’s Danone . . . Australian formula maker Viplus Dairy hired PwC Australia to explore a potential sale of the company . . . French dairy cooperative Laïta and its subsidiary Epi Ingredients combined their nutrition-focused activities under a new division, ESI Nutrition, to strengthen the company’s position in the global nutrition market . . . Troubled Argentine dairy processor SanCor plans to transfer control of its operations to Argentine milk producer Adecoagro through a joint venture subsidiary. New Zealand’s Fonterra had been rumored to be on the verge of striking a similar deal with SanCor . . . Arla Foods is selling its cheese production site in Sonthofen, Germany, to German-based dairy company Allgäuer Hof-Milch GmbH. (Company reports; DairyReporter.com, 3/27/18; La Nacion, 3/27/18; Reuters, 3/25/18; FoodBev Media, 3/22/18; Australian Financial Review, 3/22/18) 

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    Denmark’s Arla Foods has teamed up with food tech startup Mimica Touch to create “bumpy labels” that signal when dairy products have reached the end of their shelf-life. A gelatin-based gel in the label reacts to changes in the food and temperature, resulting in molecular breakdown and a bumpiness that makes it easier for consumers to see and feel if food is no longer safe to eat. The bumpy packaging is designed to give consumers confidence that even when the use-by date has expired: the food is edible until the gelatin reacts. That, in turn, may help reduce food waste. (The Telegraph, 3/18/18)

    The Australian Competition and Consumer Commission (ACCC) approved Saputo’s purchase of the assets of Murray Goulburn Co-operative (MG), provided Saputo sells the MG manufacturing plant in Koroit, Victoria. Pending approval by Australia’s foreign investment regulator, the Canadian dairy processor expects to finalize the transaction by May 1. It will initially operate Koroit after the takeover but is bound to sell the facility by a set date (which was not revealed). (ABC Rural, 4/4/18)

    New Zealand's Synlait Milk is spending NZ$18 million (about US$13 million) to double lactoferrin capacity at its Dunsandel, South Island, site. In 2017, Synlait sold 11 tons of lactoferrin. It expects to complete the project by this October . . . “Firms milk desire among adults for ‘baby formula’,” an article in The Asahi Shimbun, outlines the rising popularity of milk powder products in Japan targeting adults . . . Blaze Pizza, a restaurant chain backed by basketball’s LeBron James, opened its first overseas unit in Kuwait through a partnership with restaurant operator M.H. Alshaya. (USDEC Middle East office; NZ Newswire, 4/5/18; Asahi Shimbun, 3/30/18)

    Dutch dairy giant FrieslandCampina plans to invest €100 million (about US$124 million) this year to expand sales in China. The money is earmarked to broaden distribution of Friso infant and toddler formula to smaller cities, increase sales of fluid products to the catering sector, and launch additional consumer items (including cheese), among other efforts. (TheDairySite, 4/12/18)

    A series of announcements over the past month point to rising interest in organic milk production and marketing in Australia.

    • Australian Dairy Farms (ADF) is converting all of its Victoria farms to organic as part of a three-year process to reposition the company as an organic infant formula supplier. ADF plans to buy organic milk from outside suppliers to develop its organic business as it converts the properties and builds an organic infant formula plant. The company said it may also pursue organic milk, butter and cheese.
    • Tasmania-based VAN Dairy, a subsidiary of Moon Lake Investments, plans to start exporting organic UHT milk and yogurt products to China by the second half of 2018. VAN is the sister company of Australian milk producer VDL Farms, also owned by Moon Lake, which is seeking Chinese organic certification.
    • Infant formula and milk powder supplier Wattle Health Australia is forming a new joint venture with Organic Dairy Farmers of Australia and Niche Dairy to make and market organic dairy products. The JV, Corio Bay Dairy Group, plans to build an A$55-million (about US$43-million) organic spray drying facility in Geelong, Victoria, capable of handling about 200 tons of raw milk per day. (AAP, 4/10/18; The Australian Dairyfarmer, 4/9/18; Finance Nine, 3/27/18; Small Caps, 3/26/18)

    Chinese state-owned CITIC Agri-Fund Management paid $250 million for a 25 percent stake in Hong-Kong-headquartered Ausnutria Dairy Corp. . . . Australia’s Longreach Oil plans to buy New Zealand dairy startup Happy Valley Milk, which is planning on building an infant formula plant in Otorohanga, Waikato . . . Australian infant formula maker Viplus Dairy reportedly hired PwC Australia to search for potential buyers. (BusinessDesk, 4/11/18; Reuters, 4/6/18; Australian Financial Review, 3/22/18)

    Leprino Foods is investing $15 million to expand its operation in Chaves County, New Mexico, including a new refrigerated/freezer warehouse . . . Sargento Foods is adding 41,500 sq. ft. of production and warehouse space at its Kiel, Wis., facility. This follows a 40,000-sq.-ft. addition to its Hilbert, Wis., plant announced in late 2017. Both projects are slated for completion this year . . . Nestlé is spending $1.5 million to add a milk powder sachet packaging line to its plant in Pernambuco, Brazil. The company expects to complete the project by the first quarter of 2019 and for the line to produce 10,000 tons annually by year four . . . Wisconsin Milk Marketing Board is changing its name to Dairy Farmers of Wisconsin. (Company reports; Artesia Daily, 4/4/18; AP, 4/4/18; Milkpoint, 4/3/18)

    A handful of multinational food and beverage companies announced major plant openings in recent weeks.

    • Mars Inc. inaugurated a $43-million expansion at its chocolate plant in the Greater Cairo Area in Egypt.
    • Calling the Middle East and Africa “priority markets,” Mondelez christened a new $90-million snack manufacturing plant in Bahrain to produce brands like Oreo, Barni and belVita.
    • Nestlé opened a $120-million pet food plant in Teno, Chile. Nestlé Health Sciences inaugurated a plant in Taizhou in China’s Jiangsu Province to produce foods for special medical purposes (FSMP). The FSMP facility and a second Galderma skin-care operation that opened at the same time cost Nestlé just over $150 million. In Africa, Nestle Cameroon dedicated a $5 million facility to blend and package milk products like Nido Forti Choco, a sweetened, chocolate milk powder drink.
    • PepsiCo opened a new $42-million plant in Timashevsk, Russia (in the Krasnodar region near the Black Sea), to make children’s dairy products including cheese and yogurt under brand names like Agusha and Chudo detki. (USDEC Middle East office; Company reports; The Dairy News, 4/23/18; Business in Cameroon, 4/12/18)

    Northern Irish dairy co-op LacPatrick Dairies is exploring a potential sale or joint venture. Ireland’s Aurivo Co-operative Society and Belfast-based dairy processor Dale Farm have already expressed interest in acquiring or partnering with the dairy . . . India’s Parag Milk Foods paid $4.5 million for Danone’s yogurt and cheese plant in Rai, Haryana. Danone discontinued many of its Indian dairy activities earlier this year. (Irish Independent, 4/19/18; Economic Times, 4/19/18)

    BelGioioso Cheese is building a new $25-million, 100,000-sq.-ft. plant in Glenville, N.Y., to manufacture mozzarella and other cheeses . . . Arla Foods is looking to cut €400 million in costs (about US$489 million) by the end of 2020 to offset a drop in profitability due to lower SMP prices and the currency impact of Brexit. The co-op is still finalizing details of the plan. See its news release for more information . . . Britain’s First Milk plans to sell two cheese plants in Scotland. The facilities in Campbeltown and on the Isle of Arran require significant investment to maintain operating efficiency, the company said . . . Indian milkshake chain Keventers plans to open 30 outlets in the UAE by the end of the year. It currently operates four in the region . . . Ireland’s Ornua announced John Jordan would take over as CEO when Kevin Lane retires at the end of June. Jordan is currently CEO of Ornua Foods Europe, Middle East, Africa and Asia. (Company reports; USDEC Middle East office; Times Union, 4/19/18)

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    Foreign dairy and food processors and major exporters continue to expand distribution and tap innovation to win over customers. Here are some developments from the first quarter.

    • Australia’s Nature One Dairy launched three age-tailored milk formulas in Singapore. Fortiplus Nutritional Adult Formula targets people over 40. Nature One Student Formula contains additional B vitamins, zinc and DHA. Nature One Premium Junior Milk Drink, Step 4, targets 3-6 year-olds and has additional vitamin D, calcium, iron and a prebiotic.
    • Ireland’s Aurivo and Ornua debuted Forto enriched milk powder in Nigeria. “With the population of Africa expected to reach 2.5 billion in the future, we are committed to exploring further business opportunities in the region,” said Aurivo CEO Aaron Forde.
    • Fonterra rolled out two new versions of Anchor brand cheese: Protein+ and Zero Lacto. The products will initially sell on the domestic market. Fonterra also signed a deal with Kiwi startup Apollo Foods to jointly develop and manufacture dairy and fruit beverages at Apollo’s new facility in Whakatu, Hawke’s Bay.
    • Kraft Heinz, through a strategic partnership with Alibaba’s Tmall, launched a line of Oreo-lookalike biscuits (including a cheese-filled variety) developed specifically for Chinese tastes. Called Jif Jaf, the line targets younger, “adventurous” eaters. The products and marketing took a year to develop, with characters and backstories created for each biscuit variety.
    • Milk New Zealand Dairy, the export arm of Alibaba-owned Theland New Cloud, is working with a number of New Zealand dairy processors to develop specialized milk products for sale in China. Theland Farm Group operates the New Zealand farms where the milk is sourced. Products so far include a drink powder with lactoferrin aimed at young adults and marketed as an immunity support and a still-in-development “fashion milk.” (Company reports; Punch, 3/30/18; NZFarmer.co.nz, 3/15/18; DairyReporter.com, 3/2/18)

    Australia’s A2 Milk Co. signed a sales and distribution agreement with South Korean pharmaceutical giant Yuhan Corp. Yuhan plans to start selling A2 milk and infant formula sourced from Australia and New Zealand, as well as a range of additional nutritional products, starting in the second half of 2018. (Australian Financial Review, 4/16/18)

    Japanese conglomerate Kaneka Corp. is entering the dairy sector through a technical partnership with Belgium’s Pur Natur Invest. Kaneka Shokuhin, the company’s food arm, began selling fluid milk under the Milk for Bread brand this month. It plans to gradually introduce additional product lines beginning with butter in May and is considering building its own dairy plant in Hokkaido. (Company reports)

