USDEC's Mid-Year 2023 Global Dairy Business Review

Our month-by-month summary of mergers, acquisitions, expansions, executive hires and other global dairy business news for the first half of 2023.

Across the international dairy sector, business activity has been brisk this year, as one can see from the U.S. Dairy Export Council's Mid-Year 2023 Global Dairy Business 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 review we publish twice a year.

We started this review with items from the January 6 Global Dairy eBrief and ended with news from the June 30 edition. This is a fast-paced yet lengthy review. We put company names in bold for easy scanning and searching.

What follows is a one-of-a-kind, archival summary of global dairy business developments for the first half of 2023, presented in month-by-month chronological order. Think of it as the global dairy business news that was.

Look for the full-year 2023 Global Dairy Business Review in January.  

Qatari milk producer and dairy processor Baladna Food Industries is exploring a large-scale dairy project in Algeria. Late last year, Baladna representatives and officials from Algeria’s Ministry of Agriculture visited a model farm project in the west of the country and presented plans for a 25,000-acre dairy farm and processing facility. The company is conducting a feasibility study on the soil and climate in the area, and depending on the results, it could launch the project by the beginning of 2024. Founded in 2017 in Qatar, the vertically integrated dairy company has been on a global expansion streak over the past few years. It has farm-to-bottle dairy projects in various stages of development in Malaysia, Indonesia and the Philippines, and last year purchased a minority stake in Egyptian dairy, juice and cooking product company Juhayna Food Industries. (USDEC Middle East/North Africa office)

California-based private equity firm Butterfly purchased Minnesota-based Milk Specialties Global. Current Milk Specialties CEO, Dave Lenzmeier, will continue to lead the business. Lenzmeier said he expects the acquisition will enable the company “to achieve a new level of growth.” … The European Commission approved the creation of a new joint venture between Dutch food and nutrition company Royal DSM and New Zealand’s Fonterra Co-operative Group. The new company, Tasman, will be headquartered in the Netherlands and will develop, produce and market fermentation-derived dairy proteins. (Company reports; Agriland, 12/28/22)

A Jan. 2 fire destroyed a butter storage room at the Associated Milk Producers Inc. (AMPI) plant in Portage, Wisconsin. Firefighters contained the blaze but not before butter runoff flowed into other areas of the plant and into storm sewers and a neighboring canal. Operations were temporarily halted on Jan. 3, and AMPI told Dairy Herd Management that cleanup would begin as soon as possible. … U.S. food giant Mars Inc. completed its new ice cream factory in Guangzhou, China, two months ahead of schedule. … Nestlé began testing its first animal-free milk product in California. The drink, branded Cowabunga, was developed with California-based food bio-tech start-up Perfect Day using precision fermentation technology. … Mead Johnson China launched a new adult nutrition brand called Agijoy. The product is designed for consumers over 50 and reportedly contains 23 nutrients (it is rich in protein and selenium) and lactoferrin. (USDEC China office; Company reports; Dairy Herd Management, 1/3/23; WMTV, 1/2/23; FoodBev.com, 12/22/22)

Dutch dairy giant FrieslandCampina became the latest major dairy manufacturer to venture into the “animal-free” dairy protein realm. The company’s FrieslandCampina Ingredients division signed a strategic partnership with California-based biotech company Triplebar Bio Inc. The two companies will work together to develop and scale up the production of cell-based proteins using precision fermentation technology. FrieslandCampina, which has been using precision fermentations to manufacture human milk oligosaccharides since 2016, said it plans to offer the lab-based proteins side-by-side with its dairy proteins and ingredients. (Company reports)

Ireland’s Ornua and its U.S. subsidiary Ornua Foods North America are suing New Zealand-based Westland Dairy Co. Ornua claims Westland’s Westgold butter infringes on its own Kerrygold trademark due to the similarity in packaging between the two brands. A hearing is slated for Feb. 9. …Yili Group completed Phase 1 of its new US$250-million fluid milk plant in Inner Mongolia. Product safety testing took place at the end of December and the company expects to begin commercial production soon. … Finnish food and dairy company Fazer Foods is considering exiting the dairy business. Fazer characterized its dairy operations as “small scale,” and is studying plans to convert its Koria, Finland, diary facility to oat-based drink and product manufacturing. … Alamar Foods, the master franchisee of Domino’s Pizza in the Middle East, North Africa and Pakistan opened its 600th Domino’s outlet in the region. The ribbon-cutting took place in Dubai. (USDEC China office; USDEC Middle East/North Africa office; Agriland, 1/10/23; FoodBev.com, 1/5/23)

Valley Milk is adding a 10,000-sq.-ft. addition to its Turlock, California, milk processing facility. The project, slated for completion in 2024, will produce AMF in drums and totes initially, with plans to expand to pails to serve industrial and foodservice customers. The company is targeting domestic and export markets with the new investment. There are “strategic opportunities” to export AMF into the international market, Valle Milk said. (Company reports)

Corman Miloko, a joint venture dairy spread and butterfat manufacturer based in Carrick-on-Sur, Ireland, plans to close its doors this June. Belgian butter, spread and fats and oils maker Corman owns a 55% stake in the operation, Ireland’s Tirlán (formerly Glanbia Ireland) owns the other 45%. Corman, in turn, is part of the French dairy company Savencia Fromage and Dairy. The closure comes after “significant restructuring” failed to turn around sagging volume sales. The joint venture company, which has been in business since 2005, sells primarily to export markets. (Agriland, 1/21/23)

