USDEC's 2022 Global Dairy Business Year-in-Review

We have assembled the important mergers, key acquisitions, joint ventures, new facilities, executive hires and marketing initiatives that made 2022 a remarkable year for global dairy business. 

Across the international dairy sector, business activity has been brisk this year, as one can see from the U.S. Dairy Export Council's 2022 Global Dairy Business Year-in-Review. 

USDEC monitors global dairy business developments for our members and curates them for our weekly, members-only newsletter, Global Dairy eBrief. We aggregate and summarize what's most relevant for this retrospective annual review. 

We started this review with items from the January 7 Global Dairy eBrief and ended with news from the December 23 edition. This is a fast-paced yet lengthy review. We put company names in bold for easy scanning and searching.

What follows is USDEC's curated summary of important global dairy business developments of 2022, presented in month-by-month chronological order.  

Dutch dairy giant FrieslandCampina plans to sell its Friso infant nutrition business in a deal worth up to $2.5 billion. FrieslandCampina markets the brand in 25 nations, but its specialized nutrition division (which includes Friso) has underperformed of late. … Belgioioso Cheese is spending an estimated $6 million to turn a Glanville, N.Y., warehouse into a new cold storage facility. The facility will complement Belgioioso’s Glenville cheese plant that opened in 2020. (Reuters, 12/21/21; The Daily Gazette, 12/13/21)

Darigold President and CEO Stan Ryan is retiring at the end of the co-op’s fiscal year ending March 31, 2022. Joe Coote, president of the company’s Global Ingredients Division, will replace Ryan as CEO. Allan Huttema, Darigold’s chairman, called Ryan a “game-changing and transformative leader” since he took the reins in 2016. “Under his leadership, our co-op significantly improved its performance, advanced its modernization and growth, re-established its brand and customer franchise, initiated the largest capital investments in our history to solidify the co-op, and built and strengthened internal teams to make Darigold a more formidable competitor at home and on the global stage,” Huttema said. Coote, who joined Darigold in late 2020, plans to continue the co-op’s international expansion. He has extensive experience leading international organizations, including 14 years in senior leadership positions in global and domestic dairy. He assumes leadership as the co-op prepares to break ground on a new dairy processing facility in Pasco, Wash., and rebuilds its butter and milk powder facility in Caldwell, Idaho, which suffered extensive fire damage in October. (Company reports)

New Zealand’s Fonterra and Dutch dairy processor Royal A-ware plan to significantly expand their joint production site in Heerenveen, Netherlands. The site features side-by-side plants: an A-ware cheese facility and a Fonterra factory making whey products and other ingredients. The project aims to increase cheese capacity from 200,000 MT per year to 300,000 MT, as well as add capacity for new products, including milk powder, lactoferrin and butter. (VeldPost, 1/3/22; Food Holland, 12/31/21)

Papa John’s International signed a development agreement with private equity firm FountainVest Partners under which FountainVest will open more than 1,350 stores in South China by 2040. It is the largest franchise development agreement in Papa John’s history. In December, FountainVest announced that it had acquired China Food & Beverage Group, a Papa John’s franchisee in China that operates 160 Papa John’s stores in Shanghai and southern regions. The pizza chain has about 200 total units in China currently. (Restaurant Dive, 1/7/22)

Saputo announced the retirement of President and COO Kai Bockmann effective March 4 … Two more dairy companies launched plant-based versions of their standard cheese lines. Mondelez International rolled out an oat-and-almond version of its Philadelphia cream cheese in the UK, while Bel Group introduced a coconut-oil-and-starch-based version of its Babybel line, also in the UK. … Indian snack company Haldiram’s Nagpur is entering the dairy sector, investing $14 million to build a long-shelf-life dairy manufacturing facility to produce buttermilk, lassi and other products. (Company reports; FoodBev.com, 1/10/22, 1/6/22, 1/5/22)

The trend of Chinese investment in cheese continues. Construction on Shanghai Milkground’s $125-million cheese manufacturing and innovation center in Jinshan Industrial Zone is underway. The 550,000-sq.-ft. facility will produce lollipop-style cheese snacks, high-calcium cheese slices and cheese cups for children and serve as an R&D center. China’s Mengniu Dairy is Shanghai Milkground’s largest stakeholder. China’s Panda Dairy Corp. launched a six-item processed cheese line for retail sales. The line includes lollipop-shaped cheese snacks for children (in shelf-stable and refrigerated versions), seaweed-filled cheese and cheese slices. (USDEC China office)

Bord Bia, Ireland’s state-funded food board, will lead a promotional campaign for EU ag products, including dairy, in Asia and other target export markets. The dairy portion of the campaign will focus on Japan, Malaysia, the Philippines, Thailand and Vietnam using the tagline “European Dairy—The Sustainable Choice for Asia.” Dairy activities will receive €3.2 million (about US$3.6 million) from the total promotional budget of €13.7 million (about US$15.6 million). (USDEC Southeast Asia office; Board Bia)

Brazil’s Unium Group, the processing arm of dairy cooperatives Frisia, Castrolanda and Capal, is building an R$460-million (about US$83 million) cheese, whey and butter plant in Ponta Grossa, Paraná. … Indonesian confectionery and drink maker Mayora Indah earmarked $70 million for 2022 capital spending projects, including for a new manufacturing plant. The company offered no further details on the facility. … Japan’s Meiji is making progress on its new yogurt, cream and pasteurized milk plant in Tianjin, China. The company expects the $300-million facility (its second facility in China) will begin commercial production in 2023. … Nestlé’s new Nestlé Milk Berries milk powder, launched recently in China, is part of the company’s efforts to appeal to local tastes by developing products featuring traditional Chinese ingredients—in this case, wolfberries (also known as goji berries). The product has three ingredients: milk powder, wolfberries and vitamin E. (USDEC South America office; USDEC Southeast Asia office; USDEC China office)

Unilever is restructuring its business into five distinct business groups, including two that cover all its food operations: nutrition and ice cream. The company, which has come under fire from investors for underperformance, says the new organization will allow it “to be more responsive to consumer and channel trends.” The restructuring includes cutting 1,500 management positions. … Unilever also reportedly inaugurated its $112-million ice cream plant expansion in China’s Jiangsu Province. The plant was built in 1996 and expanded twice before in 2003 and 2013. … China’s Yili Group opened its new fluid milk plant in Inner Mongolia. The massive 1.5-million sq.-ft. facility features 22 production lines. … The European Bank for Reconstruction and Development (EBRD) gave a €3.5-million loan (about US$3.9 million) to Moroccan processed cheesemaker Land’Or. The money is earmarked for additional equipment and a storage expansion at the company’s new cheese plant in Kenitra, Morocco. … Colombian dairy processor Alpina rolled out a new line of freeze-dried cheese snacks manufactured with Canada-based EnWave’s “Radiant Energy Vacuum” technology. The company is marketing the line as a nutritious snack for the health conscious. It comes in three flavors: parmesan, edam and Sopó (a domestic variety similar to parmesan). (USDEC China office; Company reports; EBRD; Reuters, 1/25/22)

Dutch dairy processor Royal A-ware and trading company Hoogwegt signed a long-term partnership agreement in which Hoogwegt will market milk powder and cream manufactured at A-ware’s plant in Aalter, Belgium. A-ware said the deal will give the company direct access to Hoogwegt’s worldwide network. Hoogwegt said it will give the company a stable source of powder and cream to market to companies in Europe and abroad. (Company reports)

French dairy processor Sodiaal is closing two dairy plants in France: a UHT milk operation in Loire-Atlantique and an ingredients facility in Saône-et-Loire. The company blamed the decision on declining sales, particularly—in the case of the ingredient facility—for demineralized whey for infant products. The company also announced plans to spend €450 million (about US$508 million) over the next five years on a wider restructuring plan that expands production of cheese, premium milk, butter, cream and fresh dairy products and another €150 million (about US$169 million) to diversify and “move up-market” on dairy ingredients. (Just-Food.com, 2/2/22)

Italy-based cheesemaker Fratelli Amodio is building a fresh mozzarella operation in Somerset, UK, to bypass costly post-Brexit tariffs. The line will produce 1.5 MT of mozzarella per day, but the system’s versatility and modular nature will allow the company to produce additional varieties and expand production as demand grows. … Ireland’s Kerry Group opened a new 21,500-sq.-ft. product innovation addition to its facility in Jeddah, Saudi Arabia. The company plans to use the facility to create products adapted to local tastes to help food and beverage companies meet the growing consumer demand in the region for healthier and more sustainable food and beverages, particularly in snack, meat and bakery sectors. (USDEC Middle East/North Africa office; Company reports; DairyReporter.com, 1/26/22)

Canada-based Saputo is investing C$169 million (about US$133 million) to modernize and expand cheese manufacturing plants in California and Wisconsin and support growth in the retail sector. The company expects to start the projects in the fourth quarter of fiscal 2022 and complete them in two years. On the opposite end of the spectrum, Saputo plans to streamline operations at two manufacturing facilities in Australia and “right-size its footprint” at its West Coast cut-and-wrap operations by closing its Bardsley Street facility in Tulare, California, in 2023. Saputo called the announcement “the first in a series of investments and consolidation activities.” (Company reports)

Darigold resumed partial butter production at its Caldwell, Idaho, plant. A fire forced the plant’s closure last October. Prior to the incident, the plant processed 1.4 million lbs. of milk per day. Repair and cleaning work continues on other parts of the facility where damage was more severe. Milk powder production remains entirely shut down. (Company reports)

Lactalis CEO Philippe Palazzi left the company effective Feb. 3. He held the position for less than two years. Reports indicate a disagreement over company strategy caused the split. A replacement has yet to be named. … German biotech companies Formo Bio and Brain Biotech formed a partnership to scale up production of animal-free milk proteins. Formo plans to scale up its milk protein production using Brain Biotech’s genome editing technology. … FrieslandCampina Engro, the Pakistan-based arm of the Dutch dairy giant, joined with Pakistan’s University of Veterinary and Animal Sciences to launch the Pakistan-Netherlands Dairy Development Centre (NDDC). The center will focus on sharing Dutch dairy expertise with Pakistani dairy stakeholders through conferences, training, research projects and other activities. … Fast-food chain Arby’s, owned by Inspire Brands, signed an exclusive development agreement with Shahia Foods Ltd. to launch and develop the brand in Saudi Arabia. (USDEC Middle East/North Africa office; Company reports; FoodBev.com, 2/8/22; Food Dive, 2/7/22)

Arla Foods plans to spend €600 million (about US$680 million) this year in structural investments. Projects include expanding Starbucks production capacity at its Esbjerg, Denmark, facility, finishing a new powder tower in Pronsfeld, Germany, completing a mozzarella expansion at Branderup, Denmark, and expanding production at Arla Foods Ingredients sites. The company also said it plans to invest further in “digitalization solutions” in the supply chain. (Company reports)