    Fonterra and Chinese ecommerce giant Alibaba are testing blockchain technology and QSR codes on Anchor brand milk products sold through Alibaba’s Tmall online sales platform. The project, part of Alibaba’s “Food Trust Framework,” aims to enhance consumer confidence by eliminating product fraud, a growing problem in the global food marketplace (see “Food Fraud: Protecting Your Brand in the Age of Globalization,” published last year in Global Dairy eBrief Exclusives). Blockchain technology—originally developed to prevent fraud in the world of virtual currency—provides end-to-end transparency and traceability throughout the supply chain. When coupled with QSR codes, the system authenticates, verifies, permanently records and provides ongoing reporting of the transfer of ownership of goods, including food products. Should the pilot prove successful, Alibaba plans to roll it out to all sellers, producers and transporters on Tmall Global. (Company reports; BusinessDay, 4/27/18)

    Brazilian dairy processor Tirol Alimentos expects to open phase 1 of a new dairy processing plant in Pinhalzinho, Santa Catarina, this month. The plant will initially produce condensed milk (10 million boxes per month), but Tirol plans to add milk powder (for domestic and export markets) and dulce de leche in future stages over the next three years. The project’s total cost is estimated at US$50 million. (Milkpoint, 5/2/18)

    Saudi Arabia’s Saudia Dairy and Foodstuff Co. (SADAFCO) reached an agreement to acquire Polish dairy processor Mlekoma through Polish holding company Visdal Investment . . . Saputo completed its acquisition of Australia’s Murray Goulburn Co-operative. (Company reports; Argaam, 5/1/18)

    Australia’s Bega Bionutrients, the specialty health and nutritional ingredient unit of Bega Cheese, is launching a microencapsulated lactoferrin under the label Inferrin. The company says the microencapsulation protects the product from degradation in the stomach, opening new applications in nutritional products and dietary supplements.

    FrieslandCampina DOMO obtained certification in the EU and U.S. to market 2’-fucosyllactose, a human milk oligosaccharide (HMO), for use in infant formula. The company hopes to launch the HMO by the end of the year. (Company reports; DairyReporter.com, 5/8/16)

    Nestlé paid more than $7 billion for the “perpetual rights” to market Starbucks consumer and foodservice products globally, outside of the company’s coffee shops. Nestlé says it will work closely with the coffee chain on new product development and hopes to accelerate growth in “out-of-home channels.” (Company reports)

    Saputo decided to continue cream cheese operations at the Kiewa, Australia, manufacturing plant it acquired in the Murray Goulburn acquisition. MG had slated the facility for closure . . . Lithuanian dairy processor Vilkyskiu Pienine is reportedly considering building a new €30-40 million (about US$36-48 million) cheese and whey manufacturing plant in Taurage. Whey is Lithuania’s No. 2 dairy commodity export. The country shipped 79,470 tons in 2017, a 10 percent increase over the previous year . . . Sibirskaya Niva, a subsidiary of Germany’s EkoNiva, is planning to build the largest cheese manufacturing plant in Russia at a cost of more than $200 million. The plant will reportedly produce 100 tons of semi-hard cheese per day . . . The Papua New Guinea government has invited New Zealand’s Fonterra to set up dairy operations in the country to support expected growth in domestic demand. Fonterra is reportedly sending a team to conduct a feasibility study. (The Australian Dairyfarmer, 5/10/18; EMTV News, 5/7/18; Dairy Markets, 5/4/18; Elite Magazine, 5/4/18)

    New Zealand dairy manufacturer Keytone Dairy Corp. plans to list on the Australian Securities Exchange to raise funds for expansion. The company, which operates a CNCA-listed powder blending and packaging facility in Sockburn, a suburb of Christchurch, is seeking A$15 million (about US$11 million) to support construction of a second plant southwest of Christchurch in Rolleston. Annual capacity of the new facility would be 3,500 tons. (Company reports; BusinessDesk, 5/10/18)

    Starbucks unveiled a plan to more than triple Chinese revenues over the next five years and speed up new store construction. The company plans to reach the 6,000-store mark by 2022 (up from about 3,300 stores today). That roughly comes out to a new unit every 15 hours over the next four-and-a-half years. (Bloomberg, 5/15/18)

    Leprino Foods acquired an additional 21 percent in Brazilian cheesemaker Lactojara Indústria e Comércio de Laticínios. The deal gives Leprino a total 70 percent share in the dairy company . . . Germany dairy processor DMK Group acquired the remaining 40 percent of Russian cheesemaker RichArt Group. It had made its initial purchase of 60 percent of RichArt in 2016. (Company reports; Global Legal Chronicle, 4/20/18)

    Japan’s Yakult is investing $100 million to expand its Chinese probiotic drink plant east of Wuxi . . . Fraser & Neave (F&N) plans to double capacity at its Pulau Indah, Malaysia, canned milk plant. The facility currently produces 16 million cans per year . . . A group of Southeast U.S. dairy farmers who previously marketed their milk independently have formed a new co-op: Appalachian Dairy Farmers Cooperative. Piedmont Milk Sales will market the group’s milk and manage day-to-day business under direction of the co-op’s board . . . Latvia’s Baltic Dairy Board has filed for bankruptcy protection as the company transitions from producing mainstream dairy ingredients like WPC and MPC to niche ingredients like galacto-oligosaccharides. (USDEC Southeast Asia office; Company reports; Xinhua, 5/17/18; High Plains Journal, 5/9/18)

    FrieslandCampina and Veris Investments (a Dutch investment firm specializing in food chain investment in Sub-Saharan Africa) purchased a minority stake in Ethiopian dairy processor Holland Dairy. Holland manufactures yogurt, pasteurized milk and other products at its plant in Debre Zeit. FrieslandCampina expects the deal to strengthen its export position in Ethiopia. It currently ships Dutch Lady UHT milk and Coast milk powder to the country. (Company reports)

    Britain’s Dairy Crest is spending £85 million (about US$114 million) to expand cheese and whey capacity at its Cornwall manufacturing plant. The phased project, taking place over the next five years, will increase cheese capacity from 54,000 tons per year to 77,000 tons per year, with a proportional rise in whey volume. The company cited rising domestic and export demand, noting there was “good evidence” that Chinese consumers were developing a taste for mature cheddar, with consumption also growing in Europe, the U.S. and east Asia. (The Guardian, 5/23/18)

    Saputo paid C$100 million (about US$78 million) for Canadian specialty cheese and yogurt manufacturer Shepherd Gourmet Dairy (Ontario) Inc. Shepherd operates a manufacturing plant in St. Mary’s, Ontario. (Company reports)

    Finland’s Valio opened a head office in Shanghai to oversee new retail and foodservice business units, as well as its existing ingredients business in the region . . . Australian life sciences and health products company Bioxyne signed a distribution agreement with Malaysian sales and marketing company ASVA International to distribute Bioxyne products, including New Zealand-made infant formula, to Cambodia, Mauritius, Myanmar, the Philippines and Thailand. (Company reports) 

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    New Zealand’s Fonterra Co-operative Group signed a partnership agreement with Southeast Asian ecommerce giant Lazada. The deal makes Lazada the exclusive online distributor for a number of Fonterra brands, including Anmum, Fernleaf and Anchor, in Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam. Fonterra also said it hopes to utilize Lazada analytics to better understand consumers in the region and drive new product innovation. (Company reports)

    Nestlé sold a 95 percent stake in its Hulunbuir milk powder plant in northeastern Inner Mongolia to a division of China’s Ningxia Saishang Dairy. Nestlé will retain a 5 percent share in the new joint venture operation called Saishang Nestlé Hulunbuir Ltd. . . . Luxembourg-based JAB Holdings paid $2 billion for British sandwich and coffee chain Pret A Manger. JAB has been building a stable of upscale sandwich and coffee brands, including Panera Bread and Keurig Green Mountain. (Reuters, 5/29/18; TheDairySite, 5/25/18)

    Arla Foods is closing three UK facilities—a Llandyrnog, Wales, cheese manufacturing plant and cheese packing operations at Malpas, England, and Lockerbie, Scotland—as part of a three-year efficiency drive announced earlier this year to eliminate €400 million in costs. Existing facilities will absorb the lost capacity . . . Dean Foods plans to shutter a number of U.S. milk and dairy processing plants, including Meadow Brook Dairy, Erie, Pa.; Garelick Farms, Lynn, Mass.; Prairie Farms Dairy, Fulton, Ky.; the Dean Foods facility in Louisville, Ky.; and a joint Dean/Land O’Lakes plant in Thief River Falls, Minn. (a distribution operation at the site will reportedly remain open). (Company reports; Lancaster Farming, 5/25/18; Red River Farm Network, 5/25/18)

    Arla Foods and Starbucks signed a 21-year strategic agreement granting Arla license to continue to manufacture, distribute and market Starbucks milk-based ready-to-drink (RTD) coffee beverages for Europe, the Middle East and Africa (EMEA). The two companies have been collaborating on the drinks since 2010. Over that time, Starbucks RTD drink business grew an average of 40 percent annually across EMEA. (Company reports)

    France’s Savencia Fromage & Dairy purchased Oregon-based artisan cheesemaker Rogue Creamery . . . Nonprofit regional dairy councils Dairy MAX and Western Dairy Association completed their merger and will now go by the name Dairy MAX . . . Walmart is working on exiting difficult markets and prioritizing growth online. This week, the company sold 80 percent of its stake in its Brazilian operations to private equity firm Advent International Corp. Last month, the retail giant paid $16 billion for a 77 percent share in India’s largest ecommerce company Flipkart Group. (Company reports; Wall Street Journal, 6/4/18)

    Savencia Fromage & Dairy is building a US$33 million cheese factory in Clark, Pampanga, Philippines . . . PT Sarimelati Kencana, owner of the Pizza Hut franchise in Indonesia, plans to open 124 new outlets by 2019. It currently operates 51 stores throughout the country . . . India’s Tamil Nadu Cooperative Milk Producers’ Federation (Aavin) plans to expand into 15 new export markets (mostly in the Middle East, Southeast Asia and Africa) by the end of 2018. It entered its first export market in late 2017, shipping UHT milk to Singapore. (USDEC Southeast Asia office; The Philippine Star, 6/4/18; The New Indian Express, 6/2/18)

    Idaho Milk Products is building a $26-million expansion at its Jerome, Idaho, facility to grow its specialized MPC and dairy ingredients business. The project, which includes new R&D capabilities and additional warehouse space, will expand Idaho Milk Products’ processing capacity by 33 percent or an additional 1 million lbs. of milk per day. The company expects to complete the project by August 2019. (Company reports)