Italian dairy-co-op Latteria Soresina plans to acquire Italian gorgonzola maker Fratelli Oioli. Sorensina said it hopes the acquisition would open additional export opportunities. … New York-based global equity firm General Atlantic paid $130 million for a 5.6% stake in Indonesian dairy and food processor Cisarua Mountain Dairy, also known as Cimory. Cimory said it plans to use the funding to accelerate growth initiatives, including new product development and broadening its distribution network. (Company reports; FoodBev.com, 1/18/23)

Korea’s Lotte Confectionery is investing $55 million over the next five years to expand its Indian ice cream subsidiary, Havmor Ice Cream. The project centers on a new 650,000-sq.-ft. manufacturing plant in Pune, Maharashtra. Havmor operates 216 ice cream parlors in India. … Nestlé Health Science is spending $43 million to add two new production lines to its Eau Claire, Wisconsin, manufacturing plant for ready-to-drink beverages. The facility produces an array of medical nutrition products and nutritional drink brands such as BOOST and Carnation Instant Breakfast. (Leader-Telegram, 1/25/23; FoodBev.com, 1/19/23)

Saputo announced a series of capital investments and related consolidation plans impacting facilities in California and Wisconsin. The company is building a C$240-million (about US$180 million) greenfield cut-and-wrap facility in Franklin, Wisconsin. The plant, slated to be fully operational by the third quarter of 2025, will become the center of the company’s Midwest cut-and-wrap operations. Saputo plans to transfer regional cut-and-wrap activities to the new Franklin site, resulting in the permanent closure of its Green Bay, Wisconsin, and Big Stone, South Dakota, facilities. Green Bay will shut down in the third quarter of fiscal 2025 and Big Stone will halt operations in the third quarter of fiscal 2024. In California, Saputo is investing C$75 million (about US$56 million) to convert its Bardsley Street plant in Tulare into a string cheese packaging facility. The plant was previously a cut-and-wrap site. Saputo expects the facility will be operating at full capacity by the third quarter of 2025. In conjunction with the conversion, the company will permanently close its South Gate, California, facility in the fourth quarter of fiscal 2025.

Danone is exploring strategic options for its organic dairy activity in the U.S., including a potential sale. The company said its Horizon Organic and Wallaby businesses “fall outside our priority areas of focus.” … Hong Kong-listed Vita International exercised its option to buy a 49% stake in dairy alternative manufacturer Vitasoy Australia. Vita paid Vitasoy Australia co-owner Bega Cheese A$51 million (about US$36 million) to acquire the outstanding shares. Bega said it would seek other ways to re-enter the dairy alternative category. … New York-based infant nutrition company ByHeart purchased DairiConcepts’ manufacturing plant in Allerton, Iowa. DairiConcepts is a wholly-owned subsidiary of Dairy Farmers of America (DFA), which said it looked forward to continuing to work with ByHeart. The acquisition triples ByHeart’s supply capacity, “strengthening the vulnerable infant formula supply chain in this country,” the company said. For more, see this press release. (Company reports; Sydney Morning Herald, 1/30/23)

FrieslandCampina CEO Hein Schumacher will step down effective May 1, 2023, to lead multi-national food and personal care company Unilever. Schumacher will replace retiring CEO Alan Jope on July 1 after a one-month handover period. FrieslandCampina has initiated an accelerated process to select a new leader. … Anchor Food Professionals, owned by New Zealand’s Fonterra Co-operative Group, signed a deal with Walmart China to provide a lineup of new bakery products to 400 Chinese stores. The products, which are made using Fonterra ingredients, include a New Year’s cream cake, Basque cheesecake and a Swiss roll. (USDEC China office; Company reports)

China’s Junlebao plans to spend $442 million to build a dairy processing facility and three dairy farms in the Yangtze River Delta region. The project will support the government’s school milk program. The company expects to begin construction in March. Separately, Junlebao purchased a 10% stake in cheese manufacturer Shanghai Laoshen Health Technology Development Co. and plans to build a cheese factory this year, with an eye toward becoming one of China’s top cheese manufacturers over the next five years. (USDEC China office)

On Jan. 31, Japan’s Meiji began production at the first of three new facilities set to open in China this year. The fluid milk/yogurt processing plant is in Tianjin, China. … McDonald’s plans to open 900 new units in China in 2023. It has increased store openings for the past two years: 480 in 2020, 660 in 2021 and 700 in 2022. It currently operates more than 5,000 stores in China. … Malaysia-based investment group Wellspire Holdings is looking to import dairy beverages, including yogurt and UHT milk, as part of an effort to expand business in Thailand. … Danone opened a new research and innovation center at its Paris-Saclay campus in France. The facility, with a staff of more than 550, pilot plants and labs, will focus on “fresh dairy and plant-based products” and mineral water. (USDEC China office; USDEC Southeast Asia office; Company reports)

