The 2019 Global Dairy Business Year in Review

Mark O'Keefe USDEC

We curate a one-stop, one-of-a-kind historical archive of the most important global dairy business developments of the year.  

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

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

We put company names in bold for easy scanning.

To get similarly packaged news from the last two years, see our 2017 and 2018 reviews. Why do we do all this?

We think our audience appreciates a curated, one-stop, one-of-a-kind historical archive of the most important global dairy business developments of the year.  

Year-after-year, this ends up being one of the most popular blog posts we publish. So let’s review the year that was in global dairy business.

January-2

Nestlé is planning a push into the plant-based food market, starting with a vegan “burger” under the label Garden Gourmet. The company is currently experimenting with plant-based beverages—one made from walnuts and blueberries, another featuring spirulina algae. Nestlé hopes to grow plant-based product sales to more than $1 billion within the next decade. (Bloomberg, 12/28/18)

 





 

Fire damaged one of the buildings at Hilmar Cheese Co.’s Hilmar, California, manufacturing site just before the new year. Fire officials estimated the fire caused about $2 million in losses, although Hilmar has not confirmed the figure . . . China’s Yili Group rolled out a new logo as part of a brand upgrade aimed at strengthening its presence in the international marketplace. For more on the logo and to see what it looks like, click here(Fresno Bee, 12/29/18; Reuters, 12/17/18)

Major manufacturers continue to launch and/or expand distribution for plant-based products meant to replace dairy. Here are some of the latest developments: (1) Both Chobani and Danone introduced coconut-based “yogurt” lines in the U.S. this month. The Chobani offering comes in nine flavors; Danone will market its line under the Oikos name. Danone said it expects plant-based “yogurts” to eventually comprise 10% of yogurt sales. (2) Danone is also set to launch its Silk vegan oat “milk” under the brand name Oat Yeah this month across the U.S., while Califia Farms will roll out Oat Barista Blend in February followed by an unsweetened oat beverage variety in April. (3) Unilever is expanding its Magnum vegan “ice cream” bars to Australia after debuting it in select European countries. The product—in classic and almond flavors—is made from pea protein and coated in vegan chocolate. (4) Pea protein supplier Roquette expects to open a $300-million pea protein plant—reportedly the world’s largest—in Manitoba, Canada, later this year, and is exploring pea protein “milk” opportunities. (Company reports; Fortune, 1/9/19; Live Kindly, 1/8/19; Plant Based News, 1/7/19; FoodNavigator.com, 1/4/19)

Chinese dairy giant Mengniu Dairy paid $44 million for a 51% share of Inner Mongolia Shengmu High-tech Dairy, a subsidiary of China Shengmu Organic Milk. As part of the agreement, China Shengmu will transfer all its downstream dairy business and related assets (including subsidiary Huhehaote Dairy) to Shengmu High-tech Dairy. The deal shores up Mengniu’s raw milk supply and provides China Shengmu with a much-needed influx of cash as well as the support of Mengniu’s production and distribution network to expand organic dairy product sales. (Company reports; just-food.com, 1/2/19; Caixin, 12/23/18)

Arla Foods sold its cheese factory in Bad Wörishofen, Germany, and all of its shares in French cheese packager Martin Sengelé Produits Laitiers in Muhlbach-sur-Munster, France, to Belgian cheesemaker Vache Bleue. The German plant mainly produces emmentaler that is packaged at the Martin Sengelé facility . . . Fonterra Co-operative Group sold its livestock division to Kiwi agricultural conglomerate Carrfields as part of its strategic review of assets . . . German dairy processor Hochland bought a 25% stake in Greek feta maker Greek Family Farm . . . Swiss-owned Wisconsin cheesemaker Emmi Roth purchased Great Lakes Cheese’s Seymour, Wis., blue cheese plant. The facility makes more than 3,100 metric tons of cheese annually. Emmi Roth plans to use it to develop new blue cheese formats and varieties . . . In a bid to boost profitability, Saudi Arabian dairy company Almarai sold its 33% stake in United Farmers Holding Co., a joint venture to produce grain and fodder through farm investment outside Saudi Arabia. Joint venture partner Saudi Agricultural and Livestock Investment Co. bought out its stake. (Company reports; Stuff.co.nz, 1/9/19; TopAgrar, 1/7/19; Arabian Business, 1/2/19)

Finnish dairy co-op Valio secured a permit from Chinese authorities to export powdered infant formula from its Lapinlahti plant and ready-to-drink liquid infant formula from its Turenki plant. The company says it is currently engaging with potential customers with an eye on building the Valio name in China. (Company news)

Vietnamese children’s nutrition specialist NutiFood and Japanese beverage and food maker Asahi formed a new joint venture—Asahi-NutiFood—to target the Vietnamese infant nutrition market. NutiFood will work with Asahi to develop products specifically suited for Vietnamese tastes and nutritional needs. Asahi will manufacture the products in Japan and export to Vietnam. (Saigon Times, 1/10/19)

Arla Foods combined its product management and R&D functions into a single new “Product and Innovation” group. The company says the new organization will enable closer collaboration between its commercial zones, market and supply chains, accelerating product development and creating products better aligned with consumer needs. The co-op named Arla veteran Lars Dalsgaard to the new position of senior VP, product and innovation, to head up the group. (Company reports)

Singapore-based business group Jardine Cycle & Carriage is increasing its stake in Vietnam’s Vinamilk to nearly 12%. (USDEC Southeast Asia office)

Louis Dreyfus Co. said it will sell or wind down its small dairy business by the middle of the year . . . BK Brasil is opening a new Burger King location every 3-4 days in Brazil, a pace that will push the fast-food chain past McDonald’s to become the country’s largest chain. Burger King currently has about 740 Brazilian outlets vs. about 940 for McDonald’s. BK Brasil also plans to open 300 Popeyes stores in Brazil over the next decade . . . CEC Entertainment signed development agreements with franchisees for 25 new Chuck E. Cheese restaurants in Bahrain, Egypt, El Salvador, Kuwait and Mexico . . . Shakey’s Pizza Ventures Asia plans to spread out from the Manila metro area, opening 20 new stores in 2019. That would push the total number of Philippine outlets to 248. (USDEC Southeast Asia office; Company reports; Reuters, 1/16/19; Bloomberg, 1/9/19)

Glanbia Ireland and Dutch cheese and dairy manufacturer Royal A-ware are teaming up to build a €140-million (about US$159-million) greenfield cheese manufacturing plant in Belview, Ireland. The plant, which will be built near Glanbia’s infant nutrition plant, will handle nearly 500,000 metric tons of raw milk per year, producing cheese for the EU and global markets. After spending €343 million since 2014 to facilitate a 42% increase in milk production from its farmers, Glanbia said it needed to diversify its product mix and create “a new route to market” for that milk. (RTE, 1/22/19; Agriland, 1/22/19; Checkout, 1/22/19)

France’s Lactalis bought Egyptian cheese and dairy company Greenland Group for Food Industries and the milk products business of India’s Prabhat Dairy. Lactalis acquired Prabhat’s Sunfresh Agro Industries via its wholly owned Indian subsidiary Tirumala Milk Products and purchased Greenland through its Middle Eastern joint-venture operation Lactalis-Halawa. Greenland operates five plants in Egypt, including a whey production facility. Prabhat makes milk, milk powder, butter and ghee at two plants, and exited dairy production to focus on its cattle feed business. (Almal News, 1/23/19; DairyReporter.com, 1/23/19; VC Circle, 1/22/19)

 





 

Franchise business in Thailand is thriving, particularly in the food and beverage sector. Minor DQ Ltd., the franchisee for Dairy Queen in Thailand, plans to double the number of Thai units to 1,000 by 2023, with 40 coming on line this year. Thailand is already the third largest Dairy Queen market outside of the United States. Thoresen Thai Agencies, a shipping company that broke into the franchise market last year with Pizza Hut in Thailand, opened the first Thai Taco Bell this week in Bangkok. The outlet features a menu adapted specifically for Thai tastes. (USDEC Southeast Asia office; Reuters, 1/22/19)

New Zealand dairy cooperative Westland Milk is reportedly considering proposals from more than 25 parties, including Canada’s Saputo, interested in buying all or part of the business. The co-op announced a capital structure review last month. (Stuff.co.nz, 1/23/19)

Nestlé opened a new R&D center in Limerick, Ireland, to support innovation in milk-based maternal and infant nutrition products for the global market. The $30-million facility is adjacent to Nestlé’s Wyeth Nutrition plant . . . Mexico’s Grupo Lala completed a $14-million upgrade to the San Ramon, Costa Rica, dairy facility it purchased from Florida Bebidas in 2016. The facility will initially process fluid milk for Walmart stores in the region, eventually expanding to other products including butter . . . Domino’s Pizza said it expects to add 9,700 new stores by 2025, more than two-thirds them in international markets. It projects sales will more than double to $25 billion over the same period . . . FrieslandCampina opened a 333,000-sq.-ft. distribution center in Meppel, Netherlands, for storage and transfer of dairy products meant for export markets. The facility holds 43,000 pallets and replaces four existing FrieslandCampina distribution centers . . . Laticínios Porto Alegre is spending $8 million to build a UHT milk processing facility in Rio Novo do Sul, Brazil . . . Malaysia’s Dutch Lady Milk Industries is planning a push into the hotel, restaurant and catering market. (USDEC Mexico office; USDEC Southeast Asia office; Company reports; Milkpoint, 1/18/19; Nation’s Restaurant News, 1/17/19)

February

Vietnamese dairy leader Vinamilk expects to open a dairy manufacturing plant in Myanmar this year as part of an aggressive global expansion initiative. The Myanmar facility will be its second in Southeast Asia after the company’s Cambodian facility, which debuted in 2016. Vinamilk is also discussing a joint venture in Indonesia and expects to enter the Chinese market this year. The company says it has set aside $750 million for mergers and acquisitions, plant constructions and farm investments. (Nikkei Asian Review, 1/25/19)

French dairy cooperative Sodiaal plans to invest €80 million (about US$91 million) to expand R&D activities centered around its new research hub in Rennes, France. About half the money is coming in the form of a loan from the European Investment Bank. The cooperative expects to focus on infant nutrition, functionalization of dairy components, processing technologies and new packaging for products targeting European as well as global markets. (European Investment Bank, 1/24/19)

Thailand’s CP Foods opened a new $43-million R&D center in Wang Noi that it expects will drive a 10-12% sales gain in 2019. The company plans to launch a line of “smart” products including functional drinks in the first quarter and develop other lines aimed at particular nutritional and dietary needs, such as foods and beverages for medical uses, specific groups including seniors or specific conditions like insomnia. Other areas of study will include sustainable packaging that minimizes environmental impact and biotechnology. (USDEC Southeast Asia office)

Singapore-based commodities giant Olam International plans to invest $3.5 billion over the next five years to strengthen high-growth-potential ag sectors, including dairy. Dairy investments will include farm expansions in Russia and spending on ingredient processing facilities in unspecified locations . . . Dubai’s Horeca Trade, a subsidiary of Bidfood Group, signed a deal to become the exclusive distributor of Fonterra’s Anchor Food Professionals foodservice products in the UAE . . . Former Fonterra Chairman John Wilson passed away at age 54. Wilson became a Fonterra director in 2003 and served as chairman from 2012 until July 2017 . . . Tetra Pak appointed company veteran Adolfo Orive as president and CEO to replace Dennis Jönsson, who is stepping down after 14 years at the helm. (USDEC Southeast Asia office; Company reports; Stuff.co.nz, 1/28/19)

Mazoon Dairy Co., a new, vertically integrated dairy company in Oman, received its first shipment of 1,600 dairy cows and expects to inaugurate its manufacturing plant in Al Sunayna in the second quarter of this year. The $260-million project was conceived as a means to reduce Oman’s dependency on dairy imports. Imports now account for about 70% of consumption. The facility will make milk, cream, yogurt, laban, cheese and ice cream. The company expects its farms will produce 200,000 tons of milk per year to start, growing to more than 900,000 tons per year. (Times of Oman, 2/3/19; Gulf Business, 2/4/19)

Milco, a consortium led by Israel’s Central Bottling Co. (CBC), offered $359 million for a 60% stake in South African dairy and consumer foods maker Clover Industries. CBC also owns Israel’s Tara Dairy . . . Coca-Cola purchased the outstanding 60% of Nigerian dairy and juice processor Chi Ltd. It bought a 40% stake in Chi in 2016 . . . Myen Pte Ltd, a Singaporean subsidiary of Danone, is forming a joint venture with Thai functional drink marketer Sappe to market healthy beverages in Thailand . . . Organic Meadow, a subsidiary of Canada’s Agrifoods International Cooperative, acquired the Rolling Meadow grass-fed dairy business from brand developer GreenSpace. Organic Meadow had been the primary contract packer for Rolling Meadow. (USDEC Southeast Asia office; Company reports; BusinessDay, 2/4/19; Reuters, 2/4/19; IEG Vu, 2/4/19)