Vertically integrated Qatari dairy firm Baladna formed a partnership with the Philippine Departments of Agriculture and Trade and Industry to build an integrated milk production and dairy processing operation in the Philippines. The US$500-million project reportedly will produce 125,000 MT of raw milk per year. The Department of Agriculture has identified five potential sites for the project. Baladna representatives are expected to conduct site visits in the coming weeks. This is the third major foreign investment Baladna has announced in the past seven months. The company signed a similar deal for an integrated milk/dairy operation in Malaysia last August and announced its intention to build in Ukraine in October. (USDEC Southeast Asia office; Philippine News Agency, 2/14/22)

China’s Junlebao Dairy paid $32 million for a 20% stake of two subsidiaries of South China Royal Group, a producer of buffalo milk products. … Ireland’s Kerry Group acquired German bioactive compound manufacturer c-LEcta and Mexican enzyme maker Enmex in a bid to deepen its investments in the food and pharmaceutical biotech sector. The company said it sees enzymes playing a critical role in helping “to create a world of sustainable nutrition.” (USDEC China office; Irish Farmers Journal, 2/15/22)

Ireland’s Ornua is expanding its export portfolio in the Middle East/North Africa. The company will begin shipping Kerrygold 100g butter sticks to Jordan, Kuwait and Saudi Arabia. Ornua will also ship a range of flavored string cheeses for use in stuffed-crust pizzas and other dishes to quick-service restaurants in Saudi Arabia and Egypt. … Mexican retailer Chedraui plans to open 31 new stores in Mexico in 2022. (USDEC Mexico office; Agriland, 2/13/22)

After years of court battles over its environmental impact, Glanbia Ireland and Royal A-ware finally earned a green light to build a joint-venture cheese plant in Belview, Kilkenny, Ireland. The five-member Irish Supreme Court unanimously dismissed an appeal by Irish environmental watchdog An Taisce to halt the project. The court ruled that the group had overstepped its bounds in assessing indirect environmental impacts from the plant, such as potential environmental damage caused by the farms producing milk to supply the facility. The court said such projections are “elusive, contingent and speculative” and beyond An Taisce’s Environmental Impact Assessment directive. After the verdict, Glanbia said it was committed to getting the plant into production as soon as possible. The €140-million (about US$159-million) facility, which first received planning-commission approval in 2019 (before being stalled by a series of An Taisce challenges), will produce edam and gouda cheeses and is part of Glanbia’s effort to diversify its reliance on the UK market in a post-Brexit world. (The Irish Times, 2/16/22; RTE News, 2/16/22)

A new joint venture from Kraft Heinz and plant-based startup TheNotCompany (NotCo) says it plans to “develop superior plant-based versions of co-branded products at a level of speed, taste, quality and scale yet to be seen in the industry.” The new entity, The Kraft Heinz Not Company, will operate under the control of Kraft Heinz using NotCo technology. While cheese and dairy were not specifically mentioned, the companies said the new company would focus on “plant-based innovation across numerous Kraft Heinz product categories.” (Company reports)

Chinese dairy processor Beingmate is expanding its Tianjin plant. The company will add capacity for 5,000 MT of organic milk powder, 5,000 MT of dairy-based nutritional products and 10,000 MT of goat’s milk infant formula. … Starbucks opened its 1,000th store in the Middle East/North Africa region after cutting the ribbon on a new unit in Dubai. It took the chain 22 years to reach the milestone in partnership with its sole franchisee Alshaya Group. … China Post, China’s state-owned postal-services provider, opened its first coffee shop last week in the coastal city of Xiamen. With 54,000 existing China Post outlets, the operation has the potential to quickly scale up should it opt to pursue in the business. (USDEC China office; USDEC Middle East/North Africa office; South China Morning Post, 2/23/22)

Citing the “rapidly changing situation and sanctions being taken against the country,” New Zealand’s Fonterra suspended dairy exports to Russia. New Zealand’s main dairy export to Russia is butterfat. In 2019-2020, Russia accounted for 5-6% of Kiwi butterfat shipments or about 25,500 MT per year. In 2021, volume fell by almost half to 13,420 MT. The company has seven people based in Moscow at its Fonterra Russia business and 35 in St. Petersburg at its Unifood joint venture. Both companies were reportedly still operating at press time. Conditions are changing rapidly in the region. But at press time, French dairy giant Lactalis had halted operations at one of its three Ukraine factories and slowed production at the other two plants. The Ukraine plant in Nikolaev was shut down due to its proximity to combat zones. Plants in Shostka and Pavlograd had to reduce output due to significant cutbacks in milk deliveries. The company’s Ukraine plants serve domestic markets but also export to other countries in the region like Georgia and Moldova. Lactalis said it was closely monitoring its sites and employees based in Russia. (Stuff.co.nz, 2/28/22; just-food.com, 2/28/22)

Vertically integrated Malaysian dairy producer/processor Farm Fresh plans to go public with a listing on the Bursa Malaysia stock exchange. It is looking to raise RM1 billion (about US$238 million) to expand export operations first to Hong Kong, then to the broader region, including Indonesia and the Philippines. … Oman’s Mazoon Dairy signed a distribution deal with Dubai-based Ghassan Aboud Group. Ghassan Aboud will begin distributing Mazoon’s entire product line—including milk, cheese, ice cream and other items—in the UAE. (USDEC Southeast Asia office; USDEC Middle East/North Africa office; Company reports)

A growing list of companies with business in Russia are halting or suspending operations—in whole or in part—in protest of the country’s war on Ukraine.

• Denmark-based Arla Foods suspended all operations, including exports.
• Finland’s Valio closed its processed cheese plant near Moscow after earlier halting exports to Russia as well as imports of ingredients and packaging materials from Russia.
• France’s Danone suspended investment projects in Russia, but said it would continue production and distribution of dairy products and infant formula to meet the population’s essential food needs.
• McDonald’s temporarily closed 847 company-owned stores in Russia and 108 units in Ukraine.
• PepsiCo said it would suspend all investment in Russia and all sales of beverages, but would continue to operate its Russian dairy business in part to support its 20,000 Russian employees and 40,000 ag workers who supply the operations.
• Starbucks temporarily closed its 130 stores, which are operated by franchisee Alshaya Group, based in Kuwait.
• Yum Brands Inc. is pausing Russian investment and suspending operations at all 50 Pizza Hut stores (in partnership with its master franchisee) and 70 company-owned KFC stores.
• A number of other U.S. foodservice chains, including Subway, Papa John's and Domino's, are redirecting their profits from Russian operations to support humanitarian efforts. But because their businesses in Russia are franchised (and supplies usually sourced independent of the franchisor), they cannot shut the operations down without the franchisees' cooperation. (AP, 3/9/22; Nation's Restaurant News, 3/9/22; Reuters, 3/8/22; Dow Jones Newswires, 3/7/22; FoodBev.com, 3/7/22)

New Zealand's Fonterra Co-operative Group and India's Future Consumer Ltd. decided to end their Indian joint venture: Fonterra Future Dairy. Fonterra cited business disruptions caused by the pandemic as the reason. It said it would continue to operate in India through its Anchor Food Professionals foodservice arm and its ingredients business. ... Danone reportedly reached a strategic cooperation agreement with China-based infant formula, rice powder and nutritional supplement maker Eurbest Nutritional Food. Danone said it plans to “invest and develop” Eurbest’s infant formula factory and products. … Qatari dairy company Baladna paid QAR67 million (about US$18 million) for a 5% stake in Egyptian dairy, juice and cooking product company Juhayna Food Industries. (USDEC Middle East/North Africa office; Company reports; just-food.com, 3/7/22)

UAE-based dairy company Al Rawabi plans to build a $177-million dairy complex in the Khalifa Industrial Zone Abu Dhabi (Kizad). The operation will include a 10,000-cow farm, feed factory, processing plant and other support facilities. With the additional capacity and the logistical benefits of the Kizad location, the company expects to increase its export business, with a focus on the GCC and Africa. Al Rawabi expects to produce 24,000 tons of finished products during its first year of operations. The company did not report what types of products the plant would produce. (USDEC Middle East/North Africa office; FoodBev.com, 3/14/22)

FountainVest Partners, which purchased Dairy Queen franchisee CFB Group late last year, plans to open 600 Dairy Queen units in China by 2030. CFB already operates 900 Dairy Queen stores in China, which is the fastest-growing global market for the DQ brand. … French yogurt and dessert maker La Fermière is building a 45,000-square-foot manufacturing plant in Batavia, N.Y. … Nestlé is building a new $675-million, 630,000-sq.-ft. beverage plant in Glendale, Arizona. The facility, scheduled for completion in 2024, will initially produce creamers but with the ability to expand to make additional beverages in the future. (Company reports; WGRZ, 3/16/22; QSR Magazine, 3/11/22)

Dutch dairy giant FrieslandCampina is closing two milk powder drying towers at its Leeuwarden, Netherlands, facility, as well as its fresh dairy product plant in Maasdam. The closures are part of the company’s plan to refocus its portfolio on value-added products. Leeuwarden will shut down May 1, 2022. Friesland Campina did not specify a date for Maasdam’s closure but said it would take place no later than December 2023. (Company reports)

Norwegian dairy processor TINE opened a $26-million cheese expansion at its Storsteinnes, Balsfjord, plant. The project is part of TINE’s plan to grow its dairy export business. The facility can produce 2,600 MT of traditional Norwegian brown cheese and 2,600 MT of goat and other cheese types. TINE initially plans to target South Korea, where brown cheese has been gaining a following, with other Asian markets to follow. (DairyReporter.com, 3/21/22)

New Zealand’s Fonterra Co-operative Group is exiting its Russian ventures. The co-op is closing its Moscow office and withdrawing from its joint venture with Russia’s Unifood that started in 2018. Fonterra said it is confident, given current market conditions, that it can find a home for product it was shipping to Russia. In 2021, that included 13,352 MT of butterfat, 1,811 MT of SMP and 1,445 MT of WMP. Separately, Fonterra said it was continuing to make progress on divesting its Chilean dairy business and on reviewing its Australian business. (Company reports)

Lactalis Chairman Emmanuel Besnier is taking over CEO responsibilities (although Lactalis has not said he will hold that title), and long-serving executive Thierry Clément has been appointed to the newly-created role of chief operating officer. Former CEO Philippe Palazzi stepped down in February. … Saudi Dairy and Foodstuff Co. (SADAFCO) added 215,000-sq.ft. of space to its Jeddah production facility, nearly doubling the size of the plant. The addition will focus on ice cream production. … Cargill opened a new technical application center in Turkey that will serve as a regional innovation hub to support dairy customers in the Middle East, Turkey and Africa. The facility includes a pilot plant and blending capacity. (USDEC Middle East/North Africa office; just-food.com, 3/24/22; FoodBev.com, 3/16/22)

The Middle East remains a thriving region for foodservice expansion. A few recent developments:

• AG Café, the master franchisee for the Tim Hortons brand in the Middle East, plans to open 110 more Tim Hortons locations in Saudi Arabia by 2024, giving the company more than 300 across the GCC.
• PJP Investment Group, the master franchisee for Papa John’s International, signed an agreement with UAE-based energy and retail company ENOC Group. By year-end, PJP plans to open seven Papa John’s outlets at ENOC food courts across the UAE. The new units will give PJP more than 70 Papa John’s stores in the nation.
• “Ghost” or “cloud” kitchens are a growing foodservice trend worldwide, including the Middle East. Kitopi Bahrain, which cooperates with many local, regional and international foodservice brands, including Urban Slice pizza, opened three cloud kitchens and a central production facility in Bahrain. With the expansion, the company will begin offering additional products, including OG Sliders burgers. Kitopi earlier announced plans to expand to Singapore and Malaysia in the second half of 2022. (USDEC Middle East/North Africa office)

Lactalis is reportedly buying the fresh product operations of German dairy co-op Bayerische Milchindustrie (BMI) including the brands Frankenland, Thüringer Land and Haydi and a manufacturing plant in Würzburg, Germany. BMI said it would focus its business on cheese and ingredients moving forward. (just-food.com, 3/29/22)

Olivier Delamea will succeed Jean-Paul Torris as CEO of Savencia Fromage & Dairy. Torris is stepping down after 30 years with Savencia, including the last six as CEO. Delamea is joining Savencia on April 4, 2022, after heading the vegetable division of the Avril Group and an earlier run as general manager of Danone France. … Swiss cheese and dairy processor Emmi named Ricarda Demarmels as the company’s next CEO. Demarmels, who currently serves as Emmi CFO, will replace Urs Riedener when he steps down on Jan. 1, 2023, after leading the company for 14 years. (Company reports)

Ireland’s Kerry Group joined the list of companies altering their Russian business plans. After scaling back its Russian and Belarusian activities over the past few weeks, the company announced it was suspending all operations in both countries. (Agriland, 4/4/22)

U.S. cheesemaker Valley Queen Cheese is spending $195 million to expand its Milbank, South Dakota, manufacturing plant. The project will increase annual output by 57,000 MT. Valley Queen expects to break ground next month, with the plant being fully operational by January 2025. Valley Queen expects the project will support significant growth in milk producers in the region, estimating farmers will add about 30,000 head over the next three years. (Company news)

China’s Ningxia Saishang Dairy is spending $63 million to build a new manufacturing plant in Shizuishan City in the Ningxia Autonomous Region in north-central China. Ningxia Saishang is a major supplier of cream and dairy ingredients to Starbucks and other Chinese coffee and tea shops. The company said the new plant would produce 100,000 MT of dairy products per year, but did not specify exactly which products it would make. Separately, local farming company Ningxia State Farm signed a framework agreement with the local government to build a $361-million farm that would initially house 50,000 dairy cows. The group plans to triple cow numbers by 150,000 by 2025. (USDEC China office)

UK cereal maker Weetabix Food Co., a subsidiary of Missouri-based Post Holdings, acquired Lacka Foods, owner of the Üfit high-protein drink brand. The deal is expected to create growth opportunities for Lacka in UK and international markets. (Company reports; FoodBev.com, 4/8/22)

China’s Bright Dairy launched a new freeze-dried cheese product under the Keep Cheese! label. The line comes in two flavors: plain and blackcurrant. The company is marketing the product from a nutritional angle, citing that it contains 2.6 times the amount of calcium as in milk. … Britain’s First Milk and Ornua Foods UK renewed a long-term agreement under which First Milk will continue to supply Ornua’s cut-and-wrap facility in Leek with cheddar. Prior to a recent expansion at its Lake District Creamery plant in Aspatria, First Milk was reportedly supplying Ornua with up to 50,000 MT of cheese per year. (USDEC China office; Company reports)

Coffee company Lavazza Group, headquartered in Italy, is planning a major expansion in China. Working with partner Yum China, the company plans to open 1,000 new outlets by the end of 2025. It currently has 58 stores covering all Tier 1 cities and many Tier 2. … Australian dairy and protein bar company Halo Food renewed a supply agreement to supply WMP and SMP to New Zealand retailer Foodstuffs. The deal is worth NZ$9.4 million (about US$6.3 million), a 22% increase in value over the first contract. (USDEC China office; Company reports)

Italian cheesemaker Nuova Castelli, owned by French dairy giant Lactalis, plans to close two Alival cheese plants in Ponte Buggianese and Reggio Calabria, Italy. The closures, set for the first quarter of 2023, are part of a cost-cutting effort to streamline operations. The Alival facilities have been struggling for some time, Nuova Castelli said, with performance aggravated by the pandemic and rising costs. The Ponte Buggianese facility makes mozzarella, ricotta and pecorino; products made at Reggio Calabria were not reported. (gonews.it, 4/23/22; La Nazione, 4/22/22)

Finland’s Valio sold its Russian dairy operations to Russian food producer Velkom Group, including a processed cheese facility in Ershovo, outside of Moscow, and the Viola cheese brand. The deal allows the new owner to continue using Valio packaging materials until it burns through current supplies and Valio brands beyond Viola until the end of the year. … The UK’s Reckitt Benckiser Group is shopping its infant formula business. Investment firms Blackstone, Carlyle Group and KKR & Co. are reportedly some of the potential buyers. Reckitt acquired the formula business when it purchased Mead Johnson Nutrition five years ago for about $17 billion. But performance has been disappointing and the company sold the Chinese portion of the business last year. … Qatari milk producer and dairy processor Baladna paid $18 million for a 5% stake in Egyptian dairy and juice company Juhayna Food Industries. Baladna, which is in the midst of expansion projects across Asia, is looking to enter the Egyptian market as well. … Mondelez paid $1.3 billion for Ricolino, the confectionery division of Mexico’s Grupo Bimbo. The deal will double Mondelez’s business in Mexico. (USDEC Middle East/North Africa office; USDEC Mexico office; YLE News, 4/26/22; Financial Times, 4/26/22) 

California-based Perfect Day and Israel-based Remilk are moving ahead with plans for new facilities they say will help scale-up production and broaden distribution of their “animal-free” dairy proteins. Both companies utilize fermentation technology to create milk proteins in the lab that can be used to produce milk, cheese, yogurt and other dairy products. Remilk, which recently secured $120 million in Series B funding, is building what it calls “the world’s largest full-scale precision fermentation facility” in Kalundborg, Denmark. The company claims production capacity for the new plant will equal the output of 50,000 dairy cows per year. Perfect Day contracted for 60,000 sq.-ft. of space inside The Gateway BioHive, a technology campus in downtown Salt Lake City. Construction on the production facility, the second after its Berkeley, California, headquarters, is reportedly set to begin “immediately.” (Company reports)

Glanbia Performance Nutrition will begin producing its Isopure protein drink powders in India through a partnership with local food and healthcare manufacturer Tiriputi Lifesciences. Glanbia made the move to support rising Isopure demand in the region. The company will continue to manufacture most of the ingredients in the EU, including WPI, and ship them to India for blending and packaging. … Wingstop is doubling its expansion plans in Indonesia, committing to open 120 new units by 2028 instead of 60 units. The Texas-based chain currently operates 50 restaurants in the country, five of which opened this year. (DairyReporter.com, 4/28/22; Restaurant Business, 4/27/22)

Danone reacquired the Dumex infant formula business from Yashili International seven years after selling the brand to Yashili. Danone unloaded the Dumex business in 2015 after sales dropped sharply due to distribution changes, the industry shift to online sales and a product-safety false alarm from a Danone supplier that undermined consumer confidence in the brand. Danone said the Dumex purchase, which includes a factory in Shanghai, will expand its ability to manufacture infant formula products locally. China was a booming market for imported infant formula after the melamine-contamination scandal of 2008, but significantly stricter government oversight of the baby food sector has helped re-build trust in domestic products. In addition to the Dumex purchase, Danone sold both its 25% stake in Yashili and 20% stake in Inner Mongolia Dairy Joint Venture to China’s Mengniu Dairy. The deal will increase Mengniu’s ownership of Yashili to 76% and gives Mengniu full ownership of the joint venture. The moves are part of Danone’s broader plan to boost revenue growth by disposing of underperforming assets. (Company reports; DairyReporter.com, 5/9/22; Reuters, 5/6/22)

PepsiCo sold its Wimm-Bill-Dann (WBD) beverage division to Russian cheesemaker Multipro but maintained ownership of WBD’s flagship dairy operations. PepsiCo purchased Russian dairy and beverage giant Wimm-Bill-Dann in 2010 for $3.8 billion. The company said it decided to sell the beverage division in 2021, prior to Russia’s invasion of Ukraine. WBD reportedly owns about one-third of the Russian dairy market. PepsiCo halted sales of Pepsi soda products in Russia in March due to the war but has maintained production and distribution of WBD products as well as its major snack brands. (Inside Beer, 5/6/22; Reuters, 5/4/22)

France’s Bel Group, which already held 82.5% of dairy, fruit and vegetable processor Mount Blanc-Materne, purchased all outstanding shares of the company. … Sargento Foods is acquiring fellow Wisconsin cheese company Baker Cheese Factory. (Company reports; WTMJ, 5/4/22)

FrieslandCampina opened a new $3-million pressed cheese expansion at its Napolact manufacturing plant in Cluj, Romania. The new production line can make 3,000 MT of cheese per year. … Michael Hanley, CEO of Ireland’s Lakeland Dairies, announced plans to retire at the end of the year. … Mexican food manufacturer Sigma Alimentos said it was prepared to swap milk powder (primarily imported) for fresh milk (produced domestically) if it would help reduce prices. The Mexican government is seeking a pact with private food manufacturers to limit food inflation. (SeeNews, 5/6/22; Bloomberg, 4/26/22)

Chinese dairy giant Yili Group plans to build a $2.2 billion, vertically integrated dairy operation in Cangzhou, Hebei Province. Yili claims the farm portion of the project will house 240,000 cows, with 115,000 acres devoted to silage corn and 50,000 acres to alfalfa. The company says the planned processing plant will handle 4,000 MT of raw milk per day. It did not specify what types of products the facility would produce. In addition to the Hebei project, Yili set aside another $2.2 billion for capacity improvements and potential acquisitions in 2022. The largest chunk (about $1.3 billion) is earmarked to expand and improve fluid milk operations and for potential fluid milk acquisitions. About $527 million will go toward expanding and upgrading milk powder manufacturing lines and potential acquisitions in the milk powder space. Yili also expects to spend nearly $90 million on innovation projects and international expansion, with a focus on Southeast Asia. The company’s yogurt division is getting $24 million, and almost $200 million will go toward projects in mineral water, plant-based protein products, functional products and foods for special medical purposes. (USDEC China office)

After more than three decades, McDonald’s is completely pulling out of Russia. Citing the humanitarian crisis in Ukraine and an unpredictable operating environment, the burger giant is selling its entire portfolio of 850 restaurants in Russia (some of which are licensed) to Russian licensee Alexander Govor. Govor operates 25 McDonald's units in Siberia. All units will be de-branded, although the company will retain the McDonald’s trademark in Russia. The company expects to write-off up to $1.4 billion due to the exit. McDonald’s had temporarily closed its company-owned Russian locations in March after Russia’s invasion of Ukraine. Analysts expect other Western chains to follow suit and completely sever ties with the country. (Bloomberg, 5/16/22; Reuters, 5/16/22; Restaurant Dive, 5/16/22)