Fonterra Co-operative Group rolled out two new functional dairy products in Thailand through an exclusive partnership with 7-Eleven. Anchor Actif-Fiber and Anchor Beaute are being sold at more than 14,000 7-Eleven stores across the country. Actif-Fiber is fortified with fiber to aid digestion. Beaute contains zinc and collagen and is being marketed as an “ingestible beauty” product that Fonterra says provides “an inside-out kind of glow.” (USDEC Southeast Asia office; Company reports)

Subway confirmed that it is exploring selling their business and hired JPMorgan Chase to advise as it looks for potential buyers. Subway has 37,000 stores worldwide. Wall Street Journal estimates a sale price of about $10 billion. … The Seoul High Court upheld a lower court’s ruling and ordered Korean dairy processor Namyang Dairy to abide by a 2021 deal to sell a majority stake (53%) in the business to private equity firm Hahn & Co. Namyang’s owners claimed the deal was invalid just months after they made it, prompting Hahn to file the lawsuit. (Wall Street Journal, 2/14/23; Korea Herald, 2/9/23)

FrieslandCampina is consolidating its butter production in the Netherlands. The company said that increased cream demand from the foodservice channel created a structural overcapacity in butter. FrieslandCampina plans to expand its Lochem plant and merge all butter production to that location, closing its 's-Hertogenbosch facility in mid-2025. … China’s Terun Dairy is raising funds to build a $145-million dairy processing plant in the Xinjiang Autonomous Region in northeast China. The facility will focus on shelf-stable dairy products. (USDEC China office; Company reports)

Saputo is spending A$20 million (about US$14 million) to add cream cheese manufacturing to its Smithton, Tasmania, manufacturing plant. The new capacity replaces cream cheese operations at Saputo’s Maffra, Victoria, plant, which the company shuttered last week. (It announced the planned closure last November.) Saputo CEO Lino Saputo Jr. said that he expected more plant closures in Australia due to the country’s shrinking milk supply, “but there will be heavy investments as well in other facilities to focus on higher valued categories of dairy products that we can sell domestically and around the world.” (Just Food, 2/17/23; ABC News, 2/15/23)

Saudi Arabian dairy processor Almarai completed the acquisition of International Dairy and Juice Ltd. (IDJ) from its former joint-venture partner PepsiCo. The company paid an estimated 255 million riyals (about US$68 million) for PepsiCo’s 48% share in IDJ. Almarai said that full ownership would facilitate expansion efforts. … Malaysian distributor Farm Fresh paid RM84 million (about US$19 million) for a 65% stake in ice cream chain The Inside Scoop. The company plans to pursue brand collaboration between The Inside Scoop and its Jom Cha boba tea and soft-serve chain. … German regulators will only permit German dairy processor Theo Müller’s purchase of FrieslandCampina’s German dairy business if it divests two of the Dutch dairy giant’s brands. Müller said it is already in talks to sell the Tuffi and Landliebe businesses. (USDEC Southeast Asia office; The National News, 2/19/23; New Straits Times, 2/16/23)

Fonterra Co-operative Group COO Fraser Whineray is resigning at the end of Fonterra’s fiscal year on July 31. … Lactalis is facing criminal charges in France related to a 2017 salmonella outbreak linked to its infant formula that sickened more than 40 children in Europe and impacted Lactalis formula distribution in 80 countries. Prosecutors contend that the company failed to properly carry out a product recall and withdrawal. (Company reports; DairyReporter.com, 2/20/23; Food Safety News, 2/18/23)

Leprino Foods signed a non-binding agreement to take full ownership of Glanbia Cheese, the European joint venture it operates with Ireland’s Glanbia plc. Leprino will initially pay €160 million (about US$170 million) for Glanbia plc’s stake, with an additional contingent consideration of €25 million (about US$26 million) over the next three years, depending on business performance. The deal includes manufacturing plants in Llangefni, Wales; Magheralin, Northern Ireland; and Portlaoise, Ireland. Current Glanbia Cheese CEO Paul Vernon will continue to head the business. “Having successfully partnered with Glanbia since 2000, we are proud of the high-quality business that we have helped build,” Leprino President and CEO Mike Durkin said. “We look forward to working with Paul Vernon and the local team to ensure a seamless transition for our employees, customers and suppliers. We intend to take advantage of our combined expertise, knowledge and strengths to further enhance the business and are committed to ongoing investments in the core capabilities and the talented people that set us apart from our competition.”

Vertically integrated Qatari dairy manufacturer Baladna formed a strategic partnership with French cheesemaker Bel Group. Baladna will begin producing Laughing Cow jarred cheeses this year under the terms of the agreement, but more Bel products are reportedly slated for production “in the near future.” Baladna said the deal will help reduce imports and the potential supply chain disruptions and eventually increase product options for regional consumers. (USDEC Middle East/North Africa office; Company reports)

Australia’s Bega Cheese is closing its Griffith, Canberra, manufacturing plant following a review of its fresh dairy operations in the Australian Capital Territory and New South Wales. Declining farm numbers and milk production made supplying the facility inefficient and unsustainable. The closure follows the recent shuttering of Saputo’s Maffra, Victoria, plant and Saputo CEO Lino Saputo Jr.’s prediction that he expected more plant closures in Australia due to the country’s shrinking milk supply. (FoodBev.com, 2/27/23)