Britain’s Dairy Crest is spending £75 million (about US$97 million) to upgrade and expand its Davidstow facility, increasing cheese production from 54,000 metric tons per year to 77,000 metric tons. Increased capacity is earmarked for domestic and overseas markets . . . Britain’s Crediton Dairy is investing £12 million (about US$16 million) to expand flavored and functional milk capacity at its Devon, UK, dairy plant. Product will be sold in domestic and overseas markets . . . British cheesemaker Wyke Farms is doubling capacity at its Bruton, UK, manufacturing plant to bolster capacity for global markets. The company’s five-year growth plan is focused on increasing export sales . . . Great Lakes Cheese is building a new 300,000-sq.-ft. manufacturing and warehousing facility and a new headquarters in Geauga County, Ohio . . . Blue Diamond Growers broke ground on a 52,000-sq.-ft. expansion at its Turlock, Calif., almond drink facility. The addition will boost production of the almond base for its Almond Breeze beverage to meet rising demand. (FoodManufacture.co.uk, 2/5/19; Cheese Reporter, 2/1/19; FoodBev.com, 1/30/19; Modesto Bee, 1/29/19; Food & Drink International, 1/28/19)

Wattle Health Australia paid A$46 million (about US$33 million) to increase its stake in Australian infant and nutritional formula contract manufacturer Blend and Pack from 5% to 51 %. The deal includes an option to acquire an additional 29 percent. Wattle has plans to expand overseas sales and distribution of organic milk powder products, with a focus on China. Blend and Pack is licensed to produce infant formula for China. Wattle said last month that it was awaiting accreditation from China’s State Administration of Market Regulation to start exporting organic formula to China. In late 2018, Wattle formed a joint venture with Organic Dairy Farmers of Australia to build a dedicated organic milk spray dryer in Geelong, Victoria. The partners expect to have the plant, Corio Bay Dairy Group, operational by the third quarter of this year. (Company reports; SmallCaps, 2/11/19)

DMK Group opened a €145-million (about US$164 million) infant formula plant in Strückhausen, Germany. The plant will produce formula for EU and international markets . . . Restaurant Brands International added 1,000 Burger King, Tim Hortons and Popeyes Louisiana Kitchen outlets globally in 2018 and the company plans to continue expanding its international presence. Speaking specifically about Burger King, the company said it is “still severely underpenetrated and has tons of white space to grow in most markets around the world” . . . Darigold named Grant Kadavy as chief operating officer effective immediately. Kadavy, who joined Darigold as chief commercial officer in 2016, is now responsible for strategic development, innovation, supply chain and day-to-day commercial operations and will take on a higher profile representing the co-op externally in the industry . . . China’s Yili Group signed a memorandum of understanding with German human milk oligosaccharides (HMO) firm Jennewein Biotechnologie to develop infant formula and dairy products specifically tailored to the Chinese market featuring HMO. (Company reports; Wall Street Journal, 2/11/19)

Australia’s Bega Cheese plans to build a new lactoferrin production facility at its Koroit, Victoria, manufacturing site. The A$34 million (about US$24 million) plant will produce about 35 tons of lactoferrin extract annually, complementing Bega’s existing lactoferrin plant at Tatura, Victoria. Production is earmarked for pharmaceutical and nutritional powder manufacturers. A new long-term lactoferrin supply contract was one of the drivers behind the project. (Finance News Network, 2/15/19; North Queensland Register, 2/14/19)

Brazilian conglomerates Sooro Group and Renner Herrmann agreed to merge their dairy ingredient businesses (Sooro Concentrado and Relat-Latícínios Renner) into a new company called Sooro Renner Participações. The company will focus on WPC, WPI, lactose, permeate, whey powder and derivatives. Sooro Renner will operate plants in Marechal Cândido Rondon, Paraná (also company headquarters), and Estação, Rio Grande do Sul. A third facility in southern Brazil is in the planning stages. (USDEC South America office; Company reports; Milkpoint, 2/13/19)

Glanbia plc paid US$89 million for Connecticut-based non-dairy ingredient business Watson Inc. Glanbia called it a “complementary addition to our Nutritional Solutions business [that] will help broaden our capabilities in the ingredients sector” . . . Hormel Foods sold its CytoSport business, including Muscle Milk products, to PepsiCo. PepsiCo is the long-standing distributor of Muscle Milk . . . Israel’s Central Bottling Co. bought its joint venture partner’s stake in Romania’s Muller Dairy Ro, the importer/distributor of the German Müller brand in Romania. (Company news; Minneapolis Star Tribune, 2/19/19; Romania Insider, 2/14/19)

Brazil’s Latícínios Tirol will start construction in June on a US$19 million UHT milk plant in Ipiranga in the Campos Gerais region. The facility, which will handle about 1,250 metric tons of milk per day, is due to open in January 2021 . . . Encouraged by strong demand for its UHT milk and ghee in Singapore and Hong Kong, India’s Tamil Nadu Cooperative Milk Producers’ Federation (also known as Aavin) began exporting UHT milk to Qatar this month and plans to expand to additional Middle Eastern and Asia markets later this year . . . Smucker’s Foods of Canada is spending US$9 million to add heavy cream capacity and increase packaging flexibility at its Sherbrooke, Quebec, dairy plant. (USDEC South America office; USDEC Southeast Asia office; Company news; a Rede, 2/8/19, 1/14/19)

 

March-3

Fonterra Co-operative Group took a minority stake in Boston-based bioengineered-food start-up Motif Ingredients. Motif, spun-off this week from Gingko Bioworks, is developing alternatives to animal proteins using biotechnology and fermentation to solve some of “the biggest challenges” facing the food industry: “sustainability and accessible nutrition.” Fonterra said it is making the investment to “futureproof” the co-op and because it believes plant, insect, algae and fermentation-produced nutrition will exist alongside animal proteins in the years ahead. Additional Motif investors include Louis Dreyfus Cos., Breakthrough Energy Ventures and Gingko. (Company reports; Xconomy, 2/26/19)

Ireland’s Carbery Group is spending €78 million (about US$89 million) to expand and diversify its Ballineen, Co. Cork, manufacturing site. The facility solely makes cheddar, but the project will add capacity for mozzarella and other cheeses to meet rising demand from emerging markets, particularly Asia and the Middle East. The expanded facility, when complete in early 2020, will process up to 4,100 metric tons of milk per day. (The Southern Star, 2/22/19)

Canadian dairy giant Saputo will pay about £975 million (about US$1.3 billion) to purchase British dairy processor Dairy Crest. Dairy Crest’s main manufacturing plant is the cheese and ingredient facility at Davidstow, where it recently announced a major expansion project. It also operates packaging, distribution and R&D sites. Saputo said the acquisition will enable the company “to expand its international presence and enter the UK market [with] a well-established and successful industry player with a solid asset base.” (Company news)

Australia’s Bega Cheese closed its Coburg, Victoria, cheese plant, citing the suburban Melbourne location as unsuitable for expansion . . . Bega also signed a partnership agreement with organic baby food and goat-milk formula marketer Bubs Australia. Under the terms of the deal, Bega unit Tatura Milk will turn fresh goat milk into infant formula nutritional base for Bubs . . . Mexico’s Grupo Lala announced a licensing agreement to distribute and market almond beverages in Mexico from Blue Diamond Growers . . . Gem State Dairy Products is building a 200,000-sq.-ft. aseptic milk processing plant in Twin Falls, Idaho. It expects to break ground this summer and complete the facility by summer 2020. (USDEC Mexico office; AAP, 2/27/19; Finance News Network, 2/27/19; KLIX 2/25/19)

Regulatory authorities gave the greenlight to the merger of Ireland’s Lakeland Dairies and Northern Ireland’s LacPatrick Dairies, removing the last significant hurdle to completing the deal . . . Private investment firm Borgman Capital acquired Wisconsin-based processed cheesemaker Gilman Cheese Corp. (BizTimes, 3/4/19)

New Zealand’s Fonterra Co-operative Group named interim CEO Miles Hurrell as its permanent chief executive effective immediately . . . Mike Durkin, president and CEO of Leprino Foods, and Lino Saputo Jr., chairman and CEO of Saputo Inc., joined the board of directors of Global Dairy Platform. (Company reports)

General Mills sold its Yoplait business in China to Chinese private equity investment fund Tiantu Capital. The deal includes a production facility in Kunshan, near Shanghai, and a license to the Yoplait name in China . . . Australian infant food manufacturer Bubs Organic is forming a joint venture with China’s Beingmate Baby & Child Food to distribute Bubs brand goat’s-milk-based infant formula and baby food products in China . . . Singapore-based palm oil trader Wilmar International paid US$300 million for the 50% of Australian dairy and food group Goodman Fielder that it did not already own . . . Colombia dairy processor Alpina Productos Alimentos purchased a 19% stake in importer/distributor Atlantic Food Service . . . Saudi Arabian dairy processor Almarai paid $29 million for value-added halal meat and poultry processor Premier Foods(USDEC China office; USDEC Southeast Asia office; USDEC South America office; USDEC Middle East office; New Zealand Herald, 3/12/19; FoodBev.com, 3/7/19)

Yum China opened an integrated R&D facility in Shanghai to speed development of new products targeting local taste preferences . . . Yum China is also partnering with Sinopec and China National Petroleum Corp. (CNPC) to open KFC locations at the two companies’ gas stations. The deals call for more than 100 units over the next three years. Sinopec and CNPC operate more than 50,000 total gas stations across China . . . New Zealand’s Fonterra Co-operative Group promoted Judith Swales to chief operating officer, Global Consumer & Foodservice. (USDEC China office; Company reports)

China’s Yili Group strengthened its Kiwi footprint with the purchase of New Zealand’s second largest dairy co-op Westland Co-operative Dairy. This is Yili’s second dairy purchase in New Zealand: It bought Oceania Dairy in 2013 and subsequently invested NZ$650 million in milk powder, infant formula and UHT milk production there. The Chinese dairy giant (through subsidiary Hongkong Jingang Trade Holding) is paying NZ$3.41 a share (equal to NZ$588 million or US$403 million) to acquire Westland. The proposed deal follows a strategic review by Westland’s board brought on by a series of disappointing farmer payouts. The board said it engaged with 25 parties before deciding on the Yili offer, which it unanimously approved. As part of the deal, Yili has agreed to pay existing Westland suppliers a competitive milk price at least equal to Fonterra Co-operative Group’s for the next 10 seasons starting with the year beginning in August 2019. Yili also will acquire NZ$342.5 million in Westland debt and other liabilities. Westland has been looking to increase the value of its farmers milk in recent years, investing NZ$134 million on infant formula capacity in 2016/17. Westland farmers will vote on the deal in early July. Initial reaction has been mixed, according to media reports this week. New Zealand regulators also must approve the deal. (Company reports; New Zealand Herald, 3/20/19)

French dairy co-op Sodiaal took over the processing portion of Synutra’s Carhaix, France, infant formula plant. China-based Synutra will continue to oversee packaging and has contracted for half the volume at Carhaix for distribution in China. The Carhaix facility can produce 65,000-80,000 tons of formula per year, depending on type. The two companies began discussing the changeover last summer. (Reuters, 3/12/19)

Fonterra sold its interest in its Venezuelan joint venture Corporacion Inlaca to trading company Mirona Food. As part of its plan to sell NZ$800 million in assets, the co-op also put its 50% stake in its DFE Pharma joint venture with FrieslandCampina on the market. DFE Pharma specializes in pharmaceutical excipients . . . Upstate Niagara Milk Cooperative paid an estimated $20 million-$25 million for the former Alpina Foods yogurt plant in Batavia, N.Y. Niagara said it had not yet settled on how it would use the plant, which had closed in January. (Company reports; The Daily News, 3/3/19; The Batavian, 3/2/19)

Nestlé opened a $12-million UHT beverage processing line for value-added milk-based products including Nesquik drinks, Nido and NAN infant and children’s formulas. The line is part of a four-year, $127-million investment in Argentina’s dairy market by the Swiss dairy and food giant . . . Wisconsin’s Cedar Valley Cheese expects to complete a $15-million expansion by the end of the month, doubling capacity and adding storage, a QC lab and other space. In addition to domestic sales, the company ships to Mexico and Canada . . . Minor Food Group plans to double the number of its restaurants in Thailand and internationally to more than 4,400 over the next four years. The company operates in 27 markets around the world, although 1,500 of its current 2,270 units are in Thailand, where it owns the Dairy Queen, Burger King, The Pizza Company, Swensen’s, The Coffee Club and other brands . . . Dine Brands, owner of the IHOP and Applebee’s names, plans to open its first IHOP store in Pakistan in Karachi by the end of the year, followed by 18 more units over the subsequent nine years. It has also recently signed deals to expand into Ecuador and Peru. (USDEC South America office; USDEC Southeast Asia office; Milkpoint, 3/18/19; Bloomberg, 3/18/19; Ozaukee Press, 3/13/19)