Italian dairy processor Granarolo acquired a 51% stake in Italian start-up White & Seeds. White & Seeds sells yogurt, protein bars, spreads and other protein-enhanced snacks and foods. … Australian dairy manufacturer Nature One Dairy bought the Hong Kong adult nutrition powder business of Fei Fah Medi Balm, including the Ripple and White H20 brands. Nature One expects the deal to bolster its presence in Hong Kong and China. Even though it plans to transfer production of Fei Fah Medi Balm products from a third-party contract manufacturer to its own milk powder plant in Victoria, the Hong Kong business will remain a standalone operation. (FoodBev.com, 5/16/22; DairyReporter.com, 5/16/22)

Upstate Niagara Cooperative selected Kevin Ellis as its new CEO, replacing retiring chief executive Larry Webster. Ellis, currently CEO of Cayuga Milk Ingredients, will assume the position no later than Sept. 6, 2022. … France’s Bel Group separated the roles of chair and CEO. Current Chairman and CEO Antoine Fiévet named Cécile Béliot (deputy managing director since 2019) as the new CEO. Fiévet will remain chair. (Company reports; Livingston County News, 514/22) 

A week after McDonald’s sold its operations in Russia and exited the country, Starbucks announced it would “no longer have a brand presence” in Russia and Arla Foods said it sold its Russian operations to local management. Both Starbucks and Arla suspended all operations in the market in March. The coffee retailer has been in Russia for 15 years, building its network to 130 stores—all of them franchised. The company did not indicate the cost of the closures but did say it would continue paying its nearly 2,000 employees in Russia for six months and help them find new jobs. Arla had already reduced its business in Russia in 2014 after the country banned all European dairy exports. The company said its remaining holdings in Russia were primarily warehouses. (CNBC, 5/23/22; just-food.com, 5/18/22)

Japan’s Meiji is significantly increasing its presence in mainland China. The company is spending more than $370 million to build new production facilities in Tianjin, Guangzhou and Shanghai. The Tianjin facility will manufacture fluid milk and yogurt; the company did not identify the products for the other two plants, but it did also say it was planning to re-enter the Chinese infant formula market after exiting the business nine years ago. (USDEC China office)

U.S. ice cream giant Wells Enterprises plans to spend $70 million to add production lines and upgrade equipment at its Le Mars, Iowa, facilities. The project follows a string of acquisitions and investments that began in 2019 and added plants in New York, New Jersey and Nevada to the Wells manufacturing network. The company says the new project aims to “optimize our manufacturing footprint and help set us up for future growth.” (Des Moines Register, 5/20/22)

French dairy behemoth Lactalis acquired Australian yogurt-maker Jalna Dairy Foods. The acquisition includes a plant in Melbourne and a dairy farm in northern Victoria. (just-food.com, 5/21/22)

Vertically integrated Qatari dairy company Baladna expects to complete evaporated milk and butter processing additions to its Qatar manufacturing plant in early 2023. (USDEC Middle East/North Africa office) 

Arla Foods officially opened its new milk powder dryer at its site in Pronsfield, Germany. The €190-million (about US$204-million) project is Arla’s biggest single dairy investment to date. The main portion of the project, a new 51-meter-high drying tower, can produce up to 90,000 MT of milk powder annually. The company said it expects the addition to “expand our business in international markets such as the Middle East, West Africa and Southeast Asia.” The company earlier said it is targeting international branded volume growth of 5-7% per year. (Company reports)

Brazilian dairy processors Betania Lacteos and Embare Industrias Alimenticias are merging. The new combined entity, Alvoar Lacteos, will have sales of about R$4 billion (about US$840 million), nine manufacturing plants and 13 distribution centers. … Interest in Reckitt Benckiser Group’s infant nutrition unit is reportedly low. Only a “small number” of private equity funds submitted bids, according to press reports, with others waiting to see how the current U.S. formula shortage shakes out. The company had been seeking offers by the end of May, but there is no timeline for a potential sale. (Valor Economico, 5/27/22; Bloomberg, 5/27/22)

Chinese regulators granted domestic infant formula maker Feihe a permit to make and market lactoferrin. The company already built the lactoferrin processing line; it did not provide information on capacity. … The state-owned Oman Food Investment Holding Co. plans to spend $950 million on 23 food-related projects over the next five years, including an expansion at Oman’s Mazoon Dairy. … The UK’s Müller Milk & Ingredients promoted COO Rob Hutchinson and Commercial Director Liam McNamara to the roles of joint CEOs, replacing outgoing leader Jon Jenkins. (USDEC China office; USDEC Middle East/North Africa office; FoodBev.com, 5/30/22)

Dutch dairy giant FrieslandCampina is selling most of its German dairy business to German dairy processor Unternehmensgruppe Theo Müller. The deal includes the brands Landliebe, Tuffi, Südmilch, Puddis and Mondelice, various private labels in Germany, the foodservice brand Gastro, and production facilities, warehouses and distribution centers in Heilbronn, Cologne and Schefflenz. FrieslandCampina will focus instead on marketing its international brands in Germany, including cheese brands Frico, Holland Master and others, Chocomel beverages, private label products produced outside Germany, and its Valess dairy and meat alternatives. It will also maintain its physical presence in Germany with its Kievet operations in Lippstadt and DFE Pharma business in Goch and Nörten-Hardenberg. FrieslandCampina will continue to collect and process milk from its member farmers in Germany. Müller will take over the supply contracts of non-member milk suppliers. (Company reports)

Dutch dairy giant FrieslandCampina said that it had concluded a strategic evaluation of its Friso infant formula operations and the business will remain part of the company’s portfolio. FrieslandCampina’s Specialized Nutrition division will manage the Friso brand with a sharpened focus on China, Greece, Malaysia, Mexico and Vietnam, as well as on digitalization and innovation in the premium formula segment. (Company reports)

New Zealand’s Fonterra Co-operative Group is consolidating its Africa, Middle East, Europe, North America (AMENA) business and its Asia Pacific (APAC) business into a single operating unit. Current APAC CEO Judith Swales will lead the new division with AMENA CEO Kevin Wickham leaving the company. The move is part of Fonterra’s effort to adapt its structure to account for planned divestments of its businesses in Brazil and Chile, its exit from Russia and the movement of its Active Living business to another new unit called Innovation and Brand. The co-op named Komal Misty-Mehta head of Innovation and Brand, which will seek to commercialize Fonterra’s innovation and R&D expertise. (Company reports)

Moroccan cheese processor Oland Group inaugurated four new manufacturing lines at its plant in Casablanca. The company says the $8-million investment will help increase capacity enough to not only serve growing domestic demand but also build export markets in Africa, the Middle East and North America. … Ireland’s Kerry Group officially opened the Kerry Kenya Application and Development Center in Nairobi, marking the latest in a series of African investments over the past year. The new R&D facility follows last month’s opening of a $38-million “taste manufacturing facility” in South Africa and the December 2021 acquisition of Kenyan flavor manufacturer Afribon. Kerry said the investments exemplify company-wide efforts to create “a world of sustainable nutrition.” … Canada’s Agropur is investing C$34 million (about US$26 million) in its ice cream and frozen novelties plant in Truro, Nova Scotia. (USDEC Middle East/North Africa office; Company reports; FoodBev.com, 6/20/22; Business Today, 6/17/22)

The Kroger Company is investing $70 million in expanding its Newark, Ohio, dairy facility with the introduction of an aseptic milk line. The expansion will support the production of half and half milk, heavy whipping cream, coffee creamers and its Carbmaster beverage. … Azelis has announced opening a food laboratory in Cairo, Egypt, as part of its efforts to expand its food and nutrition presence in the Middle East and Africa. The new facility will primarily focus on dairy and beverages. … Mill Haven Foods, a Wisconsin-based provider known for its flavoring and product development expertise, has been acquired by Select Milk, based in Texas. … Danone Manifesto Ventures has led a $7 million Series A funding round for Symbrosia, a startup that has developed an emissions-reducing feed additive for cattle. Danone’s funding of Symbrosia supports its effort to achieve net zero carbon emissions by 2050. … Metro Pacific Investments Corp. in the Philippines is acquiring a controlling stake in dairy firm Carmen’s Best Group. The partnership aims to expand the operations of Carmen's Best Group's dairy farm and dairy products manufacturing facilities. … Modern Farming (Group) Co., Ltd., a Chinese dairy husbandry company, formed a joint venture with Rixin Group, a financial enterprise in Inner Mongolia. … Yashily, a subsidiary of China’s Mengniu Group, is planning to construct a new milk powder factory in Hohhot, with an investment of US$149.3 million. … (FoodBev.com, 6/27/22; Madison Media Partners/madison.com, 6/28/22; Food Dive, 6/27/22; Manila Bulletin, 6/27/22; USDEC China office) 

Australian dairy, meat and nutritional foods manufacturer Beston Global Food signed a long-term supply agreement with Thai food and beverage company KCG Corp. KCG will become the exclusive importer and distributor of Beston cheddar, mozzarella, butter, whey and other products in Thailand, helping increase penetration into Southeast Asian markets. Beston and KCG have already collaborated on the development of a mozzarella product designed specifically for regional taste preferences and applications. KCG will also take a 12% stake in Beston for A$10 million (about US$6.8 million). KCG distributes, manufactures and markets an array of foods, including dairy products, supplying major supermarkets and convenience stores like Tesco and 7 Eleven. Beston also announced that it had signed new cheese supply contracts in Japan, representing about 20% of the company’s annual mozzarella output. (USDEC Southeast Asia office; just-food.com, 6/23/22)

Shortly after Unilever announced that it was selling its Ben & Jerry’s business in Israel to local licensee Avi Zinger, Ben & Jerry’s independent board filed a lawsuit to block the sale. Controversy has surrounded Ben & Jerry’s business in Israel since last summer when the company said it would stop selling products in Jewish settlements in the West Bank and East Jerusalem because it considered the occupation illegal and contrary to the company’s social mission. Under terms of the proposed sale, Zinger would market Ben & Jerry’s products under Hebrew and Arabic names throughout Israel and the West Bank. Ben & Jerry’s claims Unilever decided to sell without approval of its independent board, which is responsible for “safeguarding the integrity” of the brand. (CNBC, 7/5/22; Wall Street Journal, 6/30/22)

Exhibition Investments submitted a bid to acquire a 34% stake in Egyptian dairy processor Arab Food Industries Co., also known as Domty. The Damati family, which controls a 56% share of Domty, also owns minority stakes in Exhibition. (Enterprise, 7/4/22)

Denmark-based Arla Foods is reportedly spending €41 million (about US$42 million) to expand production of ready-to-drink coffee beverages at its plant in Esbjerg, Denmark. The company said the expansion is needed to meet global demand growth. Arla signed a contract to produce and distribute Starbucks brand coffee drinks in 2010 that was eventually extended through 2039 … Representatives from Ireland’s Glanbia Co-op and Dutch dairy processors Royal A-ware broke ground on their long-delayed joint-venture cheese plant in Belview, Ireland. The plant will produce more than 50,000 MT of cheese per year, including gouda, edam and emmenthal … Indonesian bakery firm PT Nippon Indosari Corpindo plans to enter the dairy sector with packaged milk and other products. The company will contract with a third-party manufacturer on the product lines. (USDEC Southeast Asia office; Irish Farmers Journal, 6/22/22; just-drinks.com, 6/20/22)

Based on a cross-section of new product rollouts in the first half of 2022, global dairy companies are squarely focused on health and wellness. Fonterra is a prime example. In May, Fonterra announced it was sharpening its focus on the global health and wellness market with value-added ingredient solutions. The company said it plans to launch consumer products over the next few months that improve cognition and eyesight and reduce stress, with a major focus on brain health. “We know that health and wellness, immunity and cognitive health are very much on the agenda for consumers,” said Judith Swales, who heads Fonterra’s new consolidated Asia Pacific and Africa, Middle East, Europe, North America business unit. “COVID has brought that into real focus for consumers.” Fonterra trademarked three brand names for the new products:

• ThinkSharp, which includes the nutrient phosphatidylserine, said to support memory, focus, mental processing and creativity.
• Pro-Sight, which blends lutein, zeaxanthin, vitamin A and riboflavin and reportedly supports eye health.
• Stres-Les, which contains vitamin C, riboflavin and vitamin B6 to help stabilize moods, improve sleep and encourage better focus.