Fast-food player Wendy’s signed a deal with India’s Rebel Foods to scale up the restaurant’s presence in India. Rebel will become the master franchisee, with plans to develop about 150 units over the next decade. Wendy’s originally partnered with Rebel in 2020 to build and operate 250 cloud kitchens across India to grow a home-delivery business in the country. (Bloomberg, 2/27/23)

FrieslandCampina Engro Pakistan signed a partnership with Dubai-based trading company Engro Eximp FZE. The deal aims to expand FrieslandCampina Engro dairy exports to the UAE and broader Middle East region. … McThai Co., the operator of McDonald’s restaurants in Thailand, is spending 300 million baht (about US$9 million) to open 10-15 new outlets this year, pushing its total number of units to 237-242. (USDEC Southeast Asia office; PKrevenue.com, 2/23/23)

Spanish dairy processor Calidad Pascual partnered with Angolan beverage company Refriango on a new milk manufacturing facility in Angola’s capital city of Luanda. Pascual has been exporting yogurt to Angola for 25 years, but this is its first Angolan production plant. It will reportedly produce UHT milk and milk powder. Pascual said it expects to raise international revenues to €125 million a year (about US$134 million) in three-year’s time through the Angolan investment as well as capacity expansion projects in South and Central America. (Company reports)

New Zealand’s second largest dairy processor, Open Country Dairy, named Mark de Lautour as its new COO, replacing Steve Koekemoer. Koekemoer is taking over as COO of Talley’s Group, parent company of Open Country and meat processor Affco. De Lautour is presently general manager sales and marketing at Affco. (Rural News Group, 3/15/23)

Domino’s China has aggressive expansion plans. The company expects to open 180 outlets in 2023, 240 in 2024, 200 in 2025, and 300 in 2026. The company currently operates more than 600 stores in 17 Chinese cities. … Fraser & Neave Holdings (F&N) secured exclusive rights to manufacture and market Nestlé’s Bear Brand sterilized milk in Cambodia until 2037. The new deal expands F&N’s existing contract with Nestlé, under which it makes and distributes Nestlé’s Bear Brand sterilized milk and Bear Brand Gold milk for Thailand and Laos. … Saputo named Frank Guido president and COO, Dairy Division (USA), and Haig Poutchigian president and COO, Dairy Division (Canada), effective April 1, 2023. … Olam Food Ingredients says it is on track to complete Stage 1 of its new Tokoroa, North Island, New Zealand powder plant in the second half of 2023. The plant will begin with WMP production, but Olam is already moving forward with Stage 2, which would focus on specialized, high-value protein-based ingredients. … Leprino Foods selected Illinois-based ingredient distributor Univar Solutions as an authorized distributor of Leprino nutritional ingredients and dairy products in Canada and the United States. … Australian co-op Norco is one of the latest dairy processors to enter the plant-based dairy alternative categories. The company launched pea- and oat-based beverages under the P2 Pea Protein Mylk and Oat Mylk brands, respectively. It is marketing the products in Australia. (USDEC China office; USDEC Southeast Asia office; Company reports; Just Food, 3/13/23; Rural News Group, 3/8/23)

FrieslandCampina’s ingredients arm opened a new lactoferrin manufacturing facility in Veghel, Netherlands. The plant quadruples the company’s total lactoferrin capacity to 80 MT annually. FrieslandCampina said it built the facility to meet rising global demand in early life and adult nutrition markets due to lactoferrin’s reported immunity-enhancement properties. Separately, FrieslandCampina appointed Jan Derek van Karnebeek as the company’s new CEO. Van Karnebeek is currently CEO of GreenV, an international group of operating companies active in the horticultural sector, but spent most of his career at Heineken in commercial, marketing and management positions. He will begin on June 1, replacing Hein Schumacher, who is leaving the company on May 1 to become the new CEO of Unilever. (Company reports)

Suntado LLC, a partnership between Idaho dairymen Jesus Hurtado and Dick Reitsma, began construction on a $150-million, 190,000-square-foot dairy processing facility in Burley, Idaho. Dairy West is partnering with Suntado to help the company get to market with products that meet shifting consumer demands. When completed in the spring of 2024, the facility will be able to process up to 450 MT of milk per day. The plant will open with six production lines making ESL and UHT conventional and organic dairy beverages and related products. Future plans call for up to 18 production lines. Former Glanbia USA CEO Jeff Williams is heading the company. (Ag Proud Idaho, 3/20/23; Capital Press, 3/18/23; KLIX, 3/16/23)

Oregon-based Tillamook County Creamery Association purchased the former Prairie Farms ice cream plant in Decatur, Ill. Tillamook reportedly plans to spend $50 million to retrofit the facility and acquire adjacent property for future expansion. (Company reports; Herald & Review, 3/16/23)

Swiss cheese manufacturer Emmi is looking to capitalize on rising global demand for goat’s milk powder. The company formed a new division—Emmi Nutrition Solutions (ENS)—focused exclusively on goat’s milk powder manufacturing, new product development and marketing. ENS consolidates activities of Emmi’s AVH dairy trading business and manufacturer Goat’s Milk Powder. The company is backing the venture with a new CHF40 million (about US$44 million) goat’s milk powder manufacturing facility in Etten-Leur, Netherlands. In addition to infant formula, Emmi plans to expand its goat’s milk powder portfolio to a range of products, including special nutrition for adults and seniors and products targeting consumers seeking healthy and active lifestyles. (Company reports)