    Germany’s Hochwald, a major exporter of UHT milk, plans to construct a new long-life dairy processing plant in Mechernich, Germany. The company says the facility, which will take 2.5 years to build, is part of its “continuing development to become an international market-oriented specialist of dairy products” . . . General Mills is closing its eight company-owned Häagen-Dazs stores in Brazil to concentrate on retail packaged sales . . . French retail giant Carrefour opened a new $82 million regional distribution center in Dubai. To support regional growth plans, the facility is four times larger than any previous Carrefour distribution center in the Middle East. It currently operates 90 stores in the UAE. (USDEC Middle East office; Company reports; Milkpoint, 6/11/18)

    Canada’s Saputo announced a series of moves to improve efficiency and expand its domestic and international operations. The company sold its processing facility in Burnaby, British Columbia, for C$218 million (about US$164 million) to an unnamed buyer. Much of the proceeds will go toward a new C$240-million (about US$180-million) greenfield plant in Port Coquitlam, British Columbia. Saputo will continue to lease the Burnaby site as the Port Coquitlam plant is constructed over the next three years. Saputo said the new facility will help it better serve the Western Canada market. (Real Agriculture, 6/15/18; Vancouver Free Press, 6/14/18)

    Danone reportedly signed a non-binding agreement to buy a 49.9 percent stake in Yashili New Zealand Dairy Co., a joint venture between China’s Mengniu Dairy and Yashili International. Danone already owns a 25-percent stake in Yashili International . . . Switzerland’s Hochdorf Group sold its Hochdorf Baltic Milk milk protein plant in Medeikiai, Lithuania, to an unnamed investment group. (Company reports; DairyReporter.com, 6/12/18)

    After finding dairy success in Cambodia and Laos, Vietnam’s Vinamilk says it has drawn up a long-term plan to expand operations into Myanmar . . . Lactalis is testing production at its Craon, France, plant, which it shuttered earlier this year after an infant formula recall for potential salmonella contamination. Tower 1 at Craon is permanently shut, but the company is seeking to restart production at Tower 2 . . . Alphabet Inc.’s Google unit invested $550 million in Chinese ecommerce giant JD.com in an effort to expand their retailing presence in Southeast Asia, Europe and the United States. (USDEC Vietnam office; Wall Street Journal, 6/18/18; Reuters, 5/31/18)

    To get a taste of the trends and innovation taking place in foreign markets, here is a selection of new product roll-outs from the second quarter.

    • China’s Mengniu Dairy and Arla Foods launched Arla Pro shredded mozzarella targeting the Chinese foodservice sector, particularly local and small-to-mid-scale pizza outlets. The cheese is made at Mengniu’s Hohhot, Inner Mongolia, plant from imported natural Danish mozzarella.
    • Thailand’s Taokaenoi Food & Marketing, which markets a whey powder drink mix and snack bars under the My Whey brand, introduced a new product called My Whey Pink Diamond—a strawberry-flavored protein powder drink mix specifically targeting female fitness enthusiasts.
    • Abbott launched Similac Eye-Q Plus with HMO (Human Milk Oligosaccharides) in Vietnam. HMOs have been linked to improved infant immunity and digestive health.
    • China’s Yili Group and Tetra Pak teamed up to develop what Tetra Pak calls “the world’s first ambient drinking yogurt with large fruit and cereal pieces.”
    • Arla Foods rolled out a new line of ready-to-drink beverages in the UK called Milk & Oats. The product is a blend of skim milk, wholegrain oats and natural flavors in two varieties: maple and vanilla.
    • Japanese yogurt manufacturer Nippon Luna signed a deal with MS Iceland Dairies to make and market MS Iceland’s Ísey Skyr Icelandic yogurt. Nippon Luna plans to build a new plant to manufacture the line. (USDEC China office; USDEC Southeast Asia office; USDEC Vietnam Office; Company reports)

    New Zealand’s Fonterra established a new unit called Beverage House within its Global Foodservice business. The venture aims to capitalize on dairy beverage trends in Asia, including drinks made with yogurt, topped with cream cheese or mixed with cream. The move is the latest in a series of actions aimed at creating more high-value options for its shareholders’ milk. Last December, Fonterra created a new medical nutrition and “healthy aging” division. Early this year, it announced an NZ$125 million expansion at its cheese plant in Stanhope, Victoria, Australia, that will nearly double capacity to more than 80,000 tons per year. And its NZ$240-million Clandeboye, South Island, New Zealand, mozzarella plant was on track for commissioning this past May. (Company reports)

    A Brazilian court shunted a decision on who owns dairy processor Itambé Alimentos to a private arbitrator. Brazilian dairy processor Vigor Alimentos and Cooperativa Central dos Produtores Rurais de Minas Gerais (CCPR) owned Itambé when Mexico’s Grupo Lala purchased Vigor last year. Grupo Lala expected to acquire all or part of Itambé in the process, but CCPR exercised its first right of refusal to purchase Vigor’s shares, then quickly turned around and sold Itambé to French dairy processor Lactalis. Lala alleges that the CCPR’s move broke the former shareholders agreement in Itambé, and the case has been dragging on for months. An arbitrator at the Brazil-Canada Chamber of Commerce will now decide the outcome. (Reuters, 6/25/18)

    Japanese conglomerate Mitsui Group is rumored to be one of the suitors for Irish dairy processor LacPatrick. Irish dairy co-ops Lakeland Dairies and Aurivo and Northern Ireland’s Dale Farm have also expressed interest in LacPatrick . . . Goodman Fielder New Zealand is looking to buy the rights to make and market Yoplait yogurt in New Zealand. The company is seeking Commerce Commission clearance to acquire manufacturing and distribution assets related to the Yoplait brand from Lion-Dairy & Drinks (NZ) as well as an exclusive license to the Yoplait brand from its owner France’s Sodima . . . Australian high-end food company Longtable Group paid A$15 million for Australian artisan creamery St David Dairy. (Agriland, 6/23/18, 6/22/18; BusinessDesk, 6/22/18; Stockhead, 6/21/18)

    New Zealand’s Synlait Milk named Leon Clement as its new CEO effective mid-August when current chief John Penno steps down. Clement most recently served as managing director of Fonterra Brands New Zealand . . . Synlait expects to commission its NZ$250-million Pokeno, North Island, nutritional powder plant for the 2019/20 season. Its capacity is 45,000 tons per year . . . Australian formula marketer Bellamy’s Organic signed two deals to increase its organic milk supply to meet rising domestic and export demand. The company inked supply agreements with Fonterra Australia and an affiliate of Australian Consolidated Milk . . . Vietnam’s Vinamilk plans to partner with Hau Giang Pharmaceutical to develop functional and nutritional food products tailored to Vietnamese tastes . . . Peruvian dairy processor Lacteos Gloria plans to launch its Gloria brand in Colombia over the few months. It will be the fourth and largest brand Gloria markets in its neighbor. (USDEC Vietnam office; Company reports; Dairy Markets, 6/26/18; DairyReporter.com, 6/22/18; Reuters, 6/20/18)

    July-2

    MS Iceland Dairies has signed a production and branding agreement for its Isey Skyr yogurt product with Nippon Luna, a Japanese dairy company owned by meat giant and fresh and frozen food business Nippon Ham. It will involve a new production facility being built in Japan, paving the way for Isey Skyr’s entry into the Japanese market … German supermarket chain Lidl has awarded UK dairy cooperative Dale Farm a lead contract to supply cheddar cheese to its stores across the UK, Europe and the United States … Saudia Dairy & Foodstuff Co. (SADAFCO) has acquired a 76 percent stake in Poland’s Mlekoma and its subsidiaries Foodexo and Milekoma Dairy … New Zealand milk processor Synlait has reportedly extended a supply agreement with the a2Milk Company for a minimum of five years. (just-food, 6/26/18; Dairy Reporter, 6/22/18, argaam, 07/02/18; FoodBev Media, 7/03/18)

    New Zealand’s Synlait has announced a series of “bold targets” for reducing its environmental impact, including a 35 percent reduction in greenhouse gas emissions, a 20 percent cut in water usage and a 45 percent reduction in nitrogen loss on farm. The company is increasing the premiums paid to farmers who subscribe to its environmental best practice program, called Lead With Pride … Dutch dairy company FrieslandCampina, has introduced new cheese products under the Frico brand which cover a wide range of Gouda, Edam, Maasdam, Goat Cheese and other Dutch cheese offerings … Also, FrieslandCampina’s ingredients business, Kievit, has expended its range of dairy-based fat powders with two new additions: butter-based Vana-Lata BB75B and cream-based Vana-Lata CB72B. These will enable Kievit’s customers “to adapt to global food trends as well as specific bakery and savory trends,” the firm said … UK dairy nutrition company Volac will invest €3.3 million (about US$3.8 million) to build a new facility in Meath, Ireland, for producing milk replacers … HP Hood has completed a $36 million expansion that the company says will create 25 new jobs at its milk processing facility in Oneida, N.Y. The expansion includes the installation of an additional milk production line, cold storage, food security and expanded facility capacity … China dairy company Beingmate has appointed Bao Xiufeil as its new general manager. He comes from the Chinese unit of the Netherlands' FrieslandCampina. (FoodBev Media, 6/26/18, 6/28/18, 07/02/18; PerishableNews.com, 6/29/18; Irish Farmers Journal, 6/29/18; The (Syracuse) Post-Standard, 6/26/18)

    New Zealand’s Fonterra is commissioning a new butter line at its Edgecumbe, North Island, manufacturing plant in part to take advantage of a new product trend in China called Zang Zang Bao, also known as “Muddy Buns” or “Dirty Buns.” The buns, similar to chocolate-covered croissants, have been a hit at Chinese bakeries with customers lining up to buy them. The new production line, expected to start up by September 1, produces butter in 1 kg sheets, an easier form for bakers to work with. The project will nearly double Edgecumbe’s butter capacity from 4,500 to 7,000 metric tons.