Danone officially opened its new €240-million Nutricia infant formula plant in Cuijk, Netherlands. Danone is billing the plant as a “sustainable, zero-waste facility powered with 100% renewable energy.” The plant doubles the capacity of the older Cuijk facility it is replacing while using 60% less water and 25% less energy and emitting half the CO2. It produces specialized infant formula for babies with specific health needs. (Company reports)

Nestlé opened a new R&D center in Beijing and a system technology hub in Shenzhen. The R&D center, with 40 specialists working across multiple product sectors, aims to accelerate trend-based innovation in what the company calls “one of the fastest-changing food and beverage markets in the world.” It features a consumer insights area, a rapid-prototyping lab and other product development resources and will work closely with local universities and innovation partners. The system technology hub’s focus is on beverage systems. (Company reports)

Vietnam’s Vinamilk offered to buy a 47% stake in GTNFoods for $65 million. GTNFoods is majority shareholder of Moc Chau Milk Co., one of the largest milk producers in north Vietnam, with a herd of more than 23,000 cows . . . Colombian dairy co-operative Unilac is merging with Colombian dairy and food company Colanta . . . Kroger Co. is selling its Turkey Hill Dairy operation in Pennsylvania to investment firm Peak Rock Capital(USDEC South America office; Vietnam Investment Review, 3/14/19)

Irish Farmers Journal reported that Coca-Cola is considering building a dairy processing plant in County Cork. Coca-Cola called the report “speculative” and said that recent meetings with officials were part of its normal course of doing business. . . Dairy Farmers of America (DFA) joined GDT Marketplace, Global Dairy Trade’s 24/7 online dairy trading platform. DFA products on GDT Marketplace will include milk powder, MPC, AMF and cheese. (The Irish Times, 3/28/19; GDT)

April-2

Australian goat’s milk infant formula marketer Bubs Organic paid A$25 million (plus A$10 million in Bubs stock) for Melbourne-based Deloraine Dairy. Deloraine owns one of 15 Australian infant formula canning facilities licensed by Chinese regulators to export to China. The plant’s capacity is 10 million tins per year, but Bubs said it could double output with incremental capital investment. Bubs has been moving aggressively this year to secure Chinese expansion, signing a contract manufacturing deal for infant formula base with Bega Cheese in February and securing a joint-venture distribution deal with China’s Beingmate Baby & Child Food last month. In tandem with the Deloraine deal, Bubs also secured A$15 million in funding from China-focused private equity firm C2 Capital Partners. (Business News Australia, 4/1/19)

Sill Group is spending €85 million (about US$95 million) for a new milk drying tower in Landivisiau, France, to produce infant formula. The investment is part of a five-year, €180-million company-wide investment plan. When completed, Sill expects to produce 18,000 tons of infant formula annually at Landivisiau exclusively for export to China, the Middle East and Africa. It expects to begin production at the beginning of 2021. (L’Usine Nouvelle, 3/26/19; web-agri, 3/25/19)

Ireland’s Lakeland Dairies and Northern Ireland’s LacPatrick Dairies officially merged. Michael Hanley, current CEO of Lakeland Dairies, will remain as head of the combined organization Lakeland Dairies Co-operative Society . . . Switzerland’s Emmi acquired a two-thirds stake in Austrian goat and sheep’s milk processor Leeb Biomilch GmbH. Leeb Biomilch also began marketing a dairy alternative line in 2016 called MyLove-MyLife based on almonds, coconut and oats . . . Germany’s DMK Group acquired the baby food brands and sales and distribution channels of fellow German food processors Alete GmbH and German Babyfood GmbH. DMK expects the brands will complement its infant formula line. (Company reports; Agriland, 4/1/19)

McDonald’s plans to open 400 new stores in mainland China this year . . . Milkom, a unit of Russia’s Komos Group, reportedly signed a contract with China’s Li Hua Economic and Co. to ship 40 tons of ice cream and 500 tons of “other” dairy products per month to China. The company did not specify what the other products were . . . Norwegian dairy TINE and food and personal care giant Orkla are reportedly collaborating to add cheddar manufacturing capacity to TINE’s Meieriet Verdal plant in central Norway. Output is earmarked for Orkla pizzas, although TINE says domestic demand for cheddar at retail and in processed foods is rising in Norway. (USDEC China office; Dairy Markets, 3/27/19; The Dairy News, 3/25/19)

China’s Health & Happiness International Holdings purchased the Farmland Dairy infant formula blending and packaging plant in Auburn, New South Wales. The company is looking to expand into goat-milk formula under its Biostime brand . . . Australian Dairy Nutritionals Group, owner of Camperdown Dairy, purchased A$5 million in used infant formula and cheesemaking equipment and plans to install it at its Camperdown facility in Victoria. (Australian Financial Review, 4/4/19; The Weekly Times, 4/4/19)

Chicago-based Fairlife is building a new $200-million-plus milk processing facility in Goodyear, Ariz., to produce products for domestic and international markets. The company expects to begin operations in the second half of 2020 . . . Nestlé opened a $2-million Latin American business support center in Asunción, Paraguay. The operation will offer internal support (human resources, financing, accounting, etc.) to Nestlé’s operations in 21 countries in the region . . . Australia’s Camperdown Dairy extended its production contract with New Zealand yogurt brand The Collective for an additional two years until 2024. (USDEC South America office; Company reports; AAP, 4/7/19)

Hilmar Cheese Co. is selling its Turlock, Calif., milk powder facility to California Dairies Inc. (CDI). The sale aligns with Hilmar’s new strategic focus announced in March, which looks to “evolve and adapt” the company to the changing business environment. That includes focusing on three core product areas: cheese, whey protein and lactose. Hilmar completed the plant in 2015. The deal is expected to close in May. (Company reports)

Polish dairy processor Polmlek acquired a 30% stake in fellow dairy Lacpol and claims it has lined up enough shares from additional investors to give it a controlling interest. The combined operations of Polmlek and Lacpol would make the company the No. 2 dairy in Poland just ahead of Mlekpol and behind only Mlekovita. Together, Polmlek and Lacpol operate 15 manufacturing plants. (Dairy Markets, 4/15/19; Forbes, 4/9/19)

Italian dairy processor Granarolo increased its stake in Italian cheesemaker Venchiaredo from 33.5% to 57.5%. Venchiaredo specializes in stracchino cheese . . . FrieslandCampina sold Creamy Creation (its cream liqueur operation) to Dutch investment company Wagram Equity Partners . . . Bubs Australia sold its Coach House Dairy flavored milk brand to Australian dairy marketer The Remarkable Milk Co. Remarkable Milk targets Asia Pacific retail markets with organic and conventional dairy and nutritional products . . . South Africa’s Brimstone Investment Corp. is pulling out of the consortium to buy South Africa’s Clover Industries amid opposition from an anti-Israel group. The consortium, Milco SA, is headed by Israeli beverage firm Central Bottling Co. Brimstone has secured two possible investors to take its place. (Company reports; just-food.com, 4/17/19; Reuters, 4/12/19; FoodBev.com, 4/12/19)

Glanbia Ingredients Ireland expects the latest expansion at its Belview, Co. Kilkenny, plant will be fully operational just ahead of peak EU milk flows in May. The €160-million project includes new milk intakes, pasteurizers, evaporation facilities, drying facilities and bagging equipment. It will increase raw milk handling capacity at Belview by 15,500 tons per week . . . Brazilian dairy processor Lacticínios Tirol more than doubled its investment in a new UHT milk processing facility in Ipiranga, Paraná, to US$39 million. When completed in 2021, it will handle 620 metric tons of raw milk per day. (USDEC South American office; Agriland, 4/15/19)

Fonterra Co-operative Group and Coca-Cola formed an “exploratory” alliance to launch ready-to-drink beverages in Southeast Asia starting in Vietnam. The first item from Asean Fonterra & Coca-Cola Strategic Alliance is a milk/fruit juice drink under Coca-Cola’s Nutriboost label. The new Nutriboost line, which debuted last week in Vietnam, is made from a Fonterra recipe and features Fonterra milk powder but is contract manufactured by a third party. The Alliance next plans to target Indonesia and Thailand. A range of products is in the works, including children’s beverages, adult breakfast drinks and a skincare line. Some will reportedly feature Fonterra’s Anchor brand name. Clare Morgan, the Alliance’s marketing director, said the project is exploratory at the moment but could develop into a full-fledged joint venture over time. “Coke certainly wants to become more dairy based,” she said. (USDEC Southeast Asia office; New Zealand Herald, 4/20/19, 4/18/19)

Mehsana Dairy, one of the founding members of Indian dairy behemoth Gujarat Cooperative Milk Marketing Federation (also known as Amul), plans to cut ties with the co-op and go out on its own. Mehsana reportedly accounts for about 10% of GCMMF’s $4.7 billion in annual revenues. The company will start its own label Dudhsagar, since it will lose access to the flagship Amul brand. Media reports suggested the divorce was triggered by infighting between Mehsana and Amul leadership, exacerbated by the varying political links between GCMMF’s 17 member co-ops. (Business Today, 4/23/19)

Iowa-based Wells Enterprises acquired Fieldbrook Foods, which operates ice cream plants in New York and New Jersey. The move expands Wells’ capacity and extends its geographic coverage . . . Cheese wholesaler Zijerveld, a unit of FrieslandCampina, acquired Dutch cut-and-wrap operation W. Bakker Kaashandel(Company reports; Foodnews, 4/17/19)

Malaysia’s QSR Brands Holdings plans to open 60 Pizza Hut and 67 KFC outlets nationwide over the next three years. The company is also exploring collaborating with Pizza Hut Japan and KFC Japan to develop Halal-certified stores in Japan and train personnel to handle the influx of Muslim tourists for next year’s Tokyo Olympics . . . Luckin Coffee Inc., a Chinese challenger to Starbucks, is looking to raise up to $800 million through an IPO next month. Luckin operates 2,370 stores in China with plans to open another 2,500 this year, a feat that would displace Starbucks as China’s largest coffee chain. (USDEC Southeast Asia office; Reuters, 4/22/19)

May-2

Judging by two recent new product rollouts, Nestlé has its eyes set on nutritional appeal when it comes to dairy R&D in Southeast Asia. Nestlé Thailand unveiled Milo UHT No Sucrose, a product deliberately developed to reflect the government public health policy of encouraging Thai people to consume an appropriate amount of sugar in their diets. The product carries the Thai Healthier Choice logo, a state-backed labeling scheme started in 2016 that aims to improve national health. Meanwhile, Nestlé Indonesia rolled out Nestlé Acticor, a milk-based drink containing beta glucan (a sugar with immune enhancing qualities) and inulin (sometimes used to lower cholesterol). Heart disease is the No. 1 cause of death in Indonesia, and the Acticor marketing campaign is built around heart health. The product also aligns with the Indonesian government initiative “Movement for Healthy Living Society,” which encourages healthier dietary patterns to improve quality of life. (USDEC Southeast Asia office; Company reports; Indopos, 4/29/19)

Coca-Cola Mexico opened a new $105-million fluid milk and juice plant in Lagos de Moreno, Jalisco. The facility, part of Coca-Cola’s Jugos del Valle-Santa Clara non-carbonated beverage division, can produce 120 million liters per year. It is the company’s second milk facility in Mexico; the first is in Pachuca, Hidalgo. The Lagos de Moreno plant will initially produce milk under the Santa Clara label for the domestic market, but Coca-Cola is eyeing export opportunities in Latin America and the United States as well. (USDEC Mexico office; Company reports; Forbes, 4/29/19)

Canada’s Saputo entered into an agreement to purchase the specialty cheese business of Australia’s Lion-Dairy & Drinks for A$280 million (about US$208 million). The deal includes two manufacturing plants located in Burnie and King Island, Tasmania, two dairy farms and a number of brands, including Mersey ValleySouth Cape and King Island Dairy. Saputo previously purchased Lion’s CoonCracker Barrel and Mil Lel cheese lines in 2015. Saputo says the deal will further diversify its product offerings, expanding and complementing its current activities in Australia. Lion is still looking to divest its fluid and fresh dairy operations in Australia. (Company reports; North Queensland Register, 4/19/19)