Wisconsin-based Grande Cheese purchased the former Foremost Farms cheese plant in Chilton, Wisconsin. Grande operates eight other manufacturing facilities in the state. … Saputo is selling fresh milk processing facilities in Australia to retailer Coles Group for A$95 million (about US$64 million). Saputo called the sale an important step in executing its long-term vision for success in Australia. ... German dairy processor Hochwald is buying the Tuffi brand from Müller Group and seeking to purchase the Landliebe label as well. German regulators required Müller to divest the brands as part of its deal to purchase portions of FrieslandCampina’s German consumer dairy business. (Company reports; Post-Crescent, 3/29/23)

PT Kian Mulia Manunggal, a division of Indonesian conglomerate TempoScan Group, opened a new milk powder plant in Cikarang, West Java. The plant will produce inputs for TempoScan’s infant formula and growing-up milk businesses. (USDEC Southeast Asia office)

France-based Savencia Fromage & Dairy purchased Argentine dairy manufacturer Sucerores de Alfredo Williner and its Ilolay dairy brand. Williner was founded in 1928 in Santa Fe Province, the heart of Argentina’s dairy region. The company operates three manufacturing plants producing cheese, fluid milk and cream, milk powder, butter, yogurt, dulce de leche and desserts. Savencia said the acquisition expands its existing portfolio of brands and strengthens its presence in Argentina. (Company reports)

French dairy giant Lactalis officially opened a new US$8-million milk powder dryer at its Bonnievale cheese plant in Western Cape Town, South Africa. It added the dryer to serve rising local demand for milk powder and projections for 6% annual growth through 2028. The facility also reinforces the commitment Lactalis has made to the country, the company said. Over the past four years, Lactalis has invested an average of 400 million rands (about US$22 million) per year in South Africa. (Food Business Africa, 4/6/23; Consulate General of France)

Danone China and Qingdao University opened a new innovation center to focus on research into gut health, early-life nutrition and healthy aging with an emphasis on the specific needs of Chinese consumers. The Qingdao University–Danone Nutrition and Health Innovation Centre will utilize resources from the university’s School of Public Health, Institute of Nutrition and Health, and its analysis and test capabilities, combined with Danone Open Science Centre’s research and innovation capabilities. The partnership is the latest in a series of relationships Danone is cultivating with Chinese universities. Since 2020, the company has published 37 scientific papers and reports together with local China health and research institutes. (NutraIngredients-Asia.com, 4/11/23)

Papa Johns International signed a 10-year development deal with UAE-based PJP Investments Group to open 650 Papa Johns outlets in India. PJP already operates 100 locations in the Middle East, with plans to open 250 more over the next decade. The first Indian location is slated to debut in 2024. … Two Malaysian companies—ag investment firm Kulim (Malaysia) and A2 Fresh Holdings, a subsidiary of investment firm Rhone Ma Holdings—are reportedly moving forward on a joint venture dairy business. The new company, Jemaluang Dairy Valley in Johor, will be a vertically integrated operation, including dairy farming, processing and marketing. … China’s Behai Dairy (also known as Hokkai Pastures) completed a new $146-million dairy manufacturing plant. The facility can produce more than 150,000 MT of shelf-stable and refrigerated dairy products per year. Behai was founded in 2018 and focuses on yogurt products. … Singapore-based Hao Food is looking to expand the White Rabbit ice cream brand throughout Southeast Asia. The ice cream was developed through a partnership between the owner of the iconic White Rabbit candy brand, Shanghai Guan Sheng Yuan Food, and China’s Bright Dairy. Hao Food is the official regional distributor, rolling the line out in Singapore in 2021, and says it is exploring inquiries to launch in Indonesia, Malaysia and Vietnam. (USDEC Southeast Asia office; USDEC China office; The Malaysian Reserve, 4/6/23; Restaurant Business Online, 4/5/23; DairyReporter.com, 3/27/23)

Singapore-based Growtheum Capital Partners paid US$100 million for a 15% stake in Vietnam’s International Dairy Products (IDP). Growtheum said the deal would allow the company “to participate in Vietnam’s rising consumption story.” IDP manufactures drinking yogurt, fluid milk and other products and posted sales of about US$260 million last year. … Vilkyškių Pieninė, the parent company of Lithuanian dairy business Vilvi Group, acquired the remaining 30% stake of Latvian dairy processor Baltic Dairy Board (BDB). The company originally purchased 70% of BDB in 2018. BDB manufactures SMP, MPC and other products and Vilkyškių Pieninė said it made the deal to bolster Vilvi Group’s value-added dairy ingredient portfolio. (FoodBev.com, 4/17/23; Bloomberg, 4/12/23)

China’s Yili Group expects to begin trial runs at its new processed cheese factory in Hohhot, Inner Mongolia, this month. The $292-million project will reportedly produce 30,000 MTs per annum of mainly lollipop-shaped cheese. The plant is Yili’s largest cheese project to date. … Chinese dairy processor Junlebao officially opened its new pasteurized milk plant in Henan Province. The $146-million facility can reportedly produce 96,000 MT of pasteurized milk per annum. (USDEC China office)

