Shift in rankings of companies listed in Rabobank Global Dairy Top 20

For the second consecutive year, there are no new entrants to the Rabobank’s Dairy Top 20 list, but there’s been a slight shuffle in rankings.

The world’s largest food and beverage company, Switzerland’s Nestlé, reigns supreme on the list, but the gap between number one and number two has narrowed.

French Lactalis swapped places with Danone, moving into second place.

Danone slipped to the third spot, after divesting Stonyfield following the acquisition of WhiteWave, reducing its stake in Yakult, and selling its holdings in the Al Safi Danone joint venture in Saudi Arabia.

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Dairy price recovery in 2017 has positively affected the combined turnover of the top 20 global dairy companies, which was up 7.2 per cent on the year in USD, RaboResearch has shown.

Dairy senior analyst Peter Paul Coppes said the USD five billion threshold was difficult to achieve due to a scarcity of large acquisitions or mergers.

“However, while the names have remained the same, the order shifted in 2017.”

Merger-and-acquisition (M&A) activity in the dairy sector grew in 2017, fuelled – as in other sectors – by the availability of cheap capital.

Cooperatives are still dominating, but they are also challenged. Deals between Danone and WhiteWave, and Saputo and Murray Goulburn, had limited impact on rankings within the Global Dairy Top 20.

While M&A occurs in the dairy sector, dairy acquisitions tend to be limited in size and financial impact.

There is potential for growth within increased collaborations between Chinese and non-Chinese companies. If this happens, China has the potential to create a pipeline of global management talent.

Chinese companies need to address the integration of non-Chinese management as they consider global growth opportunities.

Rabobank sees an increased amount of disruption-based M&A deals, either defensive or opportunistic.

By nature, these deals are often small and involve start-ups, but they are growing in volume.

Rabobank recommendations to respond to dairy-free


Rabobank has said in a press release that dairy alternatives are on a rise as consumers are increasingly going dairy-free, particularly when it comes to fluid “milk” used on things like cereal or in coffees. More recently, biotechnology has entered the arena, brewing milk proteins through biofermentation.

The time is right for the dairy sector to reflect on the success of alternative dairy products and to consider applying those lessons to dairy, according to the latest Rabo Research global dairy report: Dare Not to Dairy – What the Rise of Dairy- Free Means for Dairy… and How the Industry Can Respond.

Rabobank said that their report pointed out that dairy alternatives have competed in the dairy space for decades, but competition has intensified as dairy alternatives broaden in types, styles, and categories of product. It also said global retail sales growth for dairy alternatives has soared at a rate of 8 per cent annually over the last ten years. With retail sales valued at $15.6b, dairy-free “milk” represented 12 per cent of total fluid milk and alternative sales globally in 2017, according to Euromonitor.

Nutrition, price, and flavour tend to favour dairy, but changing consumer perceptions around health, lifestyle choices, curiosity, and perceived sustainability are increasingly drawing more people to select dairy-free products.

“Global demand for dairy is expected to grow by 2.5 percent for years to come, with demand for non-fluid categories offsetting weak fluid milk sales,” says Tom Bailey, RaboResearch senior analyst – Dairy. “While it’s not essential to diversify into dairy alternatives, it would be wise for the dairy industry to at least learn one thing from the success of dairy alternatives, which may be putting the consumer first and trading in the old grass-to-glass model for glass- to-grass.”

The challenge for dairy lies mostly in fluid milk, where retail sales in western Europe (US$ 18.6bn) and the US (US$12.5bn) declined at an annual rate of 5 and 3 percent, respectively, in the five years to 2017, according to Euromonitor.

The results over the last five years have favoured dairy players who have invested in milk alternatives across the supply chain – from planting almond trees to buying brands. The investments in dairy alternatives have shown returns above standalone dairy.

Rabobank makes new board appointment

Rabobank Australia & New Zealand Group has announced the appointment of Jillian Segal AM to its boards.

Ms Segal, a respected company director with extensive regulatory and legal experience, joins the boards of Rabobank Australia & New Zealand’s major operating entities – Rabobank Australia Limited, Rabo Australia Limited and Rabobank New Zealand Limited.

Part of the global cooperative Rabobank Group, the world’s leading specialist food and agribusiness bank, Rabobank Australia & New Zealand is one of Australasia’s largest agricultural banks and a major provider of corporate and business banking services to the region’s food and agribusiness sectors. The bank also operates online retail savings and deposits business RaboDirect in both countries.

Announcing the appointment, Rabobank’s Australian & New Zealand chairman Sir Henry van der Heyden said Ms Segal’s extensive board experience across the private and public sectors, including in financial services – coupled with a career-long background in governance and law – made her an “ideal fit” for Rabobank’s Australian and New Zealand boards.

“We are truly delighted to have Jillian join the Rabobank boards,” he said. “She is one of Australia’s most accomplished and highly-regarded directors, and sought-after for her expertise in business, governance, banking, financial regulation and education. We are very pleased Jillian will now bring this expertise to Rabobank, as the bank further grows and develops in Australia and New Zealand’s burgeoning agricultural sector.”

Ms Segal previously served as a commissioner and later deputy chair at the Australian Securities and Investments Commission and as a director of ASX Limited and National Australia Bank Limited, as well as board chair of the Australian Banking Industry Ombudsman, among a number of other board positions.

She currently holds a number of non-executive positions, including deputy chancellor of UNSW Australia, chair of the General Sir John Monash Foundation and the Australia- Israel Chamber of Commerce (NSW), directorships with the Garvan Institute of Medical Research and the Grattan Institute and Trustee of the Sydney Opera House Trust.

Ms Segal was made a Member of the Order of Australia in 2005 for services to business law, particularly in the areas of financial services reform and market regulation, and awarded a Centenary Medal in 2003 for services to society through business leadership. Ms Segal holds a BA LL.B from the University of New South Wales and has a Masters of Laws from Harvard Law School.

Ms Segal takes the seat on the Australian and New Zealand Rabobank boards left vacant by retiring former Rabobank Australian chairman Bill Gurry.

Sir van der Heyden paid tribute to Mr Gurry, who served on the Rabobank’s Australian and New Zealand boards since 2005, and as chairman of Rabobank Australia since 2009. A highly-experienced company director, Mr Gurry had held a number of senior roles in the financial services industry, including executive chairman of UBS Australia, CEO of Potter Warburg and managing director of National Mutual Royal Bank.

“Bill has made an outstanding contribution to Rabobank in both Australia and New Zealand over the past 13 years, overseeing more than a decade of extraordinary growth in the business,” he said.

In addition to chairman Sir Henry van der Heyden, Ms Segal joins other directors of Rabobank Australia & New Zealand – Anne Brennan, Andy Borland, Berry Marttin, Sander Pruijs, Geerten Battjes and Peter Knoblanche (managing director Rabobank Australia & New Zealand Group and CEO Rabobank Australia).

Raw sugar futures tumble

As 2017 draws to a close, international sugar prices are struggling to reach US14 cents a pound, having started the year at almost US19 cents per pound as the 2017/18 international crop year remains on track for a surplus, according to Rabobank’s latest Global Sugar Quarterly. Read more