Australia’s Freedom Foods completed a key commissioning step for a new lactoferrin production line at its Shepparton, Victoria, manufacturing site. It expects to produce 16 tons of lactoferrin annually. The plant also began producing micellar casein in February and native whey protein isolate in March . . . Russia’s Galactika Group expanded its partnership with Finland’s Valio, opening a new production line for yogurt and dairy desserts at its facility in Gatchina, Leningrad Oblast . . . Domino’s Pizza expects to add nearly 10,000 additional locations in 85 markets worldwide by 2025 . . . Ornua’s Kerrygold brand is the first Irish food brand to top €1 billion in retail sales, according to Irish Ag Minister Michael Creed . . . Northern Ireland’s Dale Farm is not renewing the contract for the Fivemiletown Creamery cheese plant it was leasing from Fivemiletown & Brookeborough Co-operative. The company will transfer production to its facility near Culleybackey. (Newstalk, 4/30/19; Agriland, 4/25/19; The Dairy News, 4/25/19; Yahoo Finance, 4/24/19; Motley Fool, 4/3/19)

Infant formula marketer Bubs Australia signed a deal with Fonterra Australia whereby Fonterra will supply Bubs with organic milk powder for a new line of infant formula under the Bubs Organic label. Bubs will distribute the formula in Australia starting June 1, with distribution in China to follow via its joint venture with Beingmate Baby & Child Food and through Chinese ecommerce giant Tmall. Bubs is aggressively pursuing the Chinese infant formula market, cutting a series of deals over the past three months to bolster manufacturing and distribution. Fonterra will reportedly source the milk from its New Zealand organic milk pool and manufacture the powder at its Darnum, Victoria, Australia plant. Fonterra recently regained full ownership of the Darnum plant after exiting its Australian joint venture with Beingmate. (New Zealand Herald, 5/7/19; Small Caps, 5/6/19)

Dutch dairy giant FrieslandCampina reorganized its ingredients business, folding its four individual operating companies—DOMO, Kievit, DMZV and Nutrifeed—into a new product-oriented structure to better tap into the growing global nutrition market. The former operating companies are now four strategic segments: Early Life Nutrition; Adult Nutrition (performance, active and medical nutrition); Food & Beverages; and Animal Nutrition. FrieslandCampina Ingredients runs five regional sales offices located in Brazil, China, the Netherlands, Singapore and the United States. (Company news)

Canada’s Saputo announced plans to close its Dresser, Wis., cheese facility at the end of the month. It acquired the plant late last year with its purchase of F&A Dairy Products . . . The government of Canada is investing C$1.5 million (about US$1.1 million) to modernize equipment at the St-Albert Cheese Co-operative facility in Ontario. The money is part of the government’s Dairy Processing Investment Fund, which was established to help the nation’s dairy sector cope with increased competition due to the EU-Canada Comprehensive Economic and Trade Agreement. (Company reports; The Sun, 5/3/19)

New Zealand’s Synlait Milk insists that it is “working through” an appeals court ruling that calls into question its rights to build a nutritional powder facility in the North Island town of Pokeno. The trouble is that the NZ$250-million facility is nearly complete. Synlait started constriction last May after the original court ruling removed covenants restricting the land to grazing, lifestyle farming and forestry. The new ruling says those covenants never should have been lifted. The Pokeno plant was supposed to be ready for the start of the 2019/20 production season. It has a reported capacity of 45,000 tons per year. (Company reports; Newsroom, 5/13/19)

New Zealand’s Fonterra sold its Tip Top ice cream brand and manufacturing facility in Auckland to Froneri, the UK-based ice cream joint venture between Nestlé and R&R Ice Cream. Froneri also acquired the license to manufacture Fonterra’s Kapiti ice cream brand . . . Australian dairy and poultry processor TasFoods paid US$8 million for fellow Tasmanian dairy Betta Milk. Betta recently upgraded its manufacturing plant in Burnie, Tasmania . . . Troubled Argentine food company Arcor increased its stake in struggling Argentine dairy processor Mastellone to 43%. (USDEC South America office; Company reports; AAP, 5/13/19)

New Zealand’s Fonterra Co-operative Group lowered the high side of its projected farmgate milk price by 20 cents, dropping its payout range for the year ending May 31 to NZ$6.30-$6.40 kg/MS. It also lowered its earnings per share to 10-15 cents (from 15-25 cents). Both numbers are at the low end of analysts’ expectations, suggesting Fonterra is still struggling to find its footing. The co-op continues to look for ways to improve its financial performance and reduce debt after a lackluster year. It announced it was closing its milk powder plant in Dennington, Victoria, Australia, and embarking on a strategic review of its two Chinese farm hubs and its Dairy Partners America Brazil joint venture with Nestlé. Dennington has reportedly been operating at about 30% capacity, in part due to reduced milk flows in Australia. The strategic reviews relate to the co-op’s efforts to prioritize its New Zealand milk supply and simplify its global portfolio. (Company reports; Stuff.co.nz, 5/22/19)

Darigold added four in-country sales and logistics personnel in Mexico to enhance customer service and deepen integration with its Mexican customers. The company expects the additions will “enable greater insight to provide solutions tailored for customer- and country-specific needs.” Darigold does business in Mexico as Darigold Mexico and NW Dairy Pioneers. (Company reports)

The owner of New Zealand Industrial Park Ltd. sent a cease and desist request to Synlait Milk calling for the company to halt work on its Pokeno, North Island, nutritional powder facility. The park is adjacent to the under-construction facility, and the owner, Qing Ye, is the person behind the challenge to Synlait’s right to build a factory on the land. Despite the cease and desist request, Synlait said it would continue construction and it plans to have the facility ready to receive milk for the 2019-20 season. Synlait said it was discussing the matter with all involved parties but believes the project is consistent with zoning rules. (Stuff.co.nz, 5/22/19; Otago Daily Times, 5/22/19)

California Dairies Inc. completed its acquisition of Hilmar Cheese’s Turlock, Calif., milk powder plant . . . France’s Lactalis said it was looking to acquire a dairy company in northern India to make it a truly national player in the country. Lactalis has built its business in India through acquisition, purchasing Tirumala Milk Products in 2014, Anik Industries in 2016 and Prabhat Dairy earlier this year. (Company reports; The Hindu Business Line, 5/14/19)

The threat from plant-based dairy alternatives continues to spread, with food companies in Asia and South America rolling out products aimed at shifting consumers away from dairy. Thai natural products maker Heritage Group rolled out a pistachio beverage under the Sunkist brand. Chinese mineral water marketer Nongfu Spring launched a plant-based “yogurt” made from non-GMO soy beans. Chilean start-up Not Co. developed plant-based “milk” and “ice cream.” And Sweden’s Oatley opened a sales office in Shanghai and hopes to build a Chinese manufacturing facility for its oat-based beverage. The company has gone as far as developing a new Chinese character for “vegan milk,” but it also markets its line in Asia using the tagline “the new milk.”  Highlighting dairy protein’s nutrition and sustainability benefits in the face of stronger competition from alternative proteins is a primary goal of USDEC’s ingredient program and plays a significant role in industry outreach. (USDEC staff; USDEC South America office; USDEC Southeast Asia office; South China Morning Post, 5/28/19; FoodNavigator-Asia.com, 5/20/19)

New Zealand’s Happy Valley Milk secured the necessary consents to build an NZ$280-million (about US$183 million) infant formula and nutritional powder plant in Otorohanga on the North Island. Groundbreaking is set for September and the company expects to have the facility completed by August 2021. Happy Valley plans to use A2 and organic milk to make its products. (Rural News Group, 5/28/19)

French dairy giant Lactalis signed a deal with the Brazilian state of Minis Gerais, wherein Lactalis will invest US$9 million in the region. The money is earmarked for plants in Pouso Alto, Ravenna and Curral Novo for a series of projects, including brie and parmesan production lines. As part of the deal, Lactalis committed to training and hiring additional staff, while the government agreed to assist Lactalis in finding new milk suppliers. (USDEC South America office; Diário do Comércio, 5/28/19)

Mondelez International completed the sale of its Kraft-branded cheese business in the Middle East and Africa to Arla FoodsPhiladelphia cream cheese and Jocca cottage cheese were not part of the deal . . . Italian confectionery company Ferrero bought a controlling stake in Spanish ice cream manufacturer Ice Cream Factory Comaker . . . Subsidiaries of Hong Kong-based retailer Dairy Farm International and Singapore dairy, food and beverage firm Fraser & Neave purchased the license to operate Starbucks outlets in Thailand. Their joint venture, Coffee Concepts Thailand, now controls 372 Thai Starbucks units and plans to focus on accelerating new store development. (USDEC Southeast Asia office; Arabian Business, 5/29/19; FoodBev.com, 5/29/19; Bloomberg, 5/23/19)

Australia’s Freedom Foods is looking to raise A$130 million (about US$90 million) to meet rising demand for UHT milk products in Australia, China and Southeast Asia. About A$100 million of the funds would go to expanding its Shepparton, Victoria, facility . . . F&N said it plans to reformulate about 70% of its product portfolio to offset Malaysia’s new sugar tax set to take effect July 1. The tax will add a penny per liter for drinks that exceed certain baseline sugar content guidelines, including a number of dairy-based drinks. (USDEC Southeast Asia office; Country News, 5/29/19)

June-2

Arla Foods is moving certain processed cheese and sterilized cream production lines from plants in Denmark and Saudi Arabia to its recently acquired manufacturing facility in Manama, Bahrain. Arla gained ownership of the Manama plant as part of its purchase of Mondelez International’s Middle Eastern processed cheese business. The Manama plant’s current capacity exceeds 66,000 tons per year. Arla is moving an estimated 26,000 tons of annual processed cheese capacity from its Bislev site and 18,000 tons from its AKAFA site (both in Denmark). And unspecified volume is shifting from its Riyadh, Saudi Arabia, facility. Arla said the reorganization will provide supply-chain advantages and heighten its competitiveness, since the products making the move are primarily sold in the Middle East and North Africa. One big benefit: It is gaining four weeks of shelf-life due to reduced shipping times. It also said the pilot plant in Manama will help improve the company’s capacity to innovate to regional trends. (Company reports)

Vietnamese infant formula maker Vietnam Nutrition Food Co. (NutiFood) officially opened its joint-venture manufacturing facility in Bjuv, Sweden. NutiFood owns half the facility while Swedish dairy co-op Skånemejerier Ekonomisk Förening and Swedish private investment firm Backahill Group each own 25%. The $20-million facility will produce about 5,000 tons of infant formula and 10,000 tons of milk powder annually for European and international markets. A planned Phase 2 expansion will focus on fresh and canned organic milk. (USDEC Vietnam office)

French dairy giant Lactalis acquired Italian cheese manufacturer Nuova Castelli, buying an 80% stake from UK investment fund Charterhouse Capital Partner and the remaining 20% from additional stakeholders. Nuova Castelli operates 13 sites in Italy and three abroad in Hungary, Poland and the United States. It recorded turnover of €460 million (about US$518 million) in 2018, about 70% of which came from exports. Nuova Castelli produces a number of Italian cheeses, including Parmigiano Reggiano and Mozzarella di Bufala Campana. The deal bolsters Lactalis’s already hefty Italian brand portfolio, including ParmalatGalbaniInvernizziVallelataLocatelli and Cademartori(Le Courier, 5/31/19; FoodBev.com, 5/31/19)

Citing unnamed sources, Britain’s The Telegraph revived speculation that Mondelez International is exploring the sale of its Philadelphia cream cheese business. Rumors that the company is looking to offload the brand have been circulating on and off over the last four years. (The Telegraph, 6/1/19)

Prairie Farms Dairy recently introduced milk snacks, new ice cream flavors and premium milk in quart and 14-ounce containers. New products also include small batch ice cream, available in 25 flavors and whole milk yogurt. Besides keeping up with changing consumer demands, these efforts are meant compete with alternative beverages. (FarmWeekNow.com, 6/11/19)

Four USDEC members are represented on the list of finalists for the 2019 World Dairy Innovation Awards. Darigold is a finalist in the best dairy drink category for its FIT product. Sargento Foods is a finalist in best dairy snack for Sunrise Balanced Breaks, and Agropur for best butter/dairy spread for Natrel Whipped Cottage Cheese DipDairy Farmers of America is a finalist in four categories: best functional dairy (Live Real Farms Whole Milk Smoothies); best manufacturing/processing innovation (GoPro Camera Installation at Scale), best marketing campaign or initiative (Mud Season Milk), and best new brand/business (Craig’s Creamery). The World Dairy Innovation Awards celebrate and highlight the best dairy industry developments. Winners in all 22 categories will be announced on June 26. (FoodBev Media, 6/4/19)

Lao-Jagro—a joint stock company with investors from Laos and Japan—and Vietnam’s Vinamilk have started construction of an organic dairy “resort’ in Xiangkhouang, Laos. The long-term goal is to develop a farm complex with 100,000 cows, up from the initial 24,000 cows … Saputo Inc. has announced the renewal of its partnership with Le Grand défi Pierre Lavoie, a non-profit organization representing one of the largest health movements in Quebec. Saputo is contributing more than $2.1 million over four years to fund two events: a 270-kilometer youth running relay and a 1,000-kilometer cycling relay. (Dairy Reporter, 6/11/19; Global Newswire, 6/11/19) 

Taiwan’s Jetton Biochemistry Co. plans to open a new facility in Nampa, Idaho, creating 25 jobs and processing 2.4 million pounds of milk per year. It will be a blended powder factory that produces a proprietary dairy formula, according to a press release from the Idaho Department of Commerce … Chinese dairy processors Yili and Mengniu are adding new manufacturing sites to pump up production of fluid milk products. Mengniu announced it is building a new factory in Jiaozuo and Yili will reportedly build a fluid milk site in Lin Dian County … Retailer Spinneys has announced plans to open eight more supermarkets in the United Arab Emirates this year … Oman Food Investment Holding Company has reportedly secured $46 million in financing for new food projects in the Middle East … UK dairy company Müller says it is targeting a total sugar reduction of 25% across its branded yogurt portfolio by June 2020 … At least three dairy companies have expressed an interest in buying Fonterra’s Dennington site—a milk powder and cream production facility on the outskirts of Warrnambool, Australia. Fonterra announced last month that it plans to close the plant. (Idaho Press, 6/11/19; Food Navigator, 6/6/19; Arabian Business, 6/1/19, 6/4/19; Dairy Reporter, 6/11/19; The Weekly Times, 6/11/19)

Darigold has expanded its Mexico operations, hiring four new team members to increase market presence and target a growing Mexican middle class. “We are excited to grow our team in Mexico to deliver services through the addition of these talented individuals,” said Jonathan Spurway, leader of Darigold’s ingredients business. “Given their experience, we are confident the team in Mexico will be able to help Darigold create and foster direct relationships with our customers in Latin America and thereby better understand and serve their unique needs.”