Nestlé and private equity firm PAI Partners are forming a joint venture for Nestlé’s frozen pizza business in Europe, which distributes pizzas under the Wagner, Buitoni and Garden Gourmet brands. Nestlé will retain a non-controlling stake in the venture. The business will be headquartered in Germany, with manufacturing facilities in Nonnweiler, Germany, and Benevento, Italy. Nestlé’s pizza operations elsewhere are not part of the deal. Nestlé previously teamed up with PAI to create global ice cream maker Froneri in 2016. (Company reports)

Chinese importer and food processor Pinlive Foods says it is building a natural cheese manufacturing plant in Shanghai. It claims the facility will be ready for production by the end of the year. … Coca-Cola and Mengniu Dairy are reportedly running into challenges marketing Fairlife milk in China, which they jointly launched in September 2021. Online marketplaces JD.com and Tmall, and many convenient stores in Beijing, have stopped selling the product due to slower-than-expected sales. Reports suggest a lack of consumer understanding about the product’s ultrafiltration process and its higher price point might be the issue. (USDEC China office)

New Zealand dairy processor Westland Milk Products is building a new NZ$70-million lactoferrin plant (about US$43 million) at its South Island facility at Hokitika. Westland, owned by China’s Yili Group, said the investment would more than triple its lactoferrin capacity (currently 20 MT per year) and make the company one of the top three lactoferrin producers in the world. It expects to begin construction in the first half of 2024 and estimates that the plant will take about 16 months to complete. The facility will produce spray-dried lactoferrin, while Westland’s existing lactoferrin supply is produced via freeze-drying. The investment follows a NZ$40-million expansion (about US$25 million) at Hokitika that doubled butter production. (Company reports)

New Zealand’s Fonterra Co-operative Group opened a fifth new application center in China. The latest location—in Shenzhen in southern China—will concentrate on beverage applications, whereas the previous four units focus on food. “Part of the success of our foodservice business in China has been driven by the application centers, which allow us to better support our customers and better understand Chinese consumer preferences,” said Fonterra Greater China chief executive Teh-han Chow. (Stuff.co.nz, 4/25/23)

China’s Junlebao, in cooperation with local government, is investing $434 million to build a new fluid milk, dairy beverages and yogurt plant in Jiangmen, Guangdong Province. The facility will supply six provinces: Guangdong, Guangxi, Hunan, Jiangxi, Fujian and Hainan. … Israeli regulators approved Remilk’s lab-grown protein for food use. The approval follows an agreement made last year between Remilk and Central Bottling Co. (the Israeli franchisee for Coca-Cola) to produce a line of dairy products made with the protein. (USDEC China office; Company news)

New Zealand’s Fonterra Co-operative Group signed a two-year milk powder manufacturing deal with Australia’s Halo Food Co. and its Kiwi subsidiary Keytone Enterprises. Under the terms of the agreement, Keytone will make nine Fonterra milk powder SKUs for sale in China, India, Vietnam, New Zealand and other countries over the two-year contract term. In other Fonterra news, the co-op announced last month that it was closing its office in Egypt after 30 years of operation. The company cited global macroeconomic challenges and its recent decision to exit the Fonterra Consumer Brands business in Egypt. It will continue to service customers in the country from other offices in the Middle East and Africa. (Company reports; edairy news, 4/16/23)

Mexican dairy and food manufacturer and distributor Sigma Alimentos acquired a majority stake in California-based Hispanic cheese and cream manufacturer Los Altos Foods. Sigma Alimentos said the deal, which includes Los Altos’s manufacturing plant near Los Angeles will allow it to meet rising U.S. demand for Hispanic cheese. (Company reports)

Irish dairy and flavor manufacturer Carbery Group opened a new innovation hub in Singapore to serve the greater Asia region. The company said the Carbery Group Asia Business and Innovation Center will foster stronger collaboration with industry partners, start-ups, universities and key customers. … Coca-Cola is building a new $650-million milk processing plant in Webster, N.Y., to make Fairlife brand fluid products. It expects commercial production to begin in the fourth quarter of 2025. (USDEC Southeast Asia office; Company reports)

Dairy Queen is reportedly accelerating expansion plans for China and looking to enter new markets like Australia and Taiwan. The company currently operates about 1,250 units in China, its second-largest market after the U.S. It opened 165 Chinese stores in 2022 and expects to exceed that number this year. … Cacique Foods held a grand opening of its new 200,000-sq.ft. Hispanic cheese and crema manufacturing plant in Amarillo, Texas. The plant will begin production this summer. (USDEC China office; Inside Retail, 5/12/23; News Channel 10, 5/11/23)

Kerry Dairy Ireland and Dairygold Health and Nutrition are highlighting nutrition in their latest new products targeting Chinese consumers. Kerry’s Origimel is an adult milk powder that features what Kerry calls “science-backed ingredients” to support muscle, bone and cognitive health and boost immunity. The company is targeting “aging consumers who are seeking nutritional beverages to maintain and improve their health.” Kerry cited a growing opportunity for fortified products in China as that country’s middle class continues to expand. Dairygold is expanding its Aerabo range of milk powders in China with Aerabo Light, Aerabo Boost and Aerabo Vitality targeting young professional adults, older health-conscious consumers and adults with active lifestyles. The company says that the products contain “higher values” of the essential amino acid tryptophan, vitamin B2 (riboflavin), conjugated linoleic acid (CLA) and provitamin A, as well as tocopherols and beta carotene. Dairygold launched original Aerabo WMP in China in 2021. (Agriland, 5/17/23, 5/19/23)