    Shanghai Ground Foods signed a cooperation agreement with Australia’s Brownes Dairy. The Chinese dairy manufacturer will act as Brownes’ exclusive agent in China and will also purchase Brownes cheddar cheese and cream for its processed cheese operations. Shanghai Ground operates three plants (in Shanghai, Changchun and Tianjin) with a fourth under construction in Jilin. The Shanghai plan—a former Danone facility—makes processed cheese for retail; the Tianjin site makes processed shredded mozzarella. (USDEC China office)

    France’s Lactalis acquired a majority stake in Lebanese distributor Hanilor, which also operates in Iraq, Jordan and Syria . . . Switzerland’s Emmi increased its stake in Dutch goat and sheep’s milk trader AVH from 75 percent to 90 percent . . . Japanese beverage firm Kirin Holdings and trading house Mitsui & Co. acquired an 80 percent stake in U.S. health supplement company Thorne Research Inc. Thorne sells products primarily through medical professionals and is considering providing a personalized nutrition service in Japan and other parts of Asia. (USDEC Japan office; USDEC Middle East office; Company reports)

    Yum! Brands Taco Bell unit signed franchise deals with Brazil’s Sforza Holding Group and Spain’s Casual Brands Group. The deals call for more than 400 Taco Bell stores (in both countries combined) over the next 10 years. (Nation’s Restaurant News, 6/28/18)

    Glanbia Cheese, the joint venture between Glanbia plc and Leprino Foods, plans to build a €130-million mozzarella plant (about US$152 million) in Portlaoise, Ireland. The facility will produce 45,000 tons per year, mainly to serve rising demand in European markets. Assuming the project receives planning commission approval, Glanbia Cheese expects to begin construction later this year with the first mozzarella rolling off the line in 2020. (Company reports)

    Australia’s Bega Cheese paid A$250 million (about US$214 million) for Saputo’s Koroit, Victoria, manufacturing plant. Saputo agreed to sell the facility as a condition for its buyout of Murray Goulburn Co-operative’s assets earlier this year . . . Fraser & Neave, through its F&N Dairy Investments arm, purchased another 1 percent of Vietnam’s Vinamilk, pushing its total share of the dairy processor to 21 percent. (USDEC Southeast Asia office; Company reports)

    Indian dairy processor Kwality is reportedly shuttering its sales and marketing operations in Dubai due to the prolonged slump in SMP prices and low AMF prices . . . France’s Bel Group is building a C$87-million factory (about US$66 million) in Sorel-Tracy, Quebec, to produce Mini Babybel cheese snacks . . . Point Reyes Farmstead Cheese completed an $8-million expansion at its Petaluma, Calif., manufacturing plant. (Arabian Business, 7/19/18; The Press Democrat, 7/15/18; Financial Post, 7/13/18)

    USDEC member Darigold Inc. is significantly expanding its overseas sales, service and distribution network to bolster its customer service capabilities and demonstrate its long-term commitment to international markets. With existing offices in Mexico City, Singapore and Shanghai, the company plans to add more sites “soon” as part of its effort to offer “deeper product customization capabilities with solutions tailored for customer and country-specific needs.” Darigold projects the expanded in-house network will help it double the number of countries it serves to 40 or more and lift its export volume from the current level of around 40 percent of the milk it collects to more than half of the milk it collects. (Company reports)

    For the second year in a row, no companies joined or exited Rabobank’s list of the largest dairy processors in the world (as ranked by dairy turnover). The biggest move was Schreiber Foods falling three places from No. 17 to No. 20. In the top 10, Lactalis ($19.9 billion) leapfrogged Danone ($17.6 billion) to claim the No. 2 spot, Fonterra ($13.7 billion) jumped FrieslandCampina ($13.6 billion) to move up to No. 5, and Saputo ($10.8 billion) climbed over Yili Group ($9.9 billion) to reach No. 8. Nestlé remained securely in the top spot with turnover of US$24.2 billion. Dairy Farmers of America was the highest-ranked U.S. company at No. 4 ($14.7 billion). (Rabobank)

    Walmart de Mexico purchased the Costa Rican retail chains owned by Grupo Empresarial de Supermercados (GESSA). These include the Perimercados, Supercompro and Saretto stores. (USDEC Mexico office)

    Land O’Lakes named Beth Ford, currently the company’s chief operating officer, as its new president and CEO, replacing Chris Policinski, who retired in June . . . DuPont Nutrition & Health opened a new Innovation & Application Center in Japan’s Kanagawa Prefecture to increase face-to-face interaction with customers in the region. The facility includes a dairy area for yogurt, fermented drinks, beverages and ice cream . . . Philippines restaurant chain Shakey’s Pizza Asia Venture opened its first unit in the Middle East in Dubai through franchisee Aljeel Capital. Aljeel plans to open 10 more stores in the region over the next five years, while Shakey’s expects to open 20 more Philippine outlets by 2020 . . . Dairy Farmers of America is shuttering its Hughson, Calif., dairy plant due to changing market conditions. The facility makes condensed milk, cream and milk powder. (USDEC Southeast Asia office; Company reports) 

     August-2

    Mexican dairy giant Grupo Lala purchased Brazilian dairy processor Vigor Alimentos for a reported 5.7 billion reals (about US$1.8 billion). The deal includes Vigor’s 50 percent stake in Brazilian dairy processor Itambé Alimentos.Lala has aggressively expanded its business outside of Mexico over the past two years via acquisition and plant construction. The Vigor purchase is its biggest step to date to bolster its regional position. (Wall Street Journal, 8/1/17; Milkpoint, 8/1/17)

    Fonterra confirmed it is in talks to acquire troubled Argentine dairy co-op SanCor  . . . Starbucks bought out its eastern China joint-venture partner Uni-President, calling the transaction a demonstration of the company’s confidence in the growth potential of the Chinese market. Starbucks operates about 2,800 stores in mainland China and plans to have 5,000 by 2021 . . . Chinese dairy processor Beijing Sanyuan Foods and investment firm Fosun Group plan to acquire a controlling stake in French spreads specialist St Hubert SAS . . . Switzerland’s Emmi sold its 24 percent share of Italian fresh cheesemaker Venchiaredo to Italy’s Granarolo . . . Japan’s Otsuka Pharmaceutical Co. paid C$405 million (about US$324 million) for Daiya Foods, a Canadian manufacturer of plant-based dairy alternatives. (USDEC China office; Company reports; New Zealand Herald, 7/27/17)

    Pegah Iran Dairy Industries opened what it says is the largest dairy powder factory in Iran. The plant can handle 180 tons of raw milk per day. The company, which operates 17 production facilities throughout the country, is also building a 2,000-cow farm complex to supply its operations . . . Dubai-based private investment firm AlJeel Capital plans to open 10 Shakey’s Pizza outlets in the UAE . . . Australian pizza restaurant 400 Gradi signed a franchise deal with Kuwait-based foodservice operator M.H. Alshaya to develop the brand in the Middle East . . . Australia’s ViPlus Dairy plans to double nutritional milk powder packaging capacity to 16,000 tons per year over the next 12 months. The company exports about 80 percent of its products to China, but is looking to expand in Africa and the Middle East. It contracts with Australian processors including Burra Foods and Fonterra for its ingredients . . . Mondelez International appointed Dirk Van de Put, CEO of Canada’s McCain Foods, to replace CEO Irene Rosenfeld when she retires in November. (USDEC Middle East office; Reuters, 8/2/17; The Weekly Times, 8/1/17; DairyReporter.com, 7/28/17)

    Two companies rolled out A2 milk while a third announced a plan to start producing A2 milk powder:

    • Australian retailer AuMake International plans to contract with New Zealand’s Pure Nutrition to manufacture A2 milk powder. AuMake operates a retail network aimed at “daigou”—shoppers who purchase products in other countries for customers in mainland China to minimize import duties. The deal calls for Pure Nutrition to manufacture 1 million tins of A2 powder (as well as 600,000 tins of A1 powder) for AuMake by mid-spring 2019.
    • In Vietnam, Vinamilk and TH True Milk have both invested in A2 cows. Vinamilk is further along, already processing UHT and pasteurized products from a 200-head herd of imported New Zealand cattle. TH Milk is developing a homegrown herd of 500 A2 cows and expects to launch A2 products in the near future.
    • Fonterra Co-operative Group launched pasteurized A2 milk in New Zealand under its Anchor brand. The company announced a major A2 initiative in February, and the domestic Anchor product is the first in a line that Fonterra says will grow over time. (USDEC Vietnam office; Reuters, 8/7/18; Dairy Markets, 8/3/18; The Country, 7/27/18)

    Fonterra formed a joint venture with Indian fast-moving consumer goods company Future Consumer that will provide the New Zealand dairy export giant an entrée to one of the fastest-growing dairy markets in the world. Fonterra Future Dairy Partners plans to develop and launch its first consumer products by the middle of 2019, made with both locally sourced milk and imported dairy ingredients from New Zealand. Fonterra claims Indian dairy demand will increase by 85 million tons over the next seven years—seven times its forecast growth for China. Future Consumer is a vertically integrated food company involved in all aspects of the food chain, from sourcing to processing to distribution to retailing. It plans to open 1,100 new-concept retail stores this year that offer a “complete digital experience” in-store and online. (Company reports)

    Glanbia Nutritionals, Dairy Farmers of America and Select Milk Producers Inc. have chosen St. Johns, Mich., as the site for their large-scale, joint-venture cheese and whey manufacturing facility. The partners expect to commission the $470-million plant in the fourth quarter of 2020. It will produce 136,000 tons of cheese per year and whey products for domestic and international markets. Proliant Dairy Ingredients is investing $85 million to build an adjoining plant to process the whey permeate from the joint venture. (Company reports)

    Mexican dairy giant Grupo Lala is reportedly close to opening its new $30-million dairy plant in Palín, Guatemala. The plant will produce UHT milk, ice cream and other products. A second Costa Rica plant is slated for completion in the fourth quarter. The company named former Anheuser-Busch InBev executive Mauricio Leyva as its new CEO effective Sept. 1. (Company reports; Dairy Markets, 8/6/18)

    China’s Yili Group is looking to buy a 51 percent stake in Pakistan’s Fauji Foods, a dairy, juice and jam processor . . . Switzerland’s Emmi increased its stake in cheese distributor Emmi Ambrosi France from 51 percent to 85 percent. Emmi and Italian cheesemaker Ambrosi formed the company by merging their French operations in 2008 . . . Hindustan Unilever acquired the Adityaa ice cream brand and distribution assets from Indian dairy processor Vijaykant Dairy and Food Products(Company reports; Economic Times, 8/6/18; South China Morning Post, 8/2/18)

    New Zealand’s Ebert Construction filed for bankruptcy last week, raising questions about the timelines for three major dairy plants it was building. Mataura Valley Milk said construction on its NZ$240-million infant formula facility near Gore on the South Island is nearly complete and shouldn’t be affected by the bankruptcy. But construction on Synlait’s NZ$250-million nutritional powder facility in Pokeno had only recently begun. The North Island facility was scheduled for commissioning for the 2019-20 season. A liquid milk packaging facility at Synlait’s Dunsandel, South Island, site was supposed to be commissioned early next year as well. Tetra Pak Oceania is overseeing both projects and had subcontracted with Ebert. It said it still expects to complete both facilities by the original dates. (Company reports; NZFarmer.co.nz, 8/2/18; The Southland Times, 8/1/18)