The company is looking for a partner to help bring the products to market. In June, Fonterra created a new “Innovation and Brand” business unit to better capitalize on its product development resources. The company plans to increase its R&D budget by more than 50% to NZ$160 million per year (about US$100 million) by 2030.

Here are some other first-half releases from multi-national and local dairy companies.

• In Pakistan, Nestlé introduced Nestlé Bunyad Iron+ milk powder to address widespread childhood iron deficiency in the country. The product was developed in cooperation with the Nestlé Research Center Switzerland and New Zealand’s Massey University and is fortified with iron, vitamins A and C, and calcium. The company claims the proprietary iron used in the products is absorbed better by the body.
• In Eastern and Southern Africa, Nestlé rolled out Nestlé Everyday milk powder formulated to address micronutrient deficiencies in children and adults. Manufactured locally, Everyday features calcium, iron, vitamins and zinc “to help build and strengthen immunity for the whole family,” the company says.
• In Singapore, Fonterra launched Nurture probiotic cultured milk drinks in three flavors: Manuka honey, boysenberry and apple, and golden kiwi and strawberry. The company says the low-sugar drinks enhance digestive balance and support immunity. It also debuted its Anchor wellness range of milk powders, which includes Anchor Protein Plus (billed as having 25% more protein than regular milk), Anchor Immune Plus (with what Fonterra says contains immunity-boosting ingredients like iron, zinc, and vitamins A, D and C) and Anchor Digestive Plus (enriched with dietary fiber, prebiotics and zinc).
• Fonterra-backed German food startup Foodspring introduced Coco Whey in Thailand. The product is described as a cross between coconut water and a protein shake. It contains 20g of whey protein, natural sugar and zero fat and comes in mango and pineapple flavors.
• Danone Nutricia launched three nutritional drink powders under the Dare to Stride brand targeting consumers over 40 years old. Danone tailored the products to different dayparts: morning, afternoon and evening. The morning powder features probiotics, dietary fiber and vitamin C; the afternoon variety features whey protein, amino acids and collagen; and the evening product contains amino acid gamma-aminobutyric acid (GABA), and omega-3 fatty acids eicosapentaenoic acid (EPA) and docosahexaenoic acid (DHA).
• China’s Yili Group said it was increasingly focusing on developing functional products designed to meet the needs of health-conscious consumers, with a special focus on kids and the middle-aged and elderly population. The company is exploring the potential health benefits of certain beneficial bacterial strains it believes can help in weight management, blood sugar control and digestive health. One of Yili’s latest rollouts is a lollipop-shaped cheese snack for children fortified with Bifidobacterium longum, vitamin D and probiotics. The company said it contains 9g of protein and 750mg of calcium per serving. (USDEC Southeast Asia and China offices; Company reports; FoodBev.com, 6/6/22; Stuff.co.nz, 5/20/22; BeverageDaily, 426/22)

Yili Group has opened a dairy facility in Hohhot, China, which will be used as a production base for liquid milk, infant formula and cheese. The company says it aims to build a “Dairy Silicon Valley” that will be the “world’s largest” site of its kind and serve as a global hub for the dairy and health industries. Located at the Global Smart Manufacturing Industrial Park, the facility will produce liquid and powder milk. The liquid milk production base received a total investment of CNY or RMB $5 billion (approx. US$741 million) and will process 6,500 tons of fresh milk daily. Meanwhile, Yili invested CNY or RMB $3 billion (approx. US$445 million) into its milk powder production base, which will have an annual production capacity of 60,000 tons, feeding 1.28 million infants annually. The new site is expected to create jobs for more than 350,000 people. (FoodBev.com, 7/19/22)   

Vietnam dairy company Vinamilk recently imported more than 1,000 dairy cows from the United States for a new organic cow farming resort complex based in Xiengkhouang province in Laos. The herd is expected to produce an average milk yield of over 10,000 liters per head each year, equivalent to between 38 and 40 liters per day. (USDEC Vietnam Office)

Bel Brands USA and Dairy Farmers of America are extending a partnership designed to invest in innovative new ways to improve on-farm sustainability practices and reduce farms’ environmental footprints. Last year, Bel Brands and DFA partnered to support the adoption of energy-efficient and cost-effective on-farm milk cooling methods at a DFA member dairy farm in Iowa that supplies milk to Bel Brands, which resulted in a 6% reduction in electricity used on the dairy, while milk production increased 4%. Bel and DFA now plan to supply a small DFA member dairy farm in South Dakota with equipment normally thought only to be useful on a larger dairy, testing the viability of the equipment to promote cost-effective and sustainable practices that can be replicated on other U.S. dairy farms in the future. (Progressive Dairy, 7/20/22)  

Ellsworth Cooperative Creamery held the official grand opening of its new 60,000-square foot specialty cheesemaking facility in Menomonie, Wisconsin, last week. The new facility replaces the cooperative’s Comstock Creamery and is part of a plan to grow its distribution of specialty cheeses nationally and internationally. … Challenge Butter, a wholly owned subsidiary of California Dairies Inc., launched Challenge Butter Snack Spreads. As consumers seek easier ways to add fast flavor to meals and snacks with fresh ingredients, Challenge Butter designed these Snack Spreads for topping, dipping, spreading, slathering, sauteing and more. … Bel Group and Polmlek have reportedly signed an agreement to sell Bel’s stake in Moroccan dairy producer Safilait, and the Tarmast farm that supplies it. … Meanwhile, Bel Group and Superbrewed Food have entered into a strategic partnership to create a line of cheese products incorporating SuperBrewed’s postbiotic cultured protein. Bel selected Superbrewed’s protein ingredient due to its quality, lower environmental impact and functionality. … Software company Milk Moovement has secured $20 million in a Series A funding round as it looks to accelerate the adoption of its technology among dairy businesses in North America. Milk Moovement's technology platform creates full supply chain visibility for dairy farmers and distribution partners to track and route shipments in real-time and optimize delivery schedules. (National Milk Producers Federation News Alert, 7/19/22; Dairy Foods, 7/12/22; FoodBev.com, 7/15/22, 7/11/22, 7/13/22) 

China’s Yili Group officially opened two new dairy manufacturing plants. A new US$445-million milk powder facility in Hohhot, Inner Mongolia, can produce 60,000 MT per year. Yili’s New Zealand subsidiary Westland Milk Products unveiled its expanded butter plant in Hokitika on the South Island. The NZ$40-million (about US$25 million) upgrade doubles the plant’s annual consumer and foodservice butter capacity (including small-format butter pats) to 42,000 MT. Westland plans to market the additional butter worldwide. (USDEC China office; Company reports)

Dutch dairy giant FrieslandCampina made two significant moves to reorganize its Asian operations. Citing “intense competition,” the company closed its Foremost pasteurized milk plant in Bangkok. FrieslandCampina said it would instead focus on long-life dairy products for the Thai market, including long-life milk under the Foremost and Falcon brands. In China, FrieslandCampina sold a production plant in Xiushui to leading Chinese dairy firm Yili Group. The Xiushui facility manufactures infant formula under the Zi Mu brand as well as non-dairy creamers. The company said the sale is part of a decision to focus its Chinese infant formula business on the Friso brand. (USDEC Southeast Asia office; just-food.com, 7/22/22)

French dairy giant Lactalis reportedly purchased Italian cheese specialist Ambrosi, which operates four manufacturing facilities in Italy and subsidiaries in the UK, U.S. and France. Lactalis purchased a 25% stake in Ambrosi from Swiss dairy group Emmi and the remainder from the Ambrosi family, which owned the remaining 75%. Emmi said it sold its share in Ambrosi because classic Italian cheeses no longer align with its core cheese range. (Company reports; EFA News, 7/26/22; European Supermarket Magazine, 7/25/22)

Global dairy processors continue to expand their portfolios to reach a broader range of consumers looking to incorporate plant-based products into their diets. In the first half of 2022, several companies announced developments in the dairy-alternative sector, including industry giants such as Danone, Bel Group, Nestlé and others. Notable themes in this trend include entering new avenues via partnerships, expanding plant-based milk alternatives and dairy-like product lines, and a focus on international growth.

• Bel Group announced a partnership with the fermentation startup Superbrewed Food to develop a line of both dairy and plant-based cheeses with Superbrewed’s Postbiotic Cultured Protein. Bel expects to launch their full range of cheeses to domestic U.S. consumers once Superbrewed supplies the protein from its Delaware facility (expected in 2023).
• In July, Danone launched a new infant formula product, Dairy & Plants Blend, that marries its traditional dairy recipe with added plant-based nutrition for consumers looking for more options that suit vegetarian, flexitarian and plant-based diets. The product contains a blend of 60% plant protein and 40% dairy protein. The first release is scheduled in the Netherlands under the Nutrilon brand, with others to follow later this year under the company’s global Aptamil
• In June, Nestlé introduced a new plant-based drink for toddlers called Little Steps Plantygrow Plant-Based Growing Up Drink. Marketed as part of Nestlé’s SMA Baby line, the product contains proteins from wheat, oat, barley, rye and corn. Plantygrow is the latest in a company-wide dairy-alternative trend. In addition, Nestlé launched two oat-based milk alternatives in China in May: Oh Oat! (a consumer product) and Barista Edition (a product aimed at coffee and tea shops and foodservice venues). The company also expanded distribution of a plant-based version of the chocolate malt beverage Milo (extended to Thailand in April) and the release of 100% oat milk-based coffee capsules in Taiwan in May.
• Netherlands-based FrieslandCampina expanded its portfolio twice this spring. The company launched its first plant-based product made from oats in June. Barista Oat is part of the Friesche Vlag line and targets coffee drinkers. In May, the company announced it was joining forces with De Nieuwe Melkboer (The New Milkman) to develop a local supply chain of plant-based dairy alternatives to bridge the gap between locality and accessibility of plant-based protein.
• Saudi Arabia’s SADAFCO introduced what it claims is the first locally produced oat-based milk alternative. The company says Saudia Oat Milk targets consumers looking to increase their vitamin and fiber intake. SADAFCO previously rolled out a soy-based milk alternative. (USDEC China office; USDEC Middle East/North Africa office; Company reports; Vegconomist, 7/7/22; China Food Press, 5/13/22)