Ireland’s Kerry Group opened a new innovation hub in Wageningen University’s “Food Valley” in the Netherlands. The facility will focus on clean-label and food waste technologies. … New Zealand dairy processor Mataura Valley Milk (MVM), which is owned by New Zealand’s A2 Milk Co., is seeking a new chief executive after Bernard May stepped down from the role in May. John Roberts was appointed interim CEO and will oversee MVM’s focus on developing its infant formula manufacturing business. … Qatari milk producer and dairy processor Baladna continues to broaden its global footprint. The company signed Memorandums of Understanding with two Indonesian agribusiness companies to cooperate on milk production initiatives. The joint efforts will aim to identify, assess and initiate projects to bolster Indonesian milk output and processing and strengthen food security. … Arla Foods inaugurated a €10-million dairy farm (about US$11 million) in Kaduna, Nigeria. Arla said the farm—a joint effort between the company, the Nigerian government, non-governmental organizations and the local farming community—will serve as a hub of dairy farming knowledge and “symbolizes the massive potential we see in Nigeria.” (USDEC Southeast Asia office; FoodBev.com, 5/30/23; Food Ingredients First, 5/18/23; New Zealand Herald, 5/9/23)

New Zealand’s Fonterra Co-operative Group formed a new, stand-alone corporate investment arm to incubate, scale and invest in new, innovative nutrition science businesses. Provisionally named Nutrition Science Solutions (NSS), the business will “incubate and scale a portfolio of disruptive ventures by developing solutions that combine science, nutrition and technology to make a real impact on human health,” Fonterra CEO Miles Hurrell said. NSS will seek out, partner and invest in global start-ups with emerging technologies and in novel market channels. Its first investment is a US$10 million minority share in California-based Pendulum, a biotech company focused on developing microbiome-targeted products that advance metabolic health. Together, Fonterra and Pendulum say they will seek to establish a presence in global markets by co-developing and commercializing next-generation microbiome products that are scientifically formulated to make measurable improvements in people’s health. Weeks prior to the NSS announcement, Fonterra also rolled out a new effervescent powdered probiotic drink in Singapore under its Nurture Digestion+Immunity label. The company based the product on consumer research that indicated interest in probiotic drinks (Southeast Asian consumers believe “that true wellness is impossible without a healthy gut,” Fonterra said) but with lower sugar content and a preference for effervescent beverages. The company is already looking to expand distribution to Indonesia, Malaysia and Thailand. Fonterra has been increasingly active in functional products over the past year—with varying degrees of success. A positive reception to ready-to-drink Nurture Digestion+Immunity beverages in Singapore in 2022 spawned the new powdered, effervescent product. Earlier this year, it also rolled out a line of Anchor Actif-branded products in Thailand. However, Fonterra’s BioKodeLab supplement line launched last October has already been “put on hold.” (USDEC Southeast Asia office; Company reports; DairyReporter.com, 5/23/23)

New Zealand dairy processor Synlait plans to sell Dairyworks (its cheese products division) and Talbot Forest Cheese (a related consumer business unit). Synlait acquired both New Zealand businesses in 2019 in transactions valued collectively at about NZ$150 million (about US$92 million today). Synlait said it is narrowing its businesses to focus on its highest margin segments: B2B advanced nutrition and foodservice. (Radio New Zealand, 6/6/23)

Subway reached an agreement with Chinese master franchisee Shanghai Fu-Rui-Shi Corporate Development to open 4,000 new sandwich shops across China over the next two decades. It is the largest franchise agreement in Subway’s history. There currently are around 500 Subway stores in China. … California-based Flynn Restaurant Group plans to buy Pizza Hut Australia, including the franchise license for the entire country. Australia-based investment firm Allegro Funds currently owns Pizza Hut Australia. Flynn operates about 950 Pizza Huts in the U.S.; the deal—its first outside the United States—will give it another 260. … Mars Inc. is aiming to grow its global ice cream business from $400 million in sales to $1 billion by 2030. Mars said it is eyeing growth in places where it already has ice cream factories, as well as in emerging markets. “Ice cream is about a $80 billion category around the globe, and it’s going to be about $100 billion by 2030,” said Anton Vincent, president of Mars Wrigley in North America and who recently took over global ice cream responsibilities. (Nation’s Restaurant News, 6/7/23; Reuters, 6/6/23; Bloomberg, 5/24/23)

China’s Yili Group and New Zealand’s Olam Food Ingredients (OFI) each expects to bring new plants online over the next two months. Yili is finishing a $138-million infant formula expansion at its Tianjin manufacturing plant. The new line, set to open in July, can produce up to 24,000 MT per year of semi-finished products. OFI expects to open Stage 1 of its new NZ$100-million-plus milk powder plant in Tokoroa on New Zealand’s North Island in August, prior to the 2023/24 milking seasons. The facility will reportedly produce up to 10 MT of powder per hour. Stage 2, which will expand operations to higher-value, functional protein products, should be up and running for the 2025/26 season, the company said. Rumors in New Zealand farming circles suggest OFI is already contemplating a second plant on the South Island, although the company has not publicly stated such intentions. OFI rival Fonterra Co-operative group cautioned that OFI’s plans could lead to excess processing capacity plant closures, given expected declines in New Zealand milk production in the years ahead. (USDEC China office; New Zealand Herald, 6/24/23)