    Nestlé’s Dominican Republic business inaugurated a new 12,000-container-per-hour UHT dairy drinks line at its facility in San Francisco de Marcorís. The company says the new line will service Caribbean export markets in addition to domestic sales . . . Romanian dairy processor Olympus is investing €20 million (about US$23 million) to expand yogurt processing at its facility in Halchiu . . . DKSH Cambodia signed a deal to market and distribute Abevia and Abevia Gold brand evaporated creamers from Southeast Asian dairy and fruit beverage company Nutridor(Company news; TheDairySite, 7/31/18)

    Starbucks and Ikea are the latest companies to jump on the plant-based bandwagon. Starbucks is using pea and brown rice protein in a new drink calledProtein Blended Cold Brew in almond and cacao flavors and offering shots of the protein as an addition to its other drinks. For Starbucks, the move is an extension of a long-term expansion into plant-based products: It has offered almond, soy and coconut “milk” options for years. With the threat from plant-based proteins in mind, USDEC recently completed a broad research study on alternative proteins The 229-page report “Emerging Protein Ingredients: Facts, Threats and Opportunities Defined” provides analysis of and comparisons between dairy and alternative proteins and actions U.S. suppliers should consider to grow their exports. (USDEC Southeast Asia office; USA Today, 8/14/18; Live Kindly, 8/6/18)

    Fonterra Co-operative Group named Miles Hurrell as interim CEO effective immediately. Hurrell, an 18-year veteran of Fonterra, is COO of Farm Source, where he was responsible for the co-op’s global farming strategy, farmer engagement and 70 Farm Source retail stores. (Company reports)

    The reported deal to transfer control of troubled Argentine dairy processor SanCor to a new subsidiary of Argentine agribusiness company Adecoagro might not take place after all. Media reports contend Adecoagro is only interested in buying two SanCor plants rather than taking over the entire operation. While a deal is still on the table, SanCor has begun informal talks with other potential suitors. New Zealand’s Fonterra was previously rumored to be interested in the co-op. Separately, SanCor announced it was halting production of milk powder sachets due to unprofitability. It also launched what it says is the first zero-lactose milk in Argentina. (USDEC South America office)

    The European Bank for Reconstruction and Development (EBRD) granted a $44 million loan to Egyptian dairy and juice processor International Company for Agricultural Industries Projects (Beyti). The money will go to refinancing an existing loan and fund expansion projects. Beyti is co-owned by Saudi Arabia’s Almarai and PepsiCo . . . South Korean food and dairy processor Dongwon F&B and Thailand’s largest food company Charoen Pokphand Foods (CPF) signed a partnership deal to expand imports and exports to the mutual benefit of both companies. CPF operates Thailand’s largest food distribution network and exports to more than 30 countries . . . A2 Milk renewed its distribution agreement with China State Farm Holding Shanghai (CSFA) through early December 2021. CSFA has been A2’s exclusive import agent since the brand launched in China in 2014 . . . Coca-Cola took a minority stake in Chinese yogurt start-up Le Chun. Founded in 2014, Le Chun initially found success in digital marketing, but has since expanded to high-end foodservice and retail stores in 1st and 2nd tier cities . . . Mengniu Dairy extended its strategic cooperation agreement with e-commerce giant Alibaba. Mengniu sales on Alibaba’s Tmall platform have nearly doubled since the two signed their original deal in August 2017. (USDEC Southeast Asia office; USDEC China office; Company reports; EBRD)

    Darigold added some detail to its previously announced plan to deepen investment in export sales. The company told the Seattle Times that despite rising trade tensions it expects to spend $100 million to upgrade its flagship plant and new sale offices in Mexico and Asia to target the growing global middle class. “We simply have kept the faith that world trade is essential for the global food system to work, and that dairy and our location here in the Pacific Northwest . . . is going to be a natural spot for it,” Darigold CEO Stan Ryan told the paper. To read the full article, click here.

    Brazilian dairy manufacturer Lacticínios Porto Alegre is building a $20-million cheese plant in Patos de Minas, Minas Gerais. The plant, slated for completion in 2020, will handle around 500 tons of raw milk per day and produce mozzarella, prato and parmesan cheese as well as whey powder. (USDEC South America office)

    Dutch dairy giant FrieslandCampina acquired Best Cheese Holland and its brands, including Parrano grated, flake and powder cheeses and Tjiezi snack cheese. The deal includes the import and sales activity of Best Cheese in the United States. (Company reports)

    Vietnam’s Vinamilk is investing US$171 million to build a 15,000-acre dairy farm complex and processing facility in the Mekong Delta . . . Mataura Valley Milk began receiving milk at its new NZ$240-million nutritional powder plant at Gore, on New Zealand’s South Island. The facility will initially produce SMP and WMP, with the first nutritional formula set for production in February 2019 . . . Canadian coffee shop Tim Hortons, part of Restaurant Brands International, plans to open 1,500 units in Asia over the next decade. The first China outlet is slated for 2019 . . . Archer Daniels Midland opened a new regional office and flavor and ingredient innovation center in Shanghai. (USDEC Southeast Asia office; Informa, 8/21/18; New Zealand Herald, 8/20/18; The Canadian Press, 8/17/18)

    Milk Specialties Global is expanding its Fond du Lac, Wis., manufacturing plant to increase sweet whey powder (SWP) output. The project will boost production by 40 percent or about another 10,000 tons. The company says the expansion will support its calf milk replacer business as well as growing U.S. and international customers in the food and feed nutrition markets. (Company reports)

    New Zealand’s Fonterra Co-operative Group started production at its new cream cheese plant at Darfield on the South Island. The project adds 24,000 tons of cream cheese capacity, primarily to meet rising demand in China. A second line at Darfield will boost cream cheese output by another 24,000 tons when it is completed in 2019-20. (Company reports; FoodBev.com, 8/27/18)

    French dairy co-op Sodiaal is in talks to purchase the processing portion of an infant formula plant in Carhaix, France, owned by Synutra International. Synutra would continue to operate the packaging facility at Carhaix. Sodiaal said the deal would enable it “to speed up development on the growing baby milk market in China and other global markets.” (Reuters, 8/29/18)

    Arla Foods is building a 97,000-sq.-ft. innovation center in Nr. Vium, Denmark, focused on exploring the use of milk and whey components to increase the nutritional or functional value of foods and beverages. The facility, due to open in 2021, will be part of Arla subsidiary Arla Foods Ingredients. (Company reports)

    Campbell’s Soup plans to sell its international and fresh foods businesses, including brands that utilize dairy ingredients like Bolthouse Farms, to pay down debt . . . South African seafood firm Sea Harvest paid $108 million to buy South African cheese, butter and powder firm Ladismith Cheese. It is the company’s first venture into the dairy sector. (CNBC, 8/30/18; Business Insider SA, 8/28/18)

    Arby’s Restaurant Group signed an agreement with South Korean franchisee S. Fresh Co. to open 100 locations in South Korea starting in 2019. The deal marks Arby’s biggest Asian expansion to date . . . Gabriel D’Arcy, CEO of troubled Irish co-op LacPatrick Dairies, resigned. Sean Brady was named interim leader. LacPatrick members are expected to vote on a merger with rival Lakeland Dairies within the next month. (Irish Independent, 8/29/18; Atlanta Business Chronicle, 8/22/18)

    September-2

    Because of the severe drought that has gripped much of Europe this summer, Arla Foods has developed a proposal to pay out its entire 2018 net profit of up to €310 million (US$363 million) to members. The firm traditionally pays only a part of its profit to farmer-owners. Last year, the company paid out €127 million to its members out of a net profit of €321 million. The proposal will be discussed at the next board of representatives meeting in October. (Reuters, 8/30/18; Dairy Reporter, 8/30/18)

    New Zealand’s a2 Milk Company has secured exclusive distribution of a three-pack a2 Milk whole milk to Costco stores across the southeastern United States. In addition to Costco, consumers can now find a2 Milk (touted for its A2 protein type) at more than 6,000 retail outlets in the U.S. including at major grocers, including Wegmans, Stop & Shop, Giant Carlisle, Giant Landover, Whole Foods Market, Market Basket, Sprouts, Safeway, King Soopers, Target, Ralphs, Publix, ShopRite and The Fresh Market. The a2 Milk Company made its Walmart debut this summer. (Business Wire, 9/4/18; Dairy Reporter, 8/23/18)

    South Korea’s Yakult Honsha Co. got a publicity boost when its drinkable yogurt was seen in a popular Netflix romantic comedy. Viewers of “To All the Boys I’ve Loved Before” noticed the main character’s sister drinking yogurt from a bottle that has Yakult’s distinctive red top foil. People are talking about it on Twitter. Besides a boost in brand awareness, Yakult’s stock price has risen about 2.7 percent since the movie was released on August 17. (Bloomberg, 9/3/18)

    Finnish dairy company Valio has announced that two of its cooperatives, Osuuskunta ItäMaito and Osuuskunta Maitosuomi plan to merge … Singapore-based Dymon Asia Private Equity has invested an undisclosed amount in Malaysian dairy firm, The Holstein Milk Company. (Just-Food.com, 8/31/18; DealStreetAsia, 9/3/18)

    South Korea’s Namyang Dairy’s products are now available on the shelves of Chinese wholesale marketer Herma Shenzu, part of the Alibaba Group … New Zealand dairy cooperative Fonterra has expanded its Protein+ range of milk products to include vanilla, chocolate and mixed berry flavors with 20 grams of protein and no added sugar … Fonterra’s new plant in Canterbury, New Zealand, has started production and will manufacture up to 24,000 metric tons of cream cheese annually for the Chinese market … Canadian dairy processor COWS Creamery will receive up to CA$2.6 million (US$1.99 million) in funding from the Canadian government. The funding will be used to expand the company’s creamery