Dairy Farmers of America acquired two ESL processing facilities from  SmithFoods. The plants—in Richmond, Indiana, and Pacific, Missouri—produce ESL dairy and non-dairy beverages, ice cream and shake mixes for the retail and food service channels … Australia’s Beston Global Food reported that it has contracted to sell all 16.6 MT of lactoferrin it expects to produce at its new Jervois, South Australia, plant in fiscal 2023 (July 2022-June 2023), mainly to local and international infant formula companies … New Zealand’s Synlait Milk shuffled its leadership team to increase focus on ingredients, advanced nutrition and foodservice. A new dedicated foodservice business will concentrate on opportunities in the Chinese market. (Company reports; Kansas City Business Journal, 8/3/22)

Saputo is investing C$45 million (about US$35 million) to convert its mozzarella cheese facility in Reedsburg, Wisconsin, into a goat cheese manufacturing plant. Reedsburg’s current mozzarella capacity will transfer to existing facilities in Saputo’s network. In conjunction with the project, Saputo plans to close its existing goat cheese plant in Belmont, Wisconsin. The changeover will begin in the current fiscal quarter and take 18 months to complete. The company said the changes are part of its ongoing network optimization program. (Company reports)

France’s Bel Group purchased a 70% stake in Chinese cheese company Shandong Junjun Cheese. Founded in 2017, Shandong Junjun operates primarily as a co-manufacturer, with a factory and R&D facilities in northeastern China. Bel said the deal will help expand its portfolio, strengthen its manufacturing footprint and increase its scale in the Chinese market. (USDEC China office; Company reports)

Fonterra Co-operative Group plans to close its Brightwater, South Island, WMP plant in April 2023. The facility handles less than half a percent of the company’s annual milk supply, and production will initially transfer to Fonterra’s Darfield site. But the move aligns with Fonterra’s long-term strategy to channel more milk to its foodservice and consumer businesses and less into commodity ingredients as New Zealand’s milk supply is expected to decline over time. ... Thailand’s Loxley Trading Co. signed a five-year agreement to distribute Nongpho UHT dairy products from Thailand’s Nongpho Dairy Cooperative. Loxley was Nongpho’s long-time distributor before the co-op ended the partnership in 2017 to set up its own distribution network. Nongpho said it expects the renewed relationship to accelerate its reach. (USDEC Southeast Asia office; Company reports; Radio New Zealand, 8/1/22)

Lactalis is converting its fluid milk processing plant in Sudbury, Ontario, Canada, into a plant-based manufacturing facility. The company plans to halt dairy production as of Sept. 30. Lactalis cited the reason for the switch as “long-term volume decline and increased costs in the fluid milk market in Ontario that have led to decreased profitability and economic sustainability.” Lactalis has not announced what type of plant-based products the revamped plant would make, but the company already produces a handful of dairy alternatives, including Sensational Soy soy-based beverage, Siggi’s coconut-based yogurt alternative and Lactantia margarine. (CBC News, 8/16/22; Northern Ontario Business, 8/15/22)

McDonald’s plans to begin reopening restaurants in Ukraine over the next few months. It had closed all 109 Ukrainian stores after Russia’s invasion in March. The company did not say how many units would reopen. The McDonald’s announcement follows a Yum Brands statement earlier this month that it had reopened “nearly all” of its Ukrainian KFC and Pizza Hut stores. (Company reports; Reuters, 8/11/22)

Beijing Sanyuan Foods purchased the remaining 40% stake in probiotic beverage maker Taizinai, based in Hunan Province. Sanyuan said the purchase, which gives it complete control over Taizinai, will help expand its business in southern China and increase market share in the lactic-acid beverage category. ... Chicago-based Mexican-style cheesemaker V&V Supremo Foods purchased Wisconsin’s Mill Creek Cheese. (USDEC China office; Company reports)

Unilever is investing 5.5 billion pesos (about US$276 million) to expand ice cream and food production and export capacity at its plants in Tultitlán and Lerma, Mexico. The Tultitlán plant makes ice cream and condiments. Lerma manufactures 250 different products, including broths and soups. (CE Noticias Financieras, 8/16/22)

Higher dairy commodity prices in 2021 helped lift the combined turnover of the world’s largest dairy companies by 5% in euro terms (or 9% in dollar terms, due to shifting exchange rates), according to Rabobank’s annual list of the Global Dairy Top 20. Lactalis easily held onto the No. 1 position, increasing its lead over No. 2 Nestlé to $5.4 billion ($3.2 billion more than the previous year). The biggest mover on the list was India’s Gujarat Cooperative Milk Marketing Federation (Amul) which jumped from 18 to 13 based on a 19% increase in revenues. Also moving up were China’s Mengniu, rising from No. 9 to No. 7; French processors Savencia (from 14 to 12) and Sodiaal from (17 to 14) and Germany’s Müller, which rose from 20 to 17. Organic growth helped propel Amul and Mengniu, with Müller and Savencia boosted by acquisitions. There was one new addition to this year’s list. UK-based ice cream giant Froneri joined at No. 20, as Kraft Heinz fell off the list after the sale of its U.S. natural cheese business.

Australia-based Domino’s Pizza Enterprises (DPE) plans to purchase 100% stakes in Domino’s pizza businesses in Malaysia, Singapore and Cambodia. DPE is paying an estimated 660 million ringgit (about US$147 million) to acquire corporate-owned 287 outlets across the three countries. … Australian dairy- and plant-based food company Noumi (formerly Freedom Foods) is selling its stake in Australia Fresh Milk Holdings (AFMH) for A$29 million (about US$20 million) to two existing AFMH shareholders. It pursued the deal to help pay for a court settlement with Blue Diamond Growers over use of the Almond Breeze milk-alternative brand. (Company reports; USDEC Southeast Asia office)

New Zealand's Fonterra Co-operative Group and Dutch bioscience firm Royal DSM are establishing a new start-up company to develop and commercialize fermentation-derived proteins with dairy-like properties. The two companies have been working together on how to use fermentation technology to produce such proteins since 2019. ... A judge for the Southern District of New York denied a petition filed by Ben & Jerry’s independent board members to stop parent-company Unilever’s plan to transfer Ben & Jerry’s assets in Israel to a local Israeli licensee. A lawsuit to stop the sale is pending. (Company reports; Wall Street Journal, 8/22/22)

Glanbia Ireland and Glanbia Co-op have changed their name to Tirlán. A combination of the Irish words “tir” meaning “land” and “lán” meaning “full,” the new name translates to “land of abundance.” The change comes after last December’s vote by the co-op to acquire the remaining 40% of Glanbia Ireland from Glanbia PLC. Tirlán is Ireland’s largest milk processor, sourcing from 6,000 family farms and owning 11 manufacturing facilities. Annual sales are about €3 billion (about US$3 billion). (Irish Independent, 8/31/22)

Kerry Group is paying $108 million to acquire Kraft Heinz’s business-to-business powdered cheese operations. The deal includes Kraft Heinz’s Albany, Minn., manufacturing plant. … Ireland’s Arrabawn Co-operative Society plans to halt liquid milk operations at its plant in Kilconnell, County Galway, by summer 2023. Fellow Irish dairy co-op Aurivo Co-operative Society will purchase Arrabawn’s liquid milk contracts, but Arrabawn will maintain ownership of the facility. Arrabawn said it is looking at alternative uses for the plant. (Company reports; Agriland, 8/26/22)

Qatari food, beverage and entertainment company Aura Group plans to open 36 new high-end dining options—a mix of homegrown brands (like Balhambar) and high-end globally-known operations (like Beefbar and Carbone)—across Qatar over the next three months. The company is looking to serve anticipated demand from the upcoming FIFA World Cup slated to begin Nov. 20. (USDEC Middle East/North Africa office)

Bord Bia, Ireland’s state agency tasked with promoting ag exports, launched a €3.2 million (about US$3.2 million since euro currently near parity with U.S. dollar) promotional campaign to boost Irish dairy exports in Japan, Malaysia, the Philippines, Thailand and Vietnam. The program kicked off last week with special technical seminars in Tokyo. Bord Bia plans to target 10,000 Asian food and beverage company buyers through the campaign, which will include visits by Asian buyers and media to Irish dairy farms and processing operations. The group says it expects the effort to lift Irish dairy exports to the targeted group of countries by nearly €19 million. (Agriland, 9/1/22)

Fonterra Co-operative Group opened its upgraded dairy foodservice application center in Beijing. It operates four such centers in China in Beijing, Chengdu, Guangzhou and Shanghai where it develops recipes for customers in all distribution channels using Fonterra ingredients and dairy products. … Mexican restaurant operator Alsea plans to open 200 new Starbucks stores in Mexico by 2026. … UAE dairy processor Al Ain Farms is partnering with ecommerce site DUBUY.com to market its dairy products in the UAE and throughout the Middle East and Africa. … Philippine food and dairy company RFM Corp. earmarked 1.2 billion pesos (about US$21 million) to expand fluid milk operations and institutional business. (USDEC China office; USDEC Mexico office; USDEC Middle East/North Africa office; USDEC Southeast Asia office)

Darigold broke ground on its $600-million dairy facility in Pasco, Washington. Originally announced last summer, the Pasco facility, when fully operational, will produce about 80,000 MT of butter and around 125,000 MT of milk powder annually, including high-spec powder for infant formula. The plant will service domestic and export markets. Darigold also strengthened its global leadership team to support its rapidly growing international business. Kevin Quinn was named vice president of global sales and will lead global manufacturing, account engagement and market development for Darigold’s Class III and IV businesses. Mariana Lezama and Batthew Pang were named managing directors of the coop’s offices in Mexico City and Shanghai, respectively. Lezama will represent Darigold’s complete portfolio and overseas business execution for all of Latin America. Pang will represent all of Darigold’s product portfolio in North Asia. (Company reports)

New Zealand’s Fonterra Co-operative Group launched what it is calling a new “wellbeing nutrition solutions” brand called Nutiani. The brand will focus on three wellbeing categories—physical, inner and mental—with ingredients including lactoferrin, probiotics and lipids. Products tailored to the physical would address conditions such as muscle health and sarcopenia, mobility, weight management and malnutrition. Inner would include immunity, digestive health and metabolic health. Mental would address cognitive health, stress, mood and sleep. The global market for physical, mental and inner wellbeing nutrition is growing at 6.1% per year, while medical nutrition is expanding at 5% annually, Fonterra said. Together, the two markets are currently worth about US$116 billion. “There’s no doubt that people are paying more attention to wellbeing and managing it through diet,” said Komal Mistry-Mehta, Fonterra’s chief innovation and brand officer. “Research shows that 96% of consumers actively manage their wellbeing, with more than half of these consciously managing their diet to improve their wellbeing.” The company says it plans to work with customers to accelerate innovation and respond to rapidly evolving consumer demands, with a focus on the Asia-Pacific region. (Company reports; DairyReporter.com, 9/12/22)