Arla Foods has developed a new artificial intelligence tool to better predict milk production from its farmer-owners, which will allow the Denmark-based dairy cooperative to better utilize the milk it receives and make the value chain more sustainable. Arla’s AI tool predicts milk production from 1.5 million cows in only a few hours rather than days. And the predictions are more accurate than when they were made manually using Excel sheets. (Dairy Reporter, 6/17/19)

Swiss dairy company Emmi is increasing its stake in Laticínios Porto Alegre Indústria e Comércio S/A, based in Brazil, from 40% to 70% … New Zealand’s Keytone Dairy Corporation has executed a binding agreement for the strategic acquisition of Omniblend Pty Ltd for A$22.6 million (US$15.5 million). Omniblend is an Australian developer and manufacturer of health and wellness powdered and UHT drink products. (Dairy Reporter, 6/18/19, 6/17/19)

Construction on the $260 million Mazoon Dairy in Oman is 80% complete, and the facility is set to open in July. The dairy is expected to house 5,000 dairy cows by the end of this year – and 25,000 eventually … Saputo Inc. completed a series of acquisitions last year which contributed to higher revenues. In the fiscal year ending in 2018, Saputo posted CAD$11.5 billion (US$8.6 billion) in revenues, which increased by 17% in 2019 … Ekosem-Agrar AG, the German holding company of Russian milk producer EkoNiva Group, has built a 6,000-cow facility in Siberia’s Novosibirsk region … U.S. free-range milk company Hart Dairy has secured $10 million in funding to expand its dairy product capabilities and continue to innovate its animal-welfare practices. Australian-based investment firm Alium Capital helped the process. (ConstructionWeekOnline, 6/11/19; Dairy Reporter, 6/17/19; FoodBev Media, 6/7/19)

Fonterra Co-operative Group sold its 51% stake in UK WPC-maker Fast Forward to its joint venture partner First Milk. Effective next month, First Milk will become the sole owner of the joint venture’s WPC manufacturing operation at its Lake District Creamery plant. In addition, First Milk unveiled a new sales and distribution partnership with Havero Hoogwegt, part of the Hoogwegt Group. Havero Hoogwegt sells to more than 50 countries and will market Fast Forward’s products. Separately, Fonterra is launching a line of value-added dairy products including UHT milk, milkshakes and yogurt in India through Fonterra Future Dairy, its joint venture with India’s Future Consumer. Fonterra Future Dairy will collaborate with contract processor Schreiber Dynamix Dairies for the initial rollout in Mumbai this month. It expects to start producing its own products at a facility in Tumkur, Karnataka, as it expands distribution nationally. Fonterra is also looking at expanding the product range to include paneer and other cheese. Fonterra originally entered India 20 years ago through a joint venture with Britannia Industries. It exited that JV in 2007. (FoodBev.com, 6/25/19; Dairy Markets, 6/18/19)

Land O’Lakes and Dutch ag co-op Royal Agrifirm Group are setting up a dairy animal feed joint venture in China. The new company, Agrilakes, will initially be based in Agrifirm’s existing manufacturing plant in Tianjin, with plans to build a new dairy premix and specialty plant on adjacent property. Chinese dairy farm growth in northwestern China and producers’ growing sophistication is driving demand for enhanced animal nutrition and productivity, the companies said. (Company reports)

Saudi Arabia’s National Agricultural Development Company (NADEC) announced it was abandoning plans to acquire Al Safi Danone (the Saudi Arabian joint venture between Danone and Al Safi Holding). The deal has been in the works since early 2018. NADEC and Al Safi Danone said the deal was no longer in either company’s best interests . . . Mexican dairy processor Grupo Lala finalized its acquisition of the Costa Rican dairy brand Mu! from owner Florida Ice and Farm Co. Earlier this year. Lala completed a $14-million upgrade to its San Ramon, Costa Rica, dairy facility . . . Central American investment firm Mesoamerica Group purchased a 35% stake in Colombian dairy manufacturer Alquería(USDEC South America office; La Republica, 6/26/19; The National, 6/23/19)

Japanese dairy trader Lacto Japan Co. plans to establish a wholly-owned sales unit in the Philippines by October to address rising dairy ingredient demand in the country. The official name for the unit will be Lacto Asia (Philippines) Inc. . . . Irish food promotion group Board Bia opened a new office in Tokyo, its third in Asia . . . China’s Junlebao Dairy plans to open a $72-million infant formula and adult nutritional milk powder facility in Tangshan City in October. Plant capacity is reportedly 22,000 tons per year. (USDEC China office; USDEC Southeast Asia office; USDEC Japan office)

july-3

Darigold opened a new sales office in Dubai to enhance customer service and integration across the Middle East and Africa. “Direct relationships are critical to serving customers,” said Jonathan Spurway, leader of Darigold’s Ingredients business. “Through true insights and a deep understanding of their business, we can better deliver excellent service and quality, as well as what our customers want and need.”

Westland Milk, New Zealand’s No. 2 dairy co-op, voted to approve the company’s sale to China’s Yili Industrial Group. Ninety-four percent of Westland shareholders supported the deal; the minimum needed to approve was 75%. The deal still requires approval from New Zealand’s Overseas Investment Office and High Court. Should it clear the final hurdles, shareholders will receive NZ$588 million and the co-op structure would be dissolved. As part of the deal, Yili will continue to pick up shareholder milk for a minimum of 10 years at a minimum price at least equal to the Fonterra Co-operative Group farmgate milk price. (Stuff.co.nz, 7/4/19; Newshub, 7/4/19)

France’s Lactalis and Mexico’s Grupo Lala reached an agreement to end litigation over the ownership of Brazilian dairy processor Itambé Alimentos, with Lactalis taking full ownership of Itambé. The dispute had been active since 2017 when Lala acquired Itambé co-owner Vigor Alimentos but Itambe’s other co-owner, Brazilian co-op Cooperativa Central dos Produtores Rurais de Minas Gerais (CCPR), exercised a right to buy Vigor’s shares. CCPR signed a long-term supply deal with Lactalis this week after the deal between Lala and Lactalis. Lactalis’s ownership of Vigor makes it the largest dairy processor in Brazil. (Milkpoint, 7/11/19; Reuters, 7/10/19)

Lactalis purchased Vermont-based Commonwealth Dairy from German owner Ehrmann AG. Commonwealth manufactures yogurt at a plant in Brattleboro . . . Fonterra sold its stake in German sport nutrition company Goodminton A.G. for NZ$64 million (US$42 million). The deal arose after Goodminton sold its targeted nutrition business Foodspring to Mars Inc. Fonterra said it expects to continue its supply relationship with both companies . . . Froneri acquired Israel’s Noga Ice Cream, a subsidiary of Osem-Nestlé. Nestlé will retain 50% ownership of Noga since Froneri is a 50/50 Nestlé joint venture with PAI Partners  . . . China’s Mengniu Dairy is selling its 51% stake in Junlebao Dairy for $585 million to Shijiazhuang Penghai Venture Capital Fund and corporate management firm Shijiazhuang Junqian Enterprises Management Corp. (VT Digger, 7/8/19; Globes, 7/5/19; Reuters, 7/1/19; New Zealand Herald, 6/28/19)

The UK’s Dairy Crest changed its name to Saputo Dairy UK . . . Arla Foods signed a new 12-year license agreement with Kraft Heinz to continue using the Kraft name on cheese products in the Middle East. Arla acquired the Kraft branded cheese business in the Middle East from Mondelēz International earlier this year . . . Peruvian dairy processor Grupo Gloria reopened a shuttered dairy facility in Nueva Helvicia, Uruguay. The company aims to produce cheese for export . . . Müller Milk and Ingredients plans to close its Foston, UK, processing plant by year-end as part of a cost-cutting campaign . . . After failing to locate a buyer, Britain’s First Milk is closing its Arran Creamery in Scotland. It continues to seek a buyer for its Scottish Campbeltown Creamery. (USDEC South America office; Company reports; BBC News, 7/11/19; DairyReporter.com, 7/3/19)

Foreign dairy manufacturers continue to innovate to attract new customers and bolster sales. Here are some recent notable rollouts:

  • China’s Mengniu Dairy rolled out what it is billing as a hangover recovery yogurt, with 80mg of Pueraria powder per 100g of yogurt. The powder comes from the Pueraria mirifica plant found in northern Thailand and Myanmar. The plant has a history of use as a folk remedy said to possess anti-aging properties.
  • Thailand’s CP Meiji is partnering with sandwich chain Au Bon Pain in Thailand to roll out a lactose-free version of boba tea (also known as bubble tea) in three flavors to capitalize on the milk tea trend. CP Meiji introduced lactose-free milk last year.
  • Starbucks Brazil stores started carrying Natural Whey yogurt from Brazilian dairy processor Verde Campo. The lactose-free, zero-sugar (stevia-sweetened) line contains 14g to 21g of protein, 70% of which comes from whey. Verde Campo, which is owned by Coca-Cola, announced earlier this year that it was reformulating its entire product line to remove synthetic ingredients and preservatives.
  • South Africa’s Long Life Dairy, a subsidiary of Unique Dairy, introduced a range of shelf-stable dairy products, including yogurt snacks, milkshakes and custard pouches. The products have a 1-year shelf-life. The company is targeting consumers seeking affordable nutrition but who lack refrigeration. (USDEC South America office; USDEC China office; USDEC Southeast Asia office; Company reports; FoodBev.com, 6/24/19)

Tunisian dairy manufacturer Land’Or is building an $11-million cheese manufacturing plant in Morocco. Construction is slated to start in December, with commercial production expected in the first quarter of 2021. The facility will make canned cheese, melting cheese and fresh cheese, mostly for sale in Morocco. (USDEC Middle East office)

Nestlé is testing a blockchain platform that “will give anyone, anywhere access to independently verifiable sustainability and supply chain data,” the company said. The initial pilot will trace milk from farms and processors in New Zealand to Nestlé factories and warehouses in the Middle East. A second pilot will track palm oil sourced in the Americas. Nestlé has been very active testing blockchain technology in China and France earlier this year to provide greater sourcing transparency on its products. “We believe this is another important step towards full disclosure of our supply chains announced by Nestlé in February this year, raising the bar for transparency and responsible production globally,” said Benjamin Ware, the company’s global head of responsible sourcing. (Company reports)

California Dairies Inc. and Dairy Farmers of America created a marketing agency in common “to reduce supply chain costs and create additional value and stability for our customers” . . . China’s Mengniu Dairy announced a “strategic cooperation pact” with Uruguay’s Conaprole. Mengniu said the deal was part of the company’s strategy “to leverage international resources to better serve customers both in China and abroad.” No further details were released. A delegation from China Dairy Industry Association visited Uruguay earlier this year exploring opportunities to link Uruguayan suppliers with Chinese buyers . . . New Zealand’s Overseas Investment Office and High Court approved the sale of Westland Milk to China’s Yili Industrial Group, eliminating the last hurdles to the deal. (Company reports; Newshub, 7/16/19; China Daily, 7/12/19)