Vinamilk announced it is joining six global nutrition and bioscience companies in a strategic partnership designed to further its mission of providing “international quality” nutritional solutions to Vietnamese children. Companies joining the Vietnamese dairy processor in the initiative include DSM, Chr. Hansen, Beneo, Gnosis, AAK and Kanematsu. Vinamilk CEO Mai Kieu Lien said the partnership will help the company further its commitment to leveraging modern production processes, scientific research and international cooperation to provide Vietnamese children with high-quality nutritional products. (FoodBev.com, 6/19/2023)

Ireland’s Dairygold Health and Nutrition (a business of Dairygold Co-operative Society) acquired a majority stake in Vita Actives Ltd. Vita Actives, also based in Ireland, is a manufacturer, supplier and distributor of bulk nutraceuticals and food-grade ingredients for dietary supplements. Dairygold said the deal positions the company well within the fast-growing life-stage nutrition segment. … Unilever is buying U.S.-based Greek frozen yogurt company Yasso Holdings to advance its position in the premium “better for you” frozen dessert segment. (Company reports; Agriland, 6/23/23)

Firehouse Subs, owned by Restaurant Brands International, signed a development deal to launch in Mexico later this year. The company did not name its partner in Mexico but said the deal, as well as a new store in Switzerland, are the first steps of a broad international push into the Middle East, Latin America, Asia, Europe and Africa. … Saudia Dairy and Foodstuffs (SADAFCO) signed a sales and export agreement with the Sultanate of Oman. SADAFCO, which produces dairy products, dairy alternatives, snacks, processed tomato products and other foods, did not provide information on which products were included in the agreement. The agreement aligns with the company’s efforts to expand its regional and export business. … Bongards Creameries is spending $125 million to increase milk handling capacity at its Perham, Minnesota, manufacturing plant by 30% to around 2,500 MT/day. The project includes expanding milk intake bays, cheese packaging, whey drying, packaging and warehousing, and wastewater treatment. Work is set to begin in July with completion expected in June 2025. (USDEC Middle East/North Africa office; Company reports; Perham Focus, 6/27/23)

Dairy innovation awards offer insights into new product trends
The 2023 World Dairy Innovation Awards were announced in June at Zenith Global’s 16th Annual Global Dairy Congress in London. While the awards are not a comprehensive round-up of new product innovation around the world, they are instructive in terms of product development trends taking place in some key U.S. dairy export markets, particularly China.

Health and nutrition claims continued to play a strong role among award winners and contenders, reflecting the continuing consumer focus on immune and digestive health. China-based Feihe Dairy’s award in the functional dairy category for its Aiben bovine colostrum milk powder highlights interest in the use of natural-based products as nutritional supplements to promote health and the immune system. Singapore-based CP-Meiji took home the prize in the “intolerance-friendly innovation category” with Lactose Free Dairy Milk with Malt.

Feihe Dairy’s Aiben bovine colostrum milk powder

• Zhennong High-Calcium Milk and ShuHua AnTangJian Sugar-Control Lactose-Free Milk from Chinese dairy giant Yili Group.
• Feihe’s Aiben Lactoferrin Formula Milk Powder.
• Japanese dairy processor Meiji Co.’s Fat-Fighting MI-2 Yogurt (which it claims reduces belly fat) and Probio R-1 Yogurt, which is fortified with iron and vitamin C.

Many award nominees and winners had innovative product configurations that fit the Congress’s theme of “reimagining dairy.” In the cheese category, Feihe’s Zhuoran High-Calcium Cheese Lolly took top honors, with other finalists including the Feihe’s Zhuoran High-Calcium Cheese Lumps and Yijiahao Cheese’s Double-Layer Cheese Lollipops (Yijiahao Cheese is a subsidiary of Yili). Yijiahao Cheese also took top honors in the children’s category with its Cheese Bomb cheese snacks in kid-friendly shapes.

Yijiahao Cheese’s Cheese Bomb cheese snacks

Sustainability also continued to be an important industry touchpoint. For corporate social responsibility/sustainability initiatives, Yili earned finalist honors for its Satine A2 Beta-casein Organic Pure Milk, which Yili claims is China’s first net-zero carbon milk. Japan’s Meiji Co. was commended for its collaborative efforts with Ajinomoto to work with Japanese dairy farmers to reduce greenhouse gas emissions.

And on the marketing side, Yili was a finalist in packaging for its Satine No Printing No Ink Environmentally-friendly Edition—where individual cartons of Satine multipacks are almost completely white.

Yili's Satine No Printing No Ink cartons

For a full recap of winners, finalists and commended products, go to https://www.foodbev.com/news/world-dairy-innovation-awards-2023-winners/. (Company reports; FoodTalks, 6/25/23; FoodBev.com, 6/21/23)

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