Swiss dairy processor Emmi replaced a 40-year-old cheese building at its Emmen, Switzerland, manufacturing site with a new CHF50-million (about US$52 million) specialty cheesemaking operation. The new facility, which opened last week, can produce 10,000 MT per year of varieties such as Luzerner Rahmkäse. Emmi said it made the investment to serve long-term rising demand in domestic and export markets. (Company reports)

Nestlé said it is exploring emerging technologies for the development of animal-free dairy protein-based products. It plans to pilot a novel product through its newly established U.S. R+D Accelerator later this year. The initial product will use a fermentation-derived protein made by animal-free protein pioneer Perfect Day. … Starbucks said it expects sales in China to nearly double over the next three years as it adds about 3,000 new stores to the country. (Company reports; Wall Street Journal, 9/14/22)

About 200 members of the Chilterra farmers’ union and the Mapuche indigenous community temporarily took over Fonterra’s Prolesur milk processing plant in Los Lagos, Chile, late last week. The group accused Prolesur and Fonterra of exploitation for what they considered unfair milk prices. Chilterra farms are a key Prolesur supplier. … Separately, Fonterra said efforts to sell its Chilean business were progressing, but it had decided to maintain full ownership of its Australian operations. ... Australian dairy processor Norco said it might be forced to permanently close its ice cream plant in Lismore, New South Wales. Heavy rains flooded the plant in March, causing A$142 million (about US$95 million) in damage, according to Norco estimates. The company has plans to rebuild, and the Australian government pledged $35 million toward the project, but Norco says it needs additional government funding. (Company reports; BusinessDesk, 9/16/22; ABC News, 9/14/22)

China’s Junlebao Dairy Group acquired Yinqiao Dairy, a fluid milk and milk powder processor based in Shaanxi Province … Massachusetts-based private equity firm Advent International purchased a 60% stake in Chinese restaurant firm Wagas Group. Wagas operates about 250 outlets in 13 cities, including Shanghai and Beijing under a variety of names, including Wagas, Baker and Spice, and LOKAL. (USDEC China office)

TGI Fridays plans to expand into South and Southeast Asia through master franchisor Universal Success Enterprises. The two companies aim to open 75 units over the next 10 years, adding $500 million in additional revenue. … Ireland’s Lakeland Dairies named Colin Kelly as group CEO designate. Kelly will officially take over in January 2023 when current group CEO Michael Hanley retires at the end of December. Kelly has worked in a range of senior finance and management positions at Ornua since 2011. … Unilever CEO Alan Jope announced plans to retire at the end of this year. Jope has been under pressure by activist investors and due to an aborted consumer-healthcare takeover earlier this year. Unilever said it would conduct a formal search for a successor. (USDEC Southeast Asia office; Bloomberg, 9/26/22; Agriland, 9/21/22)

The last two weeks have brought a spate of mergers, acquisitions and joint ventures around the globe. Here are a few of the notable ones:

• Denmark’s Arla Foods and China’s Yashili agreed to restructure their infant formula partnership. Yashili has been selling Arla formula under a distribution agreement inked in 2016. Now, the Danish dairy giant will assume sales, marketing and distribution operations for the brands that Yashili built (including more than 80 employees) with the aim of doubling the business over the next five years. The company paid Yashili a transaction fee of €15 million (about US$15 million). Yashili will continue to focus on its own-brand products.
• New Zealand’s Westland Milk Products purchased Kiwi butter and cheese converter Canary Foods. Canary markets butter and cheese products to airline, hotel, foodservice and industrial sectors, exporting about 75% of its output. Westland said the acquisition would add value to its butter portfolio “by playing a greater role in the expanding global consumer butter and spread market.” (See Westland’s press release on the purchase.)
• Bubs Australia and China’s Heilongjiang Ubeite Dairy Group (HUG) signed a joint venture agreement to make and market goat’s milk infant formula in China. Bubs currently sells Australian-made formula exclusively through cross-border e-commerce platforms, which account for only 20%-25% of total Chinese infant formula sales. By linking up with a domestic manufacturer who will make the product in China, Bubs expects to navigate China’s strict infant formula import regulations more quickly and gain access to brick-and-mortar distribution channels.
• Lactalis Canada purchased the Khaas halal yogurt brand to meet rising demand from growing South Asian, Middle Eastern and North African populations in Canada. The company said it expects to expand its ethnic dairy portfolio in the near future with more specialty products, including cheeses. (Company reports; New Zealand Herald, 10/3/22)

India’s largest dairy cooperative, Gujarat Cooperative Milk Marketing Federation (Amul), is merging with a group of five other Indian cooperatives to form a “multi-state cooperative society.” A key reason for the merger is to create a dairy production group that can better target export markets, particularly regional markets like Bangladesh, Bhutan, Nepal and Sri Lanka, a major New Zealand dairy customer. India’s Cooperation Minister Amrit Shah called for the country to double milk production over the next five years to meet domestic and export demand, an extremely ambitious and highly unlikely goal. (Krishi Jagran, 10/10/22; India Infoline News Service, 10/10/22)

Danone is seeking a company to take over its Essential Dairy and Plant-based (EDP) business in Russia. Danone entered Russia in the early 1990s and built its position over the years, acquiring dairy processor Unimilk in 2010 to become one of the country’s largest processors. After Russia’s invasion of Ukraine, Danone halted all import, export and investment plans in Russia but maintained production of dairy and infant nutrition products to meet the essential needs of the population. This planned divestment is a more definitive step to cut ties with the country, although Danone will maintain control of its Russian specialized nutrition business, which includes infant formula. The EDP business includes 12 manufacturing plants and Russia’s No. 1 dairy brand, Prostokvashino. The business accounts for about 5% of Danone's net sales. Danone reports that the transfer could result in a write-off of up to €1 billion (about US$978 million). Danone sells products in Russia under both Russian brands and international brands like Activia, and it is unknown how any divestiture of the EDP business would address Danone’s global names. (Company news; FoodBev.com, 10/17/22; DairyReporter.com, 10/17/22; Bloomberg, 10/14/22)

Australia’s Bega Cheese is selling its 49% stake in the Vitasoy Australia plant-based-beverage joint venture to Vitasoy International, Hong Kong. Vitasoy is exercising its right to buy the Bega stake as part of a previous agreement. (just-food.com, 10/17/22)

Japan’s Meiji plans to open all three of its new dairy manufacturing facilities and one chocolate and biscuit plant in China in 2023. The company is building milk and yogurt plants in Tianjin and Guangzhou, an ice cream facility in Shanghai and the chocolate/biscuit operation in Guangzhou. … New Zealand’s a2Milk Co. renewed a distribution agreement with China State Farm Agribusiness Holding that will take the partnership through September 2027. … After signaling it might shut down the plant for good, Australian dairy co-op Norco is now moving ahead with plans to rebuild its Lismore ice cream factory that was destroyed in a flood earlier this year. The A$105-million price tag (about US$66 million) includes A$45 million in government funding and A$60 million of internal funding. (USDEC China office; Food & Drink Business, 10/7/22; ABC North Coast, 10/5/22) 

Foreign and multi-national dairy processors continue to invest in product innovation focused on addressing specific nutritional needs of populations. Here are a few notable recent rollouts.

• New Zealand’s Fonterra Co-operative Group launched a line of supplements under the name BioKodeLab that the company says supports cognitive performance and immune health. The line features three products, all of which contain buttermilk powder: Focus Plus, Calm Plus and Probiotic Plus. All three products contain a trademarked ingredient called Pro-Sight that Fonterra claims supports macular health. According to Fonterra, Focus Plus supports alertness and mental clarity, Calm Plus supports mood and stress response, and Probiotic Plus aids in digestion and immune health. (See biokodelab.com for more on the products.)
• Japan’s Megmilk Snowbrand and Kirin co-developed a yogurt drink containing a proprietary whey-protein-derived peptide, beta-lactolin. The companies claim the ingredient, produced by Kirin, supports cognitive functioning, including memory and attention. Megmilk Snowbrand rolled out the product in Japan in September.
• The UAE’s Al Rawabi launched what it is calling the first locally produced fresh milk containing only A2 beta-casein. Also fortified with omega-3, vitamin D and calcium, the company developed the product to address consumer health concerns, including digestive issues.
• Danone added two new milk powders to its healthy-aging brand Ganmai in China. Ganmai MianYuLi senior milk powder contains probiotics and dietary fiber for gut health, as well as selenium and vitamin C. Ganmai XinRuiLi senior goat milk powder contains phytosyterol esters aimed at lowering cholesterol and four traditional homeopathic Asian ingredients: bitter gourd, mulberry, pueraria root and Solomon’s seal root. Both products feature a low glycemic index for customers managing their blood glucose levels.
• Nestlé expanded distribution of its Wyeth S-26 Ultima infant formula to China. Originally launched in Hong Kong in July, the product contains a series of ingredients that Nestlé says aid cognitive and behavioral development in infants. (USDEC Middle East/North Africa office; Company reports; NutraIngredients.com, 10/19/22, 10/18/22; DairyReporter.com, 9/21/22)

Yum! Brands is selling its KFC business in Russia to local franchisee Smart Service Ltd. The deal, which will sever Yum’s final ties with the country, includes more than 1,000 locations. Smart Service will be responsible for rebranding the stores. Yum sold its Russian Pizza Hut outlets to a local operator earlier this year. … Bega Cheese CEO Paul van Heerwaarden plans to step down in the coming months. Pete Findlay, the Australian dairy processor's current COO, will replace him. ... IHOP is expanding in the Middle East. After signing a deal in July to open its first five units in Saudi Arabia, it inked a second franchisee in September to enter Qatar with four new units. Parent Dine Brands International said it was seeking franchising arrangements to expand throughout the region. (USDEC Middle East/North Africa office; Company reports; Bloomberg, 10/24/22) 

Perrigo acquired Nestlé’s Gateway infant formula manufacturing plant in Eau Claire, Wisconsin, along with the U.S. and Canadian rights to the Good Start infant formula brand. Perrigo said it would immediately invest $60 million to expand the plant’s capacity from about 13,000 MT per year to more than 16,000 MT per year. … Hong Kong-based infant nutrition company Ausnutria Dairy acquired a 50% stake in Dutch goat cheesemaker Amalthea. Amalthea and Ausnutria were already cooperating to make and market CleardMilk infant formula made from goat milk. (FoodBev.com, 10/26/22)

Abbott Nutrition is building a new $500-million U.S. manufacturing facility for “specialty and metabolic infant formulas.” The company is in the final stages of site selection. (CNN, 10/19/22)

Diario Financiero reports that four companies are in the running for Fonterra Co-operative Group’s Chilean Soprole business: Canada’s Saputo, France’s Lactalis, Peru’s Gloria Foods and an unnamed Chinese suitor. The selling price is rumored in the neighborhood of US$1 billion. … Britain’s First Milk will produce a specialized whey powder for Arla Foods Ingredients (AFI) under a new partnership agreement between the two companies. First Milk will manufacture AFI’s Nutrilac FO-7875, a microparticulate whey protein concentrate, at its First District Creamery facility in Aspatria, England. (Company reports; Diario Financiero, 11/4/22)