After reviewing its European operations, Ireland’s Ornua has decided to close its Whitchurch, UK, cheese plant. Production will be transferred to Ornua’s cheese ingredients facility in Nantwich, UK . . . Brazilian dairy Santa Clara Cooperative officially opened its new UHT milk plant in Casca, Rio Grande do Sul. The US$34-million facility has a capacity of 620 tons of milk per day but initial volumes are about half of that . . . Restaurant Brands International’s Tim Hortons division signed a licensing agreement with Thailand’s WeEat Co. to introduce the chain to Thailand . . . Alois Hofbauer, CEO of Saudi Arabia’s Almarai, resigned. Former Almarai CEO Georges Schorderet took his place . . . California-based Yogurtland signed a franchise deal to open 10 locations in Indonesia over the next three years, the first in October in Jakarta. (USDEC South America office; USDEC Southeast Asia office; USDEC Middle East office; Whitchurch Herald, 9/17/19; Food Business News, 6/6/19)

PepsiCo agreed to pay $1.7 billion to buy South African branded food and beverage maker Pioneer Foods Group. The company is looking to expand and accelerate growth in Sub-Saharan Africa . . . Nestlé sold two dairy and water facilities in Uzbekistan to France’s Lactalis. The deal includes a licensing agreement for Lactalis to continue manufacturing and marketing Nido and Nesquik dairy drinks in the region . . . Philippine foodservice operator Jollibee Foods Corp. purchased California-based coffeehouse Coffee Bean & Tea Leaf. Coffee Bean & Tea Leaf has more than 1,200 company-owned and franchised stores in 30 countries . . . Switzerland’s Emmi purchased Italian dessert maker Pasticceria Quadrifoglio srl(USDEC Southeast Asia office; The Tashkent Times, 7/24/19; Wall Street Journal, 7/19/19)

Australian ice cream maker Golden North will begin shipping products to Vietnam this month through a deal with Vietnamese retailer MM Mega Market. The company expects volume to reach one container per month to Vietnam within a year. It also sends four containers per year to China and is seeking to expand its export business . . . Restaurant Brands International signed a franchise agreement with China’s TFI TAB Food Investments to open 1,500 Popeyes Louisiana Kitchen restaurants in China over the next 10 years. KFC operates more than 6,000 stores in China . . . Michael Doyle, president and CEO of Foremost Farms USA, will retire at the end of the year. Foremost said it would begin a search for a replacement immediately . . . Kazuo Kawamura, president of Japan’s Meiji Holdings Co., joined the board of directors of Global Dairy Platform(Company reports; Dairy Herd Management, 7/24/19; Restaurant Business, 7/23/19; InDaily, 7/8/19)

august-3

To see how one company is successfully catering to the evolving palates of global consumers, read the Forbes article, “A look at the menu innovation driving KFC Global’s sales momentum.” From Chizza to egg tarts to the Mac ’n Cheese Zinger, the company’s cross-cultural product development team has found a winning formula. (Forbes, 7/22/19)

At least three cheese companies reportedly began building new plants in what authorities are calling a “cheese cluster” in Dmitrov, in Russia’s Moscow Oblast. EcoFarming, Kurshavalskaya and France’s Savencia Fromage & Dairy are the initial participants in the cluster, but the government is hoping the industrial park will eventually house seven cheesemakers. The cluster will produce 15,000-20,000 tons of cheese per year, according to local authorities. Separately, vertically-integrated Russian dairy firm EkoNiva Group, owned by Germany’s Ekosem-Agrar, plans to spend around $500 million to build two dairy farms and “one of the largest plants in Russia for the production of soft cheeses.” EkoNiva said it expects to complete the plant (located in Stupino, Moscow Oblast) in November 2021. (The Dairy News, 7/25/19, 7/18/19, 7/16/19)

Members of St. Albans Cooperative Creamery voted to approve a merger with Dairy Farmers of America (DFA). The merger went into effect yesterday. The co-op will keep its name as a wholly owned subsidiary of DFA. (VT Digger, 7/29/19)

Brazil’s agricultural cooperative Capal Cooperativa Agroindustrial is building a US$26-million milk powder dryer in Castro, Paraná, Brazil, and spending another US$11 million to increase milk storage capacity in Ponta Grossa, Paraná, and Itapetinga, Bahia. It expects to complete the powder facility by November . . . Nestlé is spending $100 million to expand capacity at three Indonesian plants in Karawang, West Java; Kejayan, East Java; and Panjang, Lampung. The projects include new production lines for Milo and Nescafé ready-to-drink beverages and Bear Brand sterilized milk . . . Müller UK completed a £50-million (about US$55-million) expansion project at its yogurt manufacturing plant in Telford, UK, doubling capacity to 500 million pots per year . . . California Dairies Inc. named current COO Brad Anderson to replace President and CEO Andrei Mikhalevsky when Mikhalevsky retires at the end of 2019 . . . Ralph Scozzafava stepped down as CEO of Dean Foods. Eric Beringause will replace him. (USDEC Southeast Asia office; Company reports; Milkpoint, 7/30/19; Bloomberg, 7/26/19)

New Zealand’s Oceania Dairy announced a series of projects to expand its Glenavy, South Island, manufacturing site. Oceania, which is owned by China’s Yili Industrial Group, is adding a second canning and blending line for infant formula, a third UHT line and an NZ$30-million lab (about US$18 million) for chemical, microbiological, functional and sensory testing. It expects to commission the new production lines by the end of this year and complete the lab facilities by July 2020. (Timaru Herald, 7/31/19)

After failing to find a buyer for its entire 18.8% stake in Chinese infant formula company Beingmate, New Zealand’s Fonterra Co-operative Group has decided to offload its investment 1% at a time via the Shenzhen Stock Exchange. (Rural News Group, 8/7/19)

Idaho Milk Products is planning a ribbon-cutting for its new $30-million expansion in Jerome, Idaho, in September. The project, which includes a new R&D pilot plant, increases the facility’s milk processing capacity by 1 million lbs. per day . . . Brazilian dairy processor Latícinios Bela Vista signed a licensing deal with Nestlé Brasil to make and market the Ninho and Molico brands of UHT milks for a period of 10 years. As part of the agreement, Bela Vista will take over management of UHT production lines at Nestlé plants in Carazinho, Tres Rios and Araraquara. (Company reports; Journal Opção, 8/7/19)

New Zealand’s Fonterra Co-operative Group issued an earnings warning for its 2019 fiscal year and scrapped its dividend, signaling that the co-op’s ongoing business review was far from complete. Fonterra said it would post a loss of NZ$590-$675 million (US$340-$390 million) after having to write down assets by about NZ$860 million (about US$496 million), including NZ$200 million from DPA Brazil, NZ$200 million from its Chinese dairy farming venture, NZ$200 million from its New Zealand consumer business and NZ$135 million from the sale and closure of its Venezuelan operations. It is the second straight year Fonterra will post a loss. Fonterra called the moves “tough but necessary,” noting they “reflect today’s realities.” It claimed that the company is otherwise doing well, with cashflow improving and debt declining. The co-op did not revise its farmgate price estimate (NZ$6.30-6.40/kgMS), but suspension of the dividend means 10-15 cents per share less than expected in total payout—another blow to already sagging farmer confidence. (Company reports; The Spinoff, 8/12/19; Newshub, 8/12/19)

The same 20 dairy companies from 2018 made Rabobank’s Global Dairy Top 20 in 2019, but more than half switched places. The most significant change this year saw Dairy Farmers of America drop two slots from No. 4 to No. 6, with Fonterra and FrieslandCampina moving up to 4 and 5, respectively. On the back of strong sales, China’s Yili Industrial Group passed up Canada’s Saputo to claim the No. 8 position, and that is before Yili’s recent purchase of New Zealand’s Westland Milk Products. Heading into 2020 we are likely to see further jockeying, including at the top of the list. Nestlé, Lactalis and Danone ranked 1-2-3, respectively. However, the gap between their positions has been narrowing in recent years, and Rabobank did not factor in a string of recent Lactalis acquisitions and Nestlé divestitures that could shake things up. In addition, “M&A activity in the dairy sector is here to stay,” Rabobank said. There were 85 deals in the first half of 2019 alone (32 of them cross-continental). That compares to 111 transactions in all of 2018 and 127 in 2017. To see the full list of the Top 20 companies and Rabobank’s analysis, click here.

China’s Yili is in talks to invest in the debt restructuring of China Huishan Dairy Holdings, which reportedly owes nearly $6 billion to creditors. Yili was one of a handful of Chinese dairy processors who submitted a restructuring plan to Huishan earlier this year. Huishan and creditor representatives selected Yili’s plan as the best. Nothing has been finalized, and the plan remains subject to creditor review and changes. (Caixin, 8/15/19)

China’s Mengniu Dairy signed a partnership agreement with Uruguayan dairy co-op Conaprole aimed at improving dairy trade between the two countries. Neither company offered details on the scope of the partnership . . . Synergy Flavors, a division of Ireland’s Carbery Group, opened its first site in Indonesia. The Jakarta location houses three application labs and will focus on developing cheese, butter and milk flavors to meet rising consumer demand in the region . . . Chobani opened its new $21-million, 71,000-sq.-ft. community innovation center at its Twin Falls, Idaho, factory. In addition to a new R&D lab, the site includes space to host town hall meetings, a fitness center, a cafeteria and a faith center for mediation, prayer and reflection . . . Yum Brands named David Gibbs as its new CEO effective Jan. 1, 2020. Current leader Greg Creed retires at year-end. (USDEC Southeast Asia office; Boeren Business, 8/14/19; FoodNavigator-Asia.com, 8/13/19; Capital Press, 8/13/19; CNBC, 8/12/19)

Bayer AG sold its animal health business to Elanco Animal Health for $5.3 billion in cash and $2.3 billion in Elanco stock. (Wall Street Journal, 8/20/19)

Brazilian dairy processor Latícinios Bela Vista is spending US$27 million on two new dairy facilities in Sulina and São Jorge D’Oeste in the state of Paraná. The Sulina site will manufacture cheese slices; news reports did not indicate what the São Jorge D’Oeste site would be producing . . . Fonterra-backed alternative-protein start-up Motif Ingredients unveiled a new brand identity Motif FoodWorks after securing an additional $28 million in funding from equity firm General Atlantic (with participation by CPT Capital) . . . Wisconsin-based Specialty Cheese Co. is spending $1.7 million to expand capacity at its Reeseville plant . . . Land O’Lakes rebranded its nonprofit arm as Land O’Lakes Venture37, a reference to the approximately 37% of the world’s land that is being used to grow crops and raise livestock. Formerly known as Land O’Lakes International Development, the enterprise works with farmers in nearly 80 countries on capacity building projects and other farm activities . . . Dairy Farmers of Ontario named former Parmalat executive Cheryl Smith as its new CEO. (Company reports; Dairy Markets, 8/20/19; FoodBev.com, 8/19/19; Jornal Opção, 8/15/19)

German dairy Bayernland is spending €55-million (about US$61-million) to expand its cheese operations in Bayreuth, Bavaria. The Bayreuth site currently makes around 23,000 tons of cheese per year, mostly mozzarella. The project, due for completion in mid-2021, will add 40,000 tons of semi-hard cheese production per year to the site, as well as transfer all production from Bayernland’s Kemnath plant. The Kemnath facility will close in 2021. (Onetz.de, 8/22/19)

Latvian dairy co-op Piena Cels and Estonian co-op E-Piim plan to merge their operations under a new name: E-Piim Societas Cooperativa Europaea. The partners plan to build a new €100-million (about US$111-million) milk processing facility in Paide, Estonia, with a projected opening date of 2021. Dutch dairy trader Interfood BV is reportedly one of the investors in the project. Combined, Piena Cels and E-Piim handle about one-quarter of Latvia and Estonia’s aggregate milk output. (eLiesma, 8/27/19)

Nestlé is closing its Tongala, Victoria, Australia, tinned milk plant due to reduced demand and aging equipment. The facility will shutter between late 2020 and mid 2021. (FoodBev.com, 8/28/19)

september-3

Danish dairy company Arla has announced that millions of its cheese products will be sold in more climate-friendly packaging. The change means that the sliceable and pre-sliced Riberhus, Klovborg and Arla ØKO cheeses will now be wrapped in packaging that consists of bio-based foil made from sugar cane and recycled plastic. The new packaging will reportedly reduce Arla’s CO2 emissions by about 12% annually. Earlier this year, Arla announced that 92 million of its milk cartons would be made from tree and plant material, ensuring a CO2 reduction of 22%. (CPH Post Online, 9/2/19)