    French dairy giant Lactalis purchased the infant formula business of South Africa’s Aspen Pharmacare Holdings . . . India’s Kaira District Cooperative Milk Producers Union Ltd. is reportedly in the market for a dairy plant in Wisconsin . . . Malaysia’s Holstein Milk Co. paid US$20 million for a 1,500-acre farm and 2,000 dairy cows near Melbourne, Australia, to supply a milk processing plant it purchased in Melbourne earlier this year. The company says the milk produced there would be sent back to Malaysia for domestic distribution and re-export . . . Japan’s Kirin Holdings is launching a strategic review of its Australian and New Zealand dairy business Lion-Dairy and Drinks, with an eye toward a potential sale . . . The European Bank of Reconstruction and Development paid $42 million for a 9 percent stake in vertically-integrated Lithuanian organic food and dairy producer Auga Group . . . Dutch health-oriented food processor Wessanen Nederland acquired Dutch plant-based yogurt and frozen dessert maker Abbot Kinney’s. (USDEC Southeast Asia office; Company reports; Bloomberg, 9/13/18; Times of India, 9/12/18; Financial Times, 9/10/18)

    Russian dairy company Karat says it is building a $57-million processed cheese factory in Tolyatti, Samara Oblast, southeast of Moscow . . . Ireland’s Lakeland Dairies officially opened a new $6.5-million automated packing facility at its dairy processing site in Newtownards, Northern Ireland. (The Dairy News, 9/10/18; Agriland, 9/5/18)

    French authorities gave Lactalis the green light to start selling infant formula produced at the company’s plant in Craon, France. The facility was temporarily shuttered earlier this year after a salmonella incident. Lactalis has been testing one of the Craon production lines for the past three months under supervision of French health authorities. The line linked to the salmonella-tainted product was closed permanently. (Reuters, 9/18/18)

    Fonterra Co-operative Group is re-evaluating all investments, major assets and partnerships starting with a strategic review of its stake in China’s Beingmate. For the 2017/18 year, Fonterra posted its first annual loss since the company formed in 2001, and its debt-to-equity ratio grew to an uncomfortable level. An NZ$232-million payment to Danone and an NZ$439-million write down of its Beingmate investment (combined, equal to about US$442 million) were a large reason why. The company says it needs to reduce its debt by NZ$800 million (about US$527 million). (Company reports; Newsroom.co.nz, 9/13/18)

    Vietnam’s NutiFood Corp. and Sweden real estate firm Backahill signed a memorandum of understanding to create a 50/50 joint venture to produce and market dairy and organic foods in Sweden to European and Asian markets . . . New Zealand’s Synlait Milk acquired Kiwi cheesemaker Talbot Forest Cheese. The buyout, rumored at NZ$30-$40 million, includes a 12,000-ton/year manufacturing plant in Temuka on the South Island. The deal marks Synlait’s debut in cheese. USDEC Vietnam office; Stuff.co.nz, 9/19/18)

    The Dairy Farmers of America Garden City, Kan., manufacturing plant sustained close to $1 million in damages last week after a fire in its dryer area . . . Chinese tea chain TaiGai plans to open seven stores in Singapore by the end of 2019. TaiGai specializes in tea topped with a foam made of milk and cheese. (USDEC Southeast Asia office; Garden City Telegram, 9/13/18)

    FrieslandCampina is investing €23 million (about US$27 million) to expand FrieslandCampina WAMCO’s evaporated and ready-to-drink milk plant in Nigeria . . . Canada’s Agropur Cooperative will close its Saint-Damase, Quebec, soft cheese plant effective April 2019. Manufacturing and conversion operations will be transferred to other facilities. The co-op said the plant needed major investments, plus it had been unable to work out a labor contract with the facility’s employees . . . Sri Lanka’s Pelwatte Dairy Industries commissioned a new milk powder plant at its Buttala factory. The company did not provide details on volumes but did say the facility as a whole can now handle 310 tons of raw milk per day. (Company reports; Dairy Markets, 9/24/18; TheDairySite, 9/20/18)

    October-2

    Wisconsin-based Foremost Farms USA and Denmark’s Arla Foods are in advanced discussions about forming a strategic partnership. The companies said they expect such a partnership would “increase the value of whey through innovation, by combining Foremost Farms’ high-quality whey with Arla Foods’ extensive ingredient know-how and strong sales channels.” (Company reports)

    Dairy Farmers of America (DFA) remained solidly at the top of IFCN’s list of the top 20 milk processors in the world as ranked by milk intake. In fact, there was no movement in the top six places—DFA, Fonterra Co-operative Group, Lactalis, Arla Foods, Nestlé and FrieslandCampina—since IFCN’s last ranking in 2016 (the group produces the list every two years). Making significant moves up the list were Canada’s Saputo (which went from No. 9 in 2016 to No. 7, propelled by its takeover of Australia’s Murray Goulburn Cooperative); India’s Gujarat Cooperative Milk Marketing Federation (Amul, which jumped from 13 to 9 based in part on a change in the formula IFCN uses to standardize milk intake volumes); and China’s Mengniu Dairy (which rose from No. 18 to No. 15). Land O’Lakes (No. 17 in 2016) fell off this year’s list, making way for France’s Savencia Fromage & Dairy to squeak in at No. 20. For the complete listing from IFCN, with estimated milk intake and turnover, click here.

    Irish co-ops Lakeland Dairies and LacPatrick Dairies agreed to merger terms, and the boards of both companies recommended that shareholders approve the deal at votes scheduled for Oct. 23. The combined entity will take the name Lakeland Dairies. It will be the second largest dairy processor on the island behind Glanbia. Current Lakeland CEO Michael Hanley will run the operation. (Irish Independent, 10/4/18; Agriland, 10/3/18)

    A group of about 200 dairy farmers in Chile are reportedly threatening to stop supplying Fonterra-controlled dairy processor Prolesur. In a push to convert to pasture-only farming, Prolesur has been phasing out winter bonus payments, angering its suppliers who claim they are being underpaid. The disgruntled farmers have threatened to form their own co-op. Prolesur’s milk intake is already down 24 percent over the first seven months of 2018 (compared to the previous year). The move to all-pasture-based milk, the company says, is more sustainable and profitable. (Economía y Negocios, 10/2/18; NZFarmer.co.nz, 9/24/18)

    FrieslandCampina Kievit opened a new innovation kitchen in the Philippines. The facility, located at the company’s creamer facility in Manila, will assist beverage manufacturers in the Asia-Pacific region with product development . . . A&W Food Services of Canada replaced all processed cheese at its 930 outlets with natural cheddar as part of a “clean label” drive . . . Georges Schorderet, CEO of Saudi Arabian dairy giant Almarai, will step down at the end of the year. Former Nestlé executive Alois Hofbauer will replace him. (USDEC Southeast Asia office; Company reports; Gulf Business, 10/4/18; DairyReporter.com, 10/3/18)

    Ireland’s Glanbia plc paid $350 million for U.S.-based weight management and health and wellness brand SlimFast and other related labels like Healthy Delights and Nu-Therapy. Glanbia said SlimFast “plays to global consumer trends focused on convenient formats and snacking” and will complement the other products in its Performance Nutrition business. The brands were owned collectively by KSF Holdings and HNS Intermediate Corp. (Company reports)

    Nestlé is reshaping its Southeast Asian operations. The company sold its Malaysian chilled dairy business and production site (including milk powder packaging) in Petaling Jaya, Malaysia, to France-based Lactalis for 155 million Malaysian ringgits (about US$40 million). The deal includes Nestlé’s chilled dairy distribution, marketing and sales in Malaysia, Singapore and Brunei. Lactalis plans to establish Malaysia as the hub of its Southeast Asia dairy business. Nestlé signed a non-compete clause for five years starting Jan. 1, 2019. Nestlé then announced a plan to take $24 million from that sale and expand its Chembong, Malaysia, manufacturing plant. The expansion will make Chembong Nestlé’s largest single site for making Milo brand chocolate malt beverages. Nestlé said it needs the additional capacity to meet rising domestic and export demand for Milo products. The company also sold its stake in Nestlé Indofood Citarasa Indonesia (NICI) to its joint venture partner Indofood CBP Sukses Makmur. NICI, which deals in cooking ingredients, will become a subsidiary of Indofood. (USDEC Southeast Asia office; The Edge Markets, 10/9/18; New Straits Times, 10/9/18)

    Burger King is seeking partners in Sub-Saharan Africa to expand in Nigeria and other countries where it is “significantly under penetrated.” David Schwartz, head of parent company Restaurant Brands International, called Africa a “huge opportunity.” Through a partnership with French airline catering and service business Servair, Burger King moved into Kenya and Ivory Coast over the past two years. Globally, Burger King is currently adding 2-3 stores per day (mostly in Asia and Europe) in an effort to grow its international presence. (Financial Times, 10/9/18)

    After conducting a strategic review of its business, Japan’s Kirin Holdings has decided to sell the dairy portion of its Australian Lion-Dairy and Drinks business. (Business Insider, 10/10/18)

    Michigan Milk Producers Association (MMPA) is adding a 7,500-sq.-ft., $24-million expansion to its Constantine, Mich., manufacturing plant. The company says the project will increase the site’s milk-handling capacity by 1.3 million lbs. per day and allow MMPA to make new value-added products . . . French prosecutors are deepening their investigation into Lactalis related to last year’s infant formula salmonella scandal. Following a preliminary inquiry launched last December, prosecutors have now opened a probe into possible deceit, failure by a food company to withdraw a product and unintended injury . . . Britain’s Dairy Partners is adding 75,000-sq-ft. and three production lines to its cheese plant in Stroud, Gloucestershire. The project is part of a £25-million (about US$33-million) plan to double output of mozzarella and pizza cheese . . . Russian agriculture group AgriVolga plans to build a pharmaceutical-grade lactose plant in Russia’s Uglich district, Yaroslavl oblast, north of Moscow. The plant would be part of a broader plan announced earlier this year to make Uglich a national center for cheesemaking in cooperation with Russian conglomerate Agranta Group. (Company reports; Gloucestershire Live, 10/9/18; Reuters, 10/9/18; The Dairy News, 10/8/18; Cheese Market News, 10/5/18; MiBiz, 10/3/18)

    Denmark-based Arla Foods signed a partnership agreement with Bangladeshi dairy cooperative MilkVita. Arla expects the deal will give it a better understanding of Bangladesh’s dairy market and help the company develop products targeted specifically to consumer needs. MilkVita plans to capitalize on Arla’s dairy expertise to increase members’ yields, improve quality standards and develop sustainable dairy farming practices. (Company reports)

    At least two major dairy processors are interested in buying Kirin Holdings’ Lion-Dairy & Drinks business in Australia. Bloomberg reports China’s Yili Industrial Group and Canada’s Saputo have spoken with investment banks about potential offers. Other companies, including Australia’s Coca-Cola Amatil, are also reportedly interested. Kirin has asked for the first round of bids by late November. (Bloomberg, 10/22/18)