FrieslandCampina signed a 10-year sponsorship with the ASEAN Coffee Federation (ACF) as a founding partner and exclusive milk brand. FrieslandCampina will work with ACF’s educational arm to create a “Milk Science” training course for baristas aimed at elevating their skills, increasing coffee sales and ultimately raising dairy demand. … Fonterra reportedly signed cooperation agreements with a number of Chinese companies at this week’s China International Import Expo, including Milkground, Walmart, Want Want, Mondelez and Milkyway. Milkyway is a leading ingredient importer/distributor and will be Fonterra’s official partner for Nutiani, its “wellbeing nutrition solutions” brand. … Fonterra also agreed to pay A$25 million to settle a class action lawsuit brought by Australian dairy farmers six years ago. Farmers claimed a farmgate milk price cut at the time was a breach of contract. The settlement includes no admission of liability. … Malaysian food and beverage company Fraser & Neave Holdings plans to nearly quadruple capital spending in 2023 to RM700-800 million (about US$150-170 million). The money is earmarked primarily for expanding fresh milk processing operations. … Egyptian dairy and juice manufacturer Beyti plans to invest US$9 million next year to expand plant capacity after spending the same amount this year. The company added six new production lines in 2022 bringing its total number of lines to 25. (USDEC Southeast Asia office; USDEC China office; USDEC Middle East/North Africa office; Radio New Zealand, 11/4/22; Zawya, 10/31/22)

Fonterra Co-operative Group sold its Soprole business in Chile to Peruvian dairy and food processor Gloria Foods for 591 billion Chilean pesos (about US$662 million). Fonterra had been seeking to divest the Chilean business since late 2021 as part of an ongoing restructuring to focus on its New Zealand milk supply. Fonterra and Gloria have a long-standing business relationship in South America. (Company reports)

Nestlé opened a new R&D center in Santiago, Chile, “to innovate closer to consumers in the region,” the company said. It plans to use the facility, which is located in Nestlé Chile headquarters, to collaborate more closely with universities, start-ups and entrepreneurs across Latin America. The R&D center will focus on strategic product areas, including affordable nutrition, sustainable dairy, chocolate, plant-based products, biscuits and coffee. (Company reports)

Cayuga Milk Ingredients is spending $150 million to expand and enhance its Aurelius, New York, manufacturing plant. The project includes a 130,000-sq-ft. aseptic processing and bottling operation, new milk receiving bays and upgraded wastewater treatment infrastructure. When completed, it will be able to produce up to 150,000 gallons of aseptic drinks daily. … Canada’s Saputo is consolidating its operations in Australia. The company plans to permanently close its Maffra, Victoria, facility and streamline activities at its plants in Leongatha, Victoria, and Mil-Lel, South Australia. Saputo’s remaining Australian plants will absorb the processing and packaging operations discontinued at all three plants. (Company reports; Auburn Citizen, 11/13/22)

New Zealand’s Fonterra Co-operative Group invested NZ$40 million (about US$25 million) to convert its Tirau, North Island, ethanol plant into a lactose manufacturing site. Fonterra cited a series of reasons for the shift, including safety and storage concerns related to ethanol, as well as high costs. In addition, Lactose production allowed reduced water and energy use and reduced waste to landfill. The Tirau plant will concentrate the lactose to 45%, after which Fonterra will transfer the product to its Kapuni, North Island, facility. The Kapuni plant will further concentrate and dry it for use in a variety of products, but mainly pharmaceutical-grade lactose. Fonterra is currently running commissioning tests. (Stuff.co.nz, 11/28/22)

Alaska Milk Corp., the Philippine subsidiary of Dutch dairy powerhouse FrieslandCampina, teamed up with the Philippine Department of Agriculture, the Philippine National Dairy Authority, the University of the Philippines, and Dutch dairy genetics and herd management company CRV to establish the Philippine-Netherlands Dairy Excellence Center. The venture will see FrieslandCampina and CRV sharing Dutch dairy expertise with local dairy farmers, the government, academia and others to improve milk yields, quality, productivity, sustainable production and farm management. (Company reports)

French cheesemaker Bel Foods purchased a 49% share of India’s Britannia Dairy as part of a joint venture with Britannia’s parent company Britannia Industries. Under the terms of the deal, Britannia Dairy will be renamed Britannia Bel Foods. The joint venture plans to produce cheeses co-branded under the names Britannia and Laughing Cow. Bel said it has been “in start-up mode” in India for the last four years and expects the joint venture to accelerate its business in the country. (FoodBev.com, 11/30/22)

Vietnam’s Vinamilk plans to build major new milk processing facilities in Hung Yen Province and the Moc Chau district in Son La Province. The Hung Yen plant will connect existing Vinamilk dairy farms, warehouses and distribution systems in a single hub with a capacity of over 410,000 MT per year. It will serve domestic and export markets, including China, Japan, South Korea and Southeast Asia.The US$130-million Moc Chau complex will include dairy farms and a processing facility. The two-phase project will be capable of manufacturing 1,000 MT per day when complete. Vinamilk plans to complete the projects, which it estimates will increase the company’s production capacity by 20% in the next two-to-three years. It did not specify what types of products the plants would make and did not release a price estimate for Hung Yen. (Company reports; DairyReporter.com, 11/17/22)

Nestlé plans to invest nearly $1.9 billion in Saudi Arabia in the coming decade, starting with a $100-million plant to make infant products and ready-to-drink coffee. It’s aiming to complete the facility in 2025. … Malaysia’s Dutch Lady Milk Industries plans to discontinue milk powder operations at its Petaling Jaya plant in May 2023 as part of an ongoing manufacturing optimization program. The company will instead source its milk powder through Dutch parent company FrieslandCampina. … British multinational Reckitt Benckiser Group reportedly opened a new milk dryer at its plant in Delicias, Chihuahua, Mexico—a project totaling around $100 million. The facility will manufacture infant formula for domestic and export markets. … Olam Food Ingredients (OFI) opened a new Customer Solutions Centre in Singapore. A team of Olam chefs, food scientists and quality and regulatory experts will work with OFI customers on applications using OFI ingredients, including dairy. (USDEC Mexico office; USDEC Southeast Asia office; El Heraldo de Chihuahua, 10/25/22)

DairyAmerica, currently owned by California Dairies Inc. (CDI), Agri-Mark and O-AT-KA Milk Products, will become a wholly-owned subsidiary of CDI effective Jan. 1, 2023. CDI President and CEO Brad Anderson said the deal would “unlock significant synergies and represents another step towards improving efficiencies in providing world markets with high-quality dairy ingredients.” DairyAmerica will maintain marketing agreements with Agri-Mark and O-AT-KA and continue to sell their milk powders. Patti Smith will remain DairyAmerica’s CEO and the company will maintain its current office in Fresno, California. “As we continue to transform our business, this investment by California Dairies provides the framework to focus on our people and processes while strengthening our global competitiveness,” said Smith. (FoodBev.com, 12/5/22)

Italian ice cream and confectionery giant Ferrero Group purchased Iowa-based Wells Enterprises, one of the largest U.S. ice cream makers and owner of the Blue Bunny and Halo Top brands. The structure of the deal reportedly allows Wells to stay a largely independent division of Ferrero. Current CEO and Chief Engagement Officer Mike Wells will serve as an advisor to support the transition. Current Wells President Liam Killeen will take over as CEO of the ice cream business. (Food Dive, 12/7/22)

Italian cheese company Gennaro Auricchio Group purchased Italian goat, buffalo and cow’s milk cheesemaker 3BLatte. The purchase lifts Auricchio’s annual sales to around €400 million (about $US420 million), about 40% of which stems from exports. … Portland, Oregon-based Alpenrose Dairy is buying Larsen’s Creamery, Clackamas, Oregon. Alpenrose plans to move its production, distribution and warehouse operations to Larsen's nine-acre campus in late 2023. (Distribuzione Moderna, 12/2/22; FoodBev.com, 12/1/22)

French dairy giant Lactalis paid BRL$700 million (about US$133 million) for Dairy Partners America (DPA), the Brazilian joint venture between New Zealand’s Fonterra Co-operative Group and Switzerland’s Nestlé. The deal includes two manufacturing plants in Brazil. Fonterra and Nestlé founded DPA in 2003 to serve all of Latin America, then refocused activities in 2014 on selling chilled products in Brazil. The company has been held for sale in Fonterra’s financial statements since January 2020. The deal aligns with Fonterra’s strategy to sell overseas ventures and focus more squarely on New Zealand milk production. Further details were unavailable. (Company reports)

Japan’s Meiji expects the cost of new plant construction projects in China to top US$2 billion. (USDEC China office)

Denmark-based Arla Foods Ingredients (AFI) forged a new supply arrangement with Belgian dairy co-op Milcobel. Under terms of the partnership, Milcobel will provide whey protein retentate sourced from its mozzarella production facility in Langemark, Denmark. AFI will refine the raw material to produce specialty ingredients, including milkfat globule membrane for infant formula and whey protein hydrolysates for medical nutrition products. AFI cited rising demand as the reason for the deal. (Company reports)

Unilever says it resolved litigation with the independent board of Ben & Jerry’s over the transfer of Ben & Jerry’s assets in Israel to local Israeli licensee AQP. The lawsuit stemmed from Ben & Jerry’s decision to stop selling products in Jewish settlements in the West Bank and East Jerusalem because it considered the Israeli occupation illegal and contrary to the company’s social mission. Unilever, Ben & Jerry’s parent company, opted to sell the brand’s Israeli assets instead. AQP said the settlement makes no changes to its original deal with Unilever. AQP will now make and market the products under Ben & Jerry’s Hebrew and Arabic trademarks. (The Guardian, 12/15/22)

Chilean food and dairy manufacturer Carozzi Corp. paid US$43 million for Chilean ice cream company Lecherias Loncomilla Ltd. Carozzi entered the frozen dessert segment in 2020 with the acquisition of the Bresler and Melevi brands from Unilever and the licenses to manufacture and market other Unilever brands. (LexLatin, 12/14/22)

Abbott Laboratories is exiting the infant nutrition business in China and focusing exclusively on the adult nutrition category in the country. The company will continue to operate its manufacturing facility in Jiaxing, Zhejiang Province, and will continue to sell its full portfolio of products (including infant nutrition items) directly to Chinese consumers online. … Sartori Cheese named Bert Sartori as its new CEO. Bert is the son of Jim Sartori, the third generation of Sartori family leadership who helmed the company for nearly 30 years. Bert has been serving as president of Sartori since 2020. … Arla Foods named Harrison Cheng as its new vice president and head of Arla China. Cheng replaces Xinwei Liu, who has led Arla China for five years and is leaving at the end of 2022. He brings a commercial background from New Zealand’s A2 Milk and China’s Yashili. (Company reports; just-food.com, 12/19/22)

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