Norwegian-based company Kezzler is working with Dutch dairy company FrieslandCampina to provide global traceability services for their infant formula brand, Friso … Swiss milk processor Emmi is strengthening its Latin American business due to the fact Surlat, the existing Emmi company in Chile, is merging with competitor Quillayes for form Quillayes Surlat … BCM Alliance Bhd is diversifying into the dairy business via the proposed acquisition of a controlling stake in Foodict, the main distributor of products in Malaysia for Chinese dairy company Yili … Nestlé Brazil and Laticinios Bela Vista have signed a deal for the production and distribution of UHT milk in Brazil. The aim of the partnership is to accelerate the expansion of the UHT market in Brazil and boost the position of Nestlé’s Ninho and Molico brands. (Dairy Reporter, 9/3/19; Food Processing Technology, 9/2/19; New Straits Times, 9/3/19; Food Bev Media, 8/29/19)

As of Jan. 1, 2020, Germany’s DMK Group will assume full ownership of DV Nutrition, based in Hoogeveen, Netherlands. DMK unit DOC Kaas and Britain’s Volac formed DV Nutrition in 2004 to manufacture whey- and lactose-based ingredients. They are ending the joint venture because they “wish to develop their businesses in different directions,” DMK said. (Company reports)

After concluding a strategic review of its business, Dean Foods has decided to continue operating independently rather than sell the business or pursue other strategic alternatives . . . Nestlé is investing US$248 million over the next three years in two factories in São Paulo state to increase capacity for child nutrition products and chocolate. (USDEC South America office; Bloomberg, 6/6/19; Dairy Markets, 8/27/19)

China’s Mengniu Dairy is paying A$1.5 billion (about US$1 billion) to buy Australian infant formula company Bellamy’s Organic. Like fellow Chinese dairy giant Yili Group, Mengniu is seeking to expand beyond its home market.  Bellamy’s has been trying to secure registration from China’s State Administration for Market Regulation (SAMR) to sell its flagship organic infant formula brand in China for more than a year. Its share price had been suffering as time dragged on without Chinese approval. The sale to Mengniu at a 59% premium to Bellamy’s closing stock price will please shareholders but still does not guarantee a swifter green light from SAMR. Bellamy’s, which owns a canning facility in Braeside, Victoria, exports to China, Malaysia, Singapore and Vietnam and plans to expand to Indonesia and the Philippines. The deal still requires shareholder approval and clearance from Australia’s Foreign Investment Review Board. The potential sale to foreign ownership is already generating questions in Australia about whether the deal serves the public interest. (Australian Financial Review, 9/16/19; Sydney Morning Herald, 9/16/19; Financial Times, 9/15/19)

Fonterra Co-operative Group will report its annual results and provide details on its new business strategy on Sept. 26. The earnings announcement was expected on Sept. 12, but due to “significant accounting adjustments,” the co-op said it required more time to finalize its financial statement. Criticism of the co-op is building and it could get worse if Fonterra is forced to write down additional assets. It wrote off NZ$860 million in assets in August when it broke the news that the recently-ended year would tally a loss of up to NZ$675 million. ANZ Bank now suggest that Fonterra might need to take additional write-downs of NZ$300 million-NZ$700 million on its Beingmate investment, its Chilean milk processing operations and its Australian business. S&P Global characterized the situation by saying that Fonterra had “lost its way” over the past seven years and governance factors had contributed to a “widespread misallocation of capital.” The co-op did not provide details about the new business strategy but did say it would require organizational changes (and possibly job cuts) and it is “about being more focused, prioritizing New Zealand milk and being closer to our customers.” (Company reports; Reuters, 9/17/19, 9/11/19; New Zealand Herald, 9/11/19)

Meiji China Investments, the wholly owned subsidiary of Japan’s Meiji Co., is forming a new Chinese unit to manufacture and market milk and yogurt. Meiji Dairies (Tianjin) expects to start production in the second half of fiscal 2023. The company did not provide details of its facility plans but said it would require a capital investment of 620 million yuan (about US$87 million). Meiji called China its “most important overseas market.” (just-food.com, 9/18/19)

Malaysian medical and laundry equipment distributor BCM Alliance is getting into the dairy distribution business. The company is buying a majority share in Foodict Maker, the main distributor of Yili Group products in Malaysia. Foodict says Malaysian dairy demand is growing quickly and sustainably, and it expects Yili’s market share to rise in the country . . . Hindustan Unilever is reportedly the frontrunner to acquire Indian ice cream maker Dinshaw’s Dairy Foods, based in Nagpur. (USDEC Southeast Asia office; VC Circle, 9/16/19; New Straits Times, 9/3/19)

Under a recently signed Memorandum of Understanding (MOU), Fonterra Australia will supply dairy ingredients to Indonesia’s PT Sanghiang Perkasa, part of Kalbe Farma’s nutritionals division. Kalbe said it hopes to build a long-term strategic partnership with Fonterra through the MOU . . . Ireland’s Aurivo completed a €6-million (about US$6.6-million) project to double capacity at its Killygordon, County Donegal, fresh and fluid product plant. (USDEC Southeast Asia office; Agriland, 9/16/19; Bisnis.com, 8/29/19)

Fonterra Co-operative Group unveiled a new back-to-basics business strategy aimed at reversing two straight losing years and reviving farmer faith in the struggling business. The strategy, which Chairman John Monaghan cited for its “simplicity,” focuses on two business areas—ingredients and foodservice—prioritizes New Zealand milk (it will begin “rationalizing” off-shore milk pools) and reorganizes sales and marketing by three geographical regions (rather than “ingredients” and “consumer and foodservice”). The three geographical regions are Asia Pacific (APAC), Greater China (GC) and Africa, Middle East, Europe, North Asia, Americas (AMENA). Judith Swales will lead the APAC unit and Kelvin Wickham will head up AMENA. The co-op has already begun the recruitment process for CEO of the GC group. Robert Spurway, who was COO of global operations, is leaving the company to pursue other opportunities. For ingredients, Fonterra said it would focus on meeting nutrition needs across people’s life stages, with four main product categories: pediatrics, medical and aging, sports and active, and core dairy. For foodservice, it plans to build on its success in China and develop new markets, particularly in Southeast Asia. Fonterra also said it would consolidate its North Island specialty cheese operations, closing its Te Roto plant in Paraparaumu and transferring operations to its Eltham facility. The co-op said it was losing money operating two specialty cheese plants. The move will consolidate costs and make the business sustainable, Fonterra said. Just prior to the results announcement, Fonterra reported that it had agreed to sell its 50% stake in DFE Pharma to a fund managed by CVC Capital Partners, a global private equity and investment advisory firm. Dutch dairy giant FrieslandCampina was Fonterra’s joint venture partner on DFE Pharma. Fonterra’s Kapuni site on the North Island will continue to manufacture lactose for DFE Pharma via a long-term supply contract. Coupled with the proceeds from the sale of Tip Top ice cream, the sale will reduce Fonterra’s debt by more than NZ$1 million (about US$630,000), exceeding the co-op’s goal of NZ$800,000 (about US$504,000). (Company reports)

Nutritional powder is coming off the line at Synlait Milk’s new Pokeno, North Island, manufacturing plant despite a pending Supreme Court case that could derail the entire operation. A neighboring landowner cried foul earlier this year, claiming the plant’s land is not zoned for manufacturing. The NZ$260-million (about US$164-million) facility, which Synlait says was built as a direct response to consumer demand, can produce 45,000 tons of product per year, including infant-grade SMP, WMP and infant formula base powders. New Zealand’s Supreme Court expects to begin hearing arguments on Oct. 21. (Stuff.co.nz, 9/24/19)

New Zealand’s Keytone Dairy has made two shipments of packaged WMP and SMP worth NZ$1 million (about US$630,000) to Sam’s Club over the past month as part of a supply contract inked this past spring. The company, which sells the powder under the Sam’s Club brand, recently added about 5,000 tons per year of capacity to its blending and canning plant in Christchurch. Earlier this year, Keytone also introduced a formula created specifically for diabetics as well as a “junior” formula for children aged three to seven—both products aimed at Asian markets. (Company reports; Small Caps, 9/23/19)

The Australian Competition and Consumer Commission (ACCC) gave the greenlight to Saputo’s acquisition of Lion Dairy and Drinks’ specialty cheese business. The ACCC, however, cautioned against any further consolidation in the Tasmanian dairy sector . . . South Africa’s Competition Tribunal approved the sale of the nation’s largest dairy company, Clover, to Milco SA, subject to a deal that would limit Clover job cuts to 277 positions (rather than the 516 originally planned). (Farm Online, 9/26/19; BusinessDay, 9/25/19)

Idaho Milk Products held the ribbon cutting on its new $30-million plant expansion in Jerome. The project increased milk handling capacity to 4.4 million lbs. per day (1 million lbs. greater than before the project) . . . China’s Beingmate Baby & Child Food is proposing changing its name simply to Beingmate. Fonterra, which owns nearly a 19% stake in the company, is against the name change, as it might imply a retreat from the company’s core infant formula business . . . Nestlé opened its upgraded and expanded MILO manufacturing plant in Chembong, Malaysia. The site is the “world’s largest” MILO facility, Nestlé says . . . China’s Yili Group officially launched its Ambrosial Greek-style yogurt line in Southeast Asia with a press event in Singapore last week. Yili is marketing the line through a tie-in with the Alfa Romeo F1 racing team. Yili is playing up the Greek roots of the product with a Greek-style font on the packaging and a culture that it says was developed by the Agricultural University of Athens. (USDEC Southeast Asia office; Company reports; Stuff.co.nz, 9/23/19; MagicValley.com, 9/21/19)

october-3

As part of a broader sustainability transformation, France’s Bel Group plans to develop a line of hybrid snacks that combine dairy raw materials with vegetables or legumes. The company did not release details on the line, but said it is an effort to offer consumers “inclusive and responsible brands.” Bel also plans to eliminate all artificial flavors and colors by 2021 and achieve carbon-neutral status and 100% recyclable and/or biodegradable packaging by 2025. The plans align with a new Bel corporate identity: “For All. For Good.” (FoodBev.com, 9/30/19)

United Dairymen of Arizona (UDA) and Dutch dairy giant FrieslandCampina formed a partnership to manufacture and market lactoferrin. The joint venture will produce 10 tons of lactoferrin per year, but FrieslandCampina noted that both companies see it as “an opportunity for further collaboration.” The partnership combines UDA milk with FrieslandCampina processing, product and market knowledge. FrieslandCampina expects to announce further lactoferrin capacity expansion plans soon. (Company reports)

Brazil’s Laticínios Porto Alegre opened a new R$100-million (about US$24-million) addition to its facility in Antonio Carlos, Minas Gerais. The plant expands its product portfolio and will manufacture yogurt, cream cheese, cottage cheese and minas fresco cheese. The company plans to invest another R$60 million (about US$14 million) to build a new plant in Patos de Minas, Minas Gerais, to make mozzarella, parmesan and whey powder. It expects to complete that project in 2023. (USDEC South America office; Estado de Minas, 9/26/19)

Ireland’s Glanbia plans to expand its R&D facility at Ballyragget, County Kilkenny, adding a pilot plant, labs, storage and additional facilities and equipment. The company expects the project to “allow our newly expanded R&D team to deliver more innovative value-added products for the global marketplace”. . . Saudi Arabian dairy processor Almarai obtained a $100-million loan from the European Bank for Reconstruction and Development. About $90 million is earmarked to expand dairy and juice production at Almarai’s Beyti business in Egypt with the other $10 million going to its Teeba juice operation in Jordan . . . Nestlé is spending $2 million on two new filling lines for its condensed milk factory in Pontecesures, Spain. (Agriland, 9/30/19; EBRB, 9/26/19; DairyReporter.com, 9/26/19)

Dutch dairy giant FrieslandCampina signed an agreement with Royal A-ware that the company says will expand its international position in mozzarella cheese as well as its product portfolio. Under the terms of the deal, FrieslandCampina will provide raw milk to A-ware. A-ware will process the milk and make the cheese at its new production facility in Heerenveen, Netherlands. The mozzarella plant was originally built as part of A-ware’s partnership with New Zealand’s Fonterra Co-operative Group. The mozzarella agreement was recently terminated as part of Fonterra’s strategic reorientation, but Fonterra will continue to process whey and cream from the cheese facility at its neighboring Heerenveen site. (Company reports)

Fonterra’s NZ$240-million foodservice mozzarella facility at Clandeboye, South Island, is only running about 25% capacity, according to recent New Zealand press reports. The plant opened a year ago to high expectations that it would provide a fast-growing source of high-value exports to the co-op, with Fonterra cheese from Clandeboye topping half a billion pizzas per year. The plant utilizes technology that supposedly slashes mozzarella production time down to hours rather than months. Fonterra says it overestimated initial demand, although the company maintains that “significant quick-service restaurant demand” will increase Clandeboye’s throughput over the next six months. However, the continued strong growth of the pizza sector in target markets before and after Clandeboye’s opening suggests the under-utilization might be due to more than slow demand. (USDEC staff; Timaru Herald, 10/9/19; The Bullvine, 10/4/19)