    Shareholders at Lakeland Dairies and LacPatrick Dairies voted overwhelmingly to approve a merger between the two Irish co-ops. The combined operation—Lakeland Dairies Co-operative Society—will be the No. 2 dairy processor in Ireland, handling nearly 2 million tons of milk per year . . . South African dairy processor Clover Industries reports that it is in takeover talks with an unnamed suitor . . . São Paulo-based dairy processor Mococa S.A. Produtos Alimenticios purchased milk processor Laticinio Murici, operating in the Brazilian state of Alagoas. Mococa is spending US$3 million to upgrade and expand the plant in Murici to manufacture cream, condensed milk and other products. (Agriland, 10/23/18; Reuters, 10/19/18; Milkpoint, 10/18/18)

    French dairy processor Savencia Fromage & Dairy is reportedly building a 12,000-ton/year cheese plant in the Republic of Bashkortostan in Russia . . . Upscale burger chain Shake Shack signed a franchise agreement with Mexican hospitality company Grupo Toks to open 30 units in Mexico by 2028, starting with a Mexico City outlet in 2019. Shake Shack will also make its mainland China debut in 2019 . . . Starbucks granted Latin American franchisee Alsea rights to open and operate Starbucks stores in Belgium, France, Luxembourg and the Netherlands. Starbucks considers its current penetration in those four markets as relatively limited. Mexico’s Alsea already has a foothold in Europe, operating Burger King and Domino’s Pizza units in Spain. (Seattle Times, 10/18/18; Eater, 10/16/18; The Dairy News, 10/16/18)

    November-2

    Seattle Business magazine named USDEC member Darigold its 2018 Gold Award winner in sustainability. Each year, the magazine recognizes area companies for “outstanding contributions to the community” in 10 categories. In explaining the sustainability category honor, the magazine said this: “In 2005, Darigold initiated a corporate social responsibility program to ensure stewardship of cows and land, as well as to reduce environmental impacts. Since the inception of this initiative, Darigold has reduced energy use and carbon dioxide emissions, assured animal welfare practices, supported on-farm employee management, and invested in infrastructure, technology, people development and systems to drive even further environmental improvements. From 2005 to 2015, Darigold processing plants reduced electricity usage by nearly 6 percent and natural gas usage by almost 18 percent. Its overall carbon footprint was down 16 percent as of 2016. And, in the past six years, five Darigold farmers have won the U.S. Dairy Sustainability Award.”

    Fonterra Brands Malaysia plans to invest up to US$14 million to expand its Susumas plant in Selangor. The facility imports milk powder from New Zealand, blending and packing up to 35,000 tons per year. The Susumas operation is Fonterra’s manufacturing hub for the region, shipping to 11 countries in Asia, Southeast Asia, Africa and the Middle East. Fonterra says it expects to post 20 percent export growth from the facility this year and triple that in 2019 fueled by rising demand from the Philippines. (The Malaysian Review, 10/25/18)

    Argentine dairy SanCor finalized the sale of two manufacturing plants (in Chivilcoy, Buenos Aires Province, and Morteros, Córdoba Province) and the brands Angelita and Las Tres Niñas to ag giant Adecoagro. It also exited the custard and dessert business, selling its remaining 10 percent stake in Alimentos Refrigerados to majority shareholder Vicentin. (USDEC South America Office: Diario Ámbito Financiero, 10/31/18).

    Canada’s Saputo paid $85 million for cheesemaker F&A Dairy Products. F&A operates plants in Las Cruces, N.M., and Dresser, Wis., and distributes products in the United States and Mexico . . . Georgia-based grass-fed milk processor Hart Dairy and Australian distributor Kollaras & Co. formed a joint venture called Dairy Fresh New Zealand to distribute Hart’s line of Grass 365 brand milk, yogurt cheese and butter, as well as dairy products sourced from Australia and New Zealand in Asia . . . California-based food and beverage company Sovos Brands purchased Colorado’s noosa yogurt. (Company reports)

    Associated Milk Producers Inc. started production at its revamped Paynesville, Minn., cheese plant last week. New equipment expands the facility’s cheddar production capacity to about 136 metric tons per day . . . Vietnam Investment Group signed a franchise deal with Thailand’s Minor International to open 100 of Minor’s The Coffee Club coffeeshops in Vietnam . . . Bonolat, the dairy unit of Brazilian conglomerate Asperbras Group, expects to inaugurate a new US$16-million dairy processing plant in Penápolis, São Paulo, in the first half of 2019. The facility will produce regular and specialized UHT milk (including lactose free), milk powder and condensed milk. Stage II plans call for adding sour cream, butter and cheese capacity. (USDEC Southeast Asia office; Company reports; Milkpoint, 10/29/18)

    New Zealand’s Pamu (the brand name of state-owned ag enterprise Landcorp Farming) and Australia-backed Nu-Mega Ingredients (a division of Clover Corp.) each took a 35 percent stake in yet-to-be-built specialty spray-drying facility Melody Dairies in Waikato. The investment was around NZ$11 million each (about US$7.5 million each). Chinese-backed Dairy Nutraceuticals holds an additional 20 percent, and New Zealand Innovation Waikato has the remaining 10 percent. The plant was designed to meet smaller scale and niche powder manufacturing demand. Pamu plans to use it primarily to develop sheep milk powder products. Nu-Mega plans to use the dryer to manufacture specialty micro-encapsulated powders for the infant formula, pharmaceutical and functional foods markets. Construction on the facility is expected to start this month, with production beginning in November 2019. (BusinessDesk, 11/5/18; Stockhead, 11/4/18)

    Italian dairy giant Parmalat paid $1.2 billion for Kraft Heinz Co.’s Canadian natural cheese business, including a plant in Ingleside, Ontario. The transaction adds brands Cracker Barrel, P’tit Quebec and aMOOZa! to Parmalat Canada’s existing brand stable, including Black Diamond and Balderson. Kraft Heinz will continue to operate its Mount Royal, Quebec, facility for manufacturing Philadelphia Cream Cheese, Cheez Whiz and Kraft Singles. Parmalat said the deal will help it expand its Canadian operations while improving efficiency. (Company news)

    Bord Bia, the state-run Irish food board, signed a memorandum of understanding with Wyeth China wherein Wyeth commits to sourcing all its dairy ingredients for its Illuma brand exclusively from milk from Irish farms participating in Bord Bia’s Sustainable Dairy Assurance Scheme. Bord Bia said the deal is worth €110 million (about US$126 million) annually . . . Plant-based food and beverage manufacturer Vitasoy plans to build a $154 million manufacturing plant in China. The Hong Kong-headquartered company expects to complete the facility, it’s largest in China, in 2021 . . . Fonterra plans to raise up to NZ$150 million (about US$102 million) through a bond offering. The money would go toward “general corporate purposes” . . . Dutch dairy giant FrieslandCampina opened a new sales office in São Paulo . . . FrieslandCampina and Dutch ag development agency Agriterra extended a partnership agreement to assist smallholder dairy farmers in Asia and Africa. The effort aims to improve milk production, farm efficiency and food security through the teaching of sustainable production methods. (Company reports; USDEC Southeast Asia office; Milkpoint, 11/7/18; FoodBev.com, 10/31/18)

    Recent new product rollouts around the world highlight how dairy processors are innovating to meet individual market needs. Those needs tend to revolve around products that boast easier digestion; products viewed as more natural, minimally processed or clean label; products that claim improved nutrition; and products that simply meet local taste preferences. Here are some of the latest:

    • In Thailand, Dairy Farming Promotion Organization of Thailand as well as Tofusan launched new lactose free milks. Brazil’s Agrindus debuted its own version of A2 milk. Nestlé launched A2 formula in Australia and New Zealand, with plans to roll out other A2 versions tailored to other geographies. And Malaysia’s Eco Farm Solutions introduced A2 fresh milk in regular, strawberry and chocolate.
    • Nestlé removed stabilizers from two of its major milk brands in Brazil—Ninho and Molico—a project that cost US$34 million. The move is part of a broader clean label push by the Swiss company. Coca-Cola introduced a “natural” yogurt in Brazil (featuring no artificial additives) through its Verde Campo operation acquired in 2016. The company invested $13 million to equip its plant to produce “natural” dairy products. Nestlé launched organic full cream NIDO milk powder in China to meet rising interest in premium organic foods.
    • Chile’s Loncoleche debuted a milk line with 50 percent more protein and 30 percent more calcium than standard milks. The line is also lactose free. Canada’s Saputo unveiled Joyya ultrafiltered milk with 75 percent more protein and 25 percent less lactose than regular milk.
    • China’s Yili Group introduced Joyday ice cream in Indonesia through its subsidiary Green Asian Food Indonesia. Joyday comes in 11 flavors tailored to local tastes, including honeydew melon and sweet corn. Yili plans on extending the Joyday brand to other Southeast Asian markets. Nestlé India introduced a line of yogurt-based gourmet dips and spreads under its Maggi label in India. Flavors are cheese-garlic and jalapeno salsa. Mondelez Philippines extended its Cheez Whiz line with Cheez Whiz Mild, tweaked to meet Philippine preferences for a milder, milkier cheese taste. (USDEC staff; USDEC Southeast Asia office; USDEC South America office; Company reports; FoodNavigator-Asia.com, 11/5/18; Borneo Post, 10/28/18; New Zealand Herald, 10/11/18; Milkpoint, 10/10/18)

    A new report commissioned by Fonterra’s Shareholder Council concluded that the co-op has failed to deliver “meaningful returns” on capital since its inception in 2001. And given the increased competition for milk in new Zealand, Fonterra needed to “do better” to earn the trust of farmers, the report said. The co-op announced a strategic business review in September, but offered more information on operational changes at its annual general meeting late last week in Waikato. CEO Miles Hurrell told members the co-op was jettisoning it goal to increase milk volume to 30 billion liters (about 31 million metric tons) by 2025, an objective set by former CEO Theo Spierings in 2012 as part of his V3 (volume, value, velocity) strategy. The goal created confusion because it placed too much emphasis on volume, Hurrell said, while the focus should be on “creating value for our farmers, our unit holders and for NZ.” He added that the co-op would also shift away from developing off-shore milk pools. Chairman John Monaghan said the strategic review was making progress. The co-op has identified three assets for potential sale or divestiture, including its stake in Chinese formula maker Beingmate. When it comes to making changes, there will be “no sacred cows and no room for being sentimental,” Monaghan said. (Rural News Group, 11/13/18; Dairy News, 11/13/18; Otago Daily Times, 11/9/18)

    Irish dairy co-ops Ornua and Glanbia Ingredients Ireland (GII) are clashing over GII’s launch of its Truly Grass Fed dairy brand in the United States. Ornua, as well as Irish farm organizations, claim that the brand will erode sales and margins of centrally marketed Kerrygold products, undermining overall Irish dairy exports to the United States. Chairs from dairy co-ops across Ireland planned to meet this week to discuss the matter. GII, which is Ornua’s largest shareholder, launched Truly Grass Fed cheese in the United States last month, but sister company Glanbia Nutritionals has been marketing Truly Grass Fed dairy ingredients since 2017. GII dismissed the concerns about market erosion, insisting the brand targets a different consumer demographic than Kerrygold and indicating it did not intend to undercut Kerrygold cheese prices. It also noted it originally approached Ornua about marketing the product after it identified the “grass-fed” opportunity. (Agriland, 11/13/18; Irish Independent, 11/8/18, 10/31/18)

    Notwithstanding its internal troubles, Fonterra recorded two noteworthy sales results in China last week. At the China International Import Expo, the company said it signed deals worth more than 12 billion yuan (about US$1.7 billion). Nearly all of that dollar amount came from a contract between Anchor Food Professional, Fonterra’s foodservice business, and Chinese conglomerate Xiamen C&D Corp. During this year’s “Singles Day,” the Nov. 11 Chinese shopping event that is nearly five times larger than Cyber Monday in the U.S., the co-op sold NZ$28 million in Anchor, Anmum and Anlene products. It moved 12 tons of Anchor butter, 22 times more than the previous year. (New Zealand Herald, 11/14/18; China Daily, 11/8/18)

    Mondelez International opened a new $15-million R&D hub in Thane, India—its third Asian technical center . . . Malaysian ice cream manufacturer Doluvo plans to expand into Brunei and Singapore with its Pops Malaya brand by the end of 2018 and is talking with a distributor in the Philippines to target further Southeast Asian and Middle Eastern expansion. Long-term, the company has ambitions to take the brand global. (USDEC Southeast Asia office; Moneycontrol.com, 11/1/18)

    HP Hood is rolling out a new oat beverage brand called Planet Oat Oatmilk to the U.S. retail market in December. The line comes in four flavors: lowfat, extra creamy, vanilla and dark chocolate. (Fast Company, 11/13/18)

    Mataura Valley Milk’s new plant at Gore on New Zealand’s South Island made its first WMP shipment in early November and plans to start nutritional product trials in December (with commercial shipments beginning in February 2019). The company, whose primary shareholder is China Animal Husbandry Group, plans to market product globally, with about 30 percent earmarked for China. Mataura Valley officials said the facility has been running near capacity, producing about 110 metric tons of dry product per day. (Southern Rural Life, 11/28/18; Newshub, 11/23/18; Otago Daily Times, 11/23/18)

    New Zealand’s Westland Milk Products is building a NZ$22-million (about US$15 million) segregation facility that will allow it to collect and process different types of milk products, such as A2 and colostrum. The plant, which will be located at its site at Hokitika, South Island, is part of the co-op’s effort to reduce its dependency on processing low-value, bulk commodities. (BusinessDesk, 11/29/18)

    French ag co-op Agrial Group acquired German cheesemaker Rotkäppchen Peter Jülich Group. Agrial said the deal will expand the portfolio of its Eurial dairy group and enhance its position in the growing German cheese market . . . South Korean food manufacturer CJ CheilJedang paid $1.8 billion for an 80 percent stake in Minnesota-based Schwan’s Co. The deal does not include the Schwan’s Home Service home-delivery business. (AP, 11/18/18; FoodBev.com, 11/14/18)

    Dutch dairy giant FrieslandCampina is studying whether it should close its Bree, Belgium, mozzarella plant. The company says the facility is not meeting profitability expectations . . . Australian refrigerated and frozen yogurt retailer/marketer The Yoghurt Shop is targeting export markets for expansion. The company, which began shipping to shipping to Brunei, Thailand, Hong Kong and Singapore last year, plans to expand across Southeast Asia by 2022 . . . Ekosem-Agrar, the German holding company for Russian milk producer EkoNiva, is making major investments in farms and factories to increase Russian dairy production. The company, which slated construction on 14 dairy farms (holding 45,000 cows) this year, plans to add another 15 farms for 51,000 cows in 2019, as well as a new cheese plant in Novosibirsk, between Kazakhstan and Mongolia. The company is also launching the new umbrella brand EkoNiva for the Russian retail market . . . Dalyn Dye will step down as president and CEO of Hoogwegt U.S. effective Dec. 31, 2018, to pursue other opportunities . . . Lukas Paravicini, COO of Fonterra Co-operative Group’s consumer and foodservice business, resigned effective January 2019. A successor has not yet been named. (USDEC Southeast Asia office; Company reports; Hoard’s Dairyman, 11/28/18; DairyReporter.com, 11/15/18)

    December-2

    New Zealand’s Fonterra Co-operative Group and China’s Beingmate reached a provisional agreement to halt their joint venture operation in Australia as of Dec. 31, 2018. Fonterra will resume full ownership of the facility and supply Beingmate with dairy ingredients under a “multi-year” agreement. Beingmate took a 51 percent stake in Fonterra’s Darnum, Victoria, nutritional powder plant as part of Fonterra’s US$560-million investment in Beingmate in 2015. Halting the joint venture is part of Fonterra’s portfolio review stemming from its poor financial performance in 2017/18. The co-op says it doesn’t expect to complete that review for some months, but it also is considering selling its Tip Top ice cream business in New Zealand. (Company reports)

    China’s largest dairy processors continue to eye foreign markets to accelerate growth, with Southeast Asia as a prime target. Mengniu Dairy inaugurated a new US$47-million yogurt and probiotic drink plant in Cikarang, West Java, Indonesia. The company pointed to strong yogurt growth potential in Indonesia given its large population, low penetration for yogurt (only about 17 percent, it said) and absence of a dominant yogurt brand. It will produce products under the YoyiC brand. Mengniu plans to use make Indonesia its hub for manufacturing and marketing for the region. Yili Industrial Group paid $80 million for Chomthana, a leading Thai ice cream maker known for its Cremo brand. Yili reportedly plans to leverage Chomthana’s extensive cold chain logistics network to market its own-branded ice cream. (USDEC Southeast Asia office; Nikkei Asian Review, 12/4/18; South China Morning Post, 12/3/18)

    Dutch dairy giant FrieslandCampina acquired New Jersey-based. importer/distributor Jana Foods. Jana, a long-time FrieslandCampina distribution partner, will be integrated into the company’s Consumer Dairy USA business. (Company news)

    Vietnamese distributor Natural Food Group is now marketing products from Australian infant formula manufacturer Bellamy’s Organic. (USDEC Southeast Asia office)

    Recent new dairy product rollouts highlight trends in protein and the importance of innovating to meet local market needs. Here are a few prominent ones:

    • Danone Brasil launched its YoPro line of yogurt with 15 grams of protein per serving, while Brazilian competitor Vigor rolled out Vigor Greek Protein with 13 grams per serving.
    • Brazilian dairy processor Laticinios Bela Vista introduced a new UHT dairy beverage under the name Piracanjuba Whey. The line, which comes in four flavors, features 23 grams of protein and 5 grams of branched-chain amino acids.
    • Indonesian Dairy Queen outlets introduced durian-flavored ice cream after a successful reception in Thailand in Blizzards and shakes.
    • The Philippine Rice Research Institute created a new ice cream sandwich made of carabao milk ice cream between two brown rice crackers. The group expects the product will launch sometime this month. (USDEC Southeast Asia office; USDEC South America office)

    Arla Foods purchased Mondelez International’s processed cheese business in the Middle East and North Africa (MENA), including a manufacturing facility in Manama, Bahrain. Arla called the deal a “gamechanger” for its MENA business, which is on track to log sales of €560 million (about US$635 million) this year. Arla built its MENA processed cheese trade through exports, with some local production in Riyadh, Saudi Arabia. Its European plants, however, were nearing capacity. The Bahrain facility can make 66,000 tons of cheese per year. Mondelez had been manufacturing processed cheese at the plant under the Kraft label, but that license was set to expire in 2020. The deal is set to take effect by the end of May 2019. (Company reports; Reuters, 12/13/18)

    Danone is reportedly considering buying Russian baby food manufacturer Progress in a deal worth somewhere between $300 million and $660 million . . . Dutch dairy giant FrieslandCampina acquired Spanish cheese co-packer, distributor and long-time partner Millán Vicente to strengthen its position on the Iberian Peninsula. (Company news; Dairy Markets 12/11/18)

    Müller UK & Ireland completed a £15-million (about US$18-million) upgrade to its fresh milk processing facility in Bellshill, Scotland. The expansion is part of a three-year program to bolster its Scottish operations that also included closing outdated facilities in Aberdeen and East Kilbride . . . Chinese state-owned investment firm Great Wall Guorong Investment paid $60 million for a 5 percent stake in infant formula maker Beingmate Baby & Child Food UK (Company reports; New Zealand Herald, 12/11/18)

    Global dairy processors continue to seek ways to demonstrate their commitment to sustainability. Most recently, Dutch dairy giant FrieslandCampina rolled out a new milk under the “On the way to PlanetProof” label. Germany’s Stichting Milieukeur (SMK) owns the “On the way to PlanetProof” name and oversees certification under the label. Companies that want to use the brand must meet certain nature, climate and animal welfare measures established by SMK. Click here for more on “On the way to PlanetProof.” (Company reports)

    FrieslandCampina signed a contract manufacturing deal with Germany’s DMK. Under the terms of the agreement, DMK will produce mozzarella at its Georgsmarienhutte plant in northwestern Germany; FrieslandCampina will provide the milk, the cheese recipe and marketing. DMK plans to modernize and expand the plant as part of the deal. (Company reports)

    Dairy Farmers of America (DFA) purchased Agropur’s St. Paul, Minn., extended-shelf-life manufacturing plant. DFA said the move strengthens its processing capabilities for existing customers and diversifies its product portfolio due to the plant’s aseptic processing capabilities . . . Irish dairy co-ops North Cork Co-operative Creameries and Newtownandes Co-operative agreed to merge to gain efficiencies and position for growth. The combined operation will process 247,000 metric tons of milk annually but has capacity to increase that to more than 370,000 metric tons. (Company reports; Agriland, 12/14/18)

    Little Caesars Enterprises expects to open its first location in the Philippines next month. (USDEC Southeast Asia office)

    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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