Canada’s Agropur Cooperative named Émile Cordeau as its new CEO effective Oct. 15. Cordeau will replace Robert Coallier, who is retiring at the end of the year . . . Agropur also announced the closure of its Lachute, Quebec, ice cream and frozen novelties plant in August 2020. It will transfer production to existing facilities in Truro, Nova Scotia, and Edmonton, Alberta . . . Fonterra named Fraser Whineray to fill the new role of chief operating officer starting in early 2020. Whineray is currently chief executive of Kiwi energy company Mercury NZ, but started his career as a graduate of the New Zealand Dairy Board’s technical training program and served at Puhoi Valley Cheese. (Company reports)

Thai seafood producer Thai Union Group has joined onto an EU-backed project to develop plant-based alternative dairy, meat and seafood products including cheese and infant formula. The School of Food and Nutritional Sciences at University College Cork is coordinating the project, called “Smart Protein.” It so far has 32 backers including Glanbia Ireland, Danone’s Nutricia Research and TEAGASC, Ireland’s Agriculture and Food Development Authority. Most are based in Europe; Thai Union Group is the first collaborator in Asia besides Israeli seed company Equinom. Smart Nutrition expects to go to market with a first wave of products—including plant-based “cheese,” infant formula and other dairy alternatives, baked goods and “meat” products—in or around 2025. (USDEC Southeast Asia office; European Commission)

Futura Food UK, a division of Danish dairy manufacturer Nordex Food, purchased Welsh cheesemaker GRH Food. GRH shut down and went into receivership this past summer. Future said it hopes to restart operations “as soon as possible.” (Insider Media, 10/16/19)

Nestlé is teaming up with the Swiss Canton of Vaud, the Swiss Federal Institute of Technology and the Swiss Hospitality and Management School to use “cutting-edge science and technology” to address major food and nutrition challenges, including waste, innovation and healthy, sustainable diets. The initiative will launch in 2020 as the Swiss Food & Nutrition Valley . . . Qatari dairy company Baladna expects to raise up to $392 million through an IPO that runs from Oct. 27-Nov. 7 . . . UK cheesemaker Wensleydale Creamery is spending £18 million (about US$23 million) to modernize and expand its manufacturing site in Hawes, North Yorkshire. (Company reports; Reuters, 10/17/19; Insider Media, 10/17/19)

Denmark’s Arla Foods inaugurated its state-of-the-art Bahrain cheese production facility in Manama to support growing cheese demand in the Middle East/North Africa region. Arla gained ownership of the plant as part of its purchase of Mondelez International’s Middle Eastern processed cheese business earlier this year and began relocating Danish capacity to Bahrain in the ensuing months. The company plans to invest approximately €50 million (about US$55 million) in the site over the next two to three years to increase capacity to 100,000 tons by 2025 and make the facility its key strategic manufacturing hub in the region. Arla expects to market cheese made in Manama to the Middle East, West Africa, Southeast Asia and the United States under brands including PuckArlaDanoKraft and private label. “The Middle East and North Africa is a priority market for us and the inauguration of this production site in the Kingdom of Bahrain consolidates our commitment to the region,” said Arla Foods CEO Peder Tuborgh, speaking at the inauguration event. (Company reports)

Vietnam’s TH Milk says it gained approval to export sterilized milk and modified milk products to China . . . Oman’s brand new, vertically integrated Mazoon Dairy launched its first product—fluid milk—into the nation’s retail network. The company expects to follow with a full range of cheese, ice cream, laban and juice in the coming months . . . Welsh fluid milk processor Tomlinsons Dairies went into administration on Oct. 15, citing mounting operating losses over the past few years . . . Wisconsin-based goat cheese producers LaClare Family Creamery completed a $10-million expansion that boosts its product portfolio and packaging capabilities. (BBC News 10/22/19; Times of Oman, 10/20/19; Vietnam News Agency, 10/19/19; Hoard’s Dairyman, 10/18/19)

November-3

New Zealand’s Synlait Milk paid NZ$112 million (about US$71 million) for South Island-based cheese marketer Dairyworks. Dairyworks sells cheese and butter under the brand names AlpineRolling Meadows and Dairyworks, with a large domestic market share and a growing presence in Australia. Synlait said the deal complements its recent acquisition of New Zealand cheese manufacturer Talbot Forest Cheese. It will operate Dairyworks as a stand-alone business under the Synlait umbrella. Separately, Synlait received a green light to appeal a court decision that rejected its right to build its already constructed nutritional powder plant in Pokeno, North Island. The plant has been running for the last two months, since Synlait completed the facility and began commercial operations despite the ongoing court case. Synlait said it was working with all parties for a positive outcome, but planned to move ahead with the appeal before New Zealand’s Supreme Court. (BusinessDesk, 10/29/19; New Zealand Herald, 10/25/19)

Farmer suppliers for First Milk’s Campbeltown Creamery in Scotland have launched a bid to buy cheese plant. First Milk announced plans earlier this year to close the facility . . . Upstate Niagara Cooperative purchased Byrne Dairy’s fluid milk operations, including a plant in Syracuse, N.Y., and several distribution centers throughout New York State. Byrne will maintain ownership of facilities in DeWitt and Cortland, N.Y., as well as its retail shops . . . Canada’s Saputo completed its acquisition of the cheese business of Australia’s Lion Dairy & Drinks(Company reports; CNY Central, 10/29/19; STV, 10/25/19)

Australia’s Bega Cheese warned that increased competition for milk supplies due to the nation’s prolonged drought would lower 2020 earnings by up to 17%. Australian milk production hit a 20-year low in 2018/19 and is down 6% through the first quarter of the 2019/20 year . . . Fonterra Co-operative Group plans to relocate 160 staff in its domestic Fonterra Brands division from its Downtown Auckland headquarters to its manufacturing plant in the Auckland suburb of Takanini. The company said it wants to bring the commercial and operational teams for its domestic products business closer together to improve results . . . Chinese Infant formula China Feihe is looking to raise about $1.1 billion through an IPO on the Hong Kong Stock Exchange. The company, which shelved previous plans for an IPO in 2017, reportedly began taking investor orders and expects to begin trading in mid-November. (Reuters, 10/28/19; Bloomberg, 10/27/19; Newshub, 10/26/19)

Arla Foods is spending €80 million (about US$89 million) to more than double mozzarella production at its Branderup Dairy site in Denmark. The project includes a new silo, milk storage area and production line capable of making 53,000 tons of mozzarella per year. It will raise the plant’s total mozzarella output to 91,000 tons per year. Arla plans to begin construction in early 2020 and have the line up and running by the summer of 2021. (Company news)

Ireland’s Ornua officially opened a new €30-million (about US$33-million) mozzarella and pizza cheese manufacturing plant in Avila, Spain. The facility has a capacity of 35,000 tons per year but Ornua plans to eventually double that to 70,000 tons. The operation, built on the site of an Ornua plant destroyed by a fire in 2017, also features an R&D center to develop “the next generation of pizza cheese and cheese ingredients,” the company says. The plant’s opening coincides with the creation of a new division, Ornua Ingredients Europe, that ties together Ornua’s Spanish and British ingredients businesses. The new division features a combined turnover of more than €300 million, four facilities and 600 employees. (Irish Times, 11/5/19; Agriland, 11/5/19)

Australian infant formula business Wattle Health formed a joint venture with Chinese dairy company Nouriz Fine Food. The venture will market products sourced from Corio Bay Dairy Group—itself a joint venture between Wattle, Organic Dairy Farmers of Australia and powder blending and packaging company Niche Dairy. Corio Bay is building an A$55-million (about US$38-million) milk powder plant in Geelong, Victoria, adjacent to Organic Dairy Farmers’ existing facility. The Corio plant, when completed in the first half of 2020, will handle around 200 tons of raw milk per day. Wattle and Niche Dairy have priority rights to buy the powder. (Australian Associated Press, 11/4/19)

Associated Milk Producers Inc. (AMPI) is discontinuing production at its Arlington, Iowa, milk powder plant and Rochester, Minn., cheese facility. The co-op pointed to declining dairy farm numbers and milk output in the region. Milk previously processed at the facilities will be rerouted to AMPI plants in the surrounding area. AMPI leadership is exploring options for the facilities’ future. (Company reports)

Bubs Australia signed a deal with Chinese e-commerce giant Alibaba to sell Bubs’ CapriLac and Deloraine adult goat milk powders in China. Bubs called the country a “huge and growing market for premium adult goat-based dairy products.” It forecasts Year 1 shipments at $10 million (about US$7 million) . . . The board of Foremost Farms USA named Greg Schlafer president and CEO effective Dec. 2. Schlafer has 25 years experience in the food industry. most recently as vice president of Food Group Sales & Marketing at J.R. Simplot Co. He replaces retiring Foremost chief Michael Doyle . . . An effort by a group of farmers to buy First Milk’s Campbeltown Creamery failed. First Milk has been seeking a buyer for the plant for more than year. It now plans to proceed with closing the facility. (Australian Associated Press, 11/6/19;

Product innovation engines keep churning at overseas dairy processors. Below is a cross-section of some recent interesting rollouts and expansions.

  • Brazil’s Betânia unveiled an ambient drinking yogurt under the Yogi & Leve The product will facilitate expansion efforts into northeastern Brazil without requiring investment in a chilled distribution chain, the company said.
  • China’s Junlebao Dairy launched an A2 infant formula using milk made from Chinese herds. The product is currently available only for pre-order on e-commerce platforms, but Junlebao has obtained regulatory approvals to sell it online and offline.
  • Saudi Arabia’s Saudia Dairy & Foodstuff Co. (Sadafco) introduced a new milk with plant sterols. The company launched the milk in October in conjunction with World Heart Day; marketing is focused squarely on the cholesterol-lowering properties of plant sterols.
  • WOAH! Protein says it’s L-leucine-fortified ice cream is gaining a following in Singapore. The line contains nearly 12g of protein and 4g of L-leucine and is certified by Singapore’s Health Promotion Board as a “healthier” product choice.
  • Abbott Laboratories extended its Similac Gold with 2’-FL (2’-fucosyllactose) to Singapore and Malaysia. 2’-FL is a natural oligosaccharide found in human breast milk that, combined with antioxidants and nucleotides, help strengthen a child’s immune system, the company says. The product targets children age 2 and up.
  • Wyeth Nutrition introduced its S-26 Gold Progress UHT growing-up milks to Thailand. The company is marketing the liquid formulas as beneficial to children’s brain development. (USDEC South America office; USDEC Southeast Asia office; Company reports; The Motley Fool, 11/6/19; FoodNavigator-Asia.com, 10/9/19; Saudi Gazette, 10/5/19)

A number of media outlets are mischaracterizing Dean Foods bankruptcy filing this week as a sign of the demise of dairy at the hands of dairy alternatives. Dean filed for Chapter 11 on Tuesday, and said it was in advanced discussions with Dairy Farmers of America regarding a potential sale of “substantially all assets.” Dairy organizations are pointing out dairy facts many media reports are missing, including:

  • Per capita consumption of dairy products continues to grow domestically and globally.
  • U,S. cheese consumption is at its highest point ever and butter consumption is at a 50-year high.
  • Even fluid milk is showing some promising signs, with whole milk sales rising by nearly $1 billion over the last three years, and U.S. processors investing in growing product subsectors that meet the demands of today’s consumers, like lactose-free milk and chocolate milk (driven by its positioning as a post-work-out recovery beverage).
  • Dairy is a strong and diverse food sector that will continue to advance innovation—from farm to table—to achieve long-term growth and provide unmatched, sustainable nutrition.

In media interviews, U.S. Dairy Export Council President and CEO Tom Vilsack has been debunking the myth of dairy’s decline with facts that put milk in a different light. For example, he pointed out in an interview on Hoosier Ag Today captured here that 94% of U.S. households have milk in their refrigerators. Focusing on USDEC’s mission, Vilsack said “we’ve been able to produce more than we’ve domestically consumed, which is why export markets became important.” Dean secured a commitment of roughly $850 million in debtor-in-possession financing from existing lenders which it will use to temporarily fund continued regular operations. (USDEC staff; Company reports; Wall Street Journal, 11/12/19)

Yemen-based conglomerate Thabet Group plans to make Malaysia its dairy hub to export to Southeast Asia and the Middle East. Thabet, which owns Yemen Dairy & Juice, plans to operate in Malaysia through its subsidiary Pan Asian Dairies. Product will be manufactured at a plant in Seremban, the company’s first dairy facility outside of Yemen, which is set to open in December. Thabet expects to sell about 60% of production domestically and ship the other 40% to export destinations. (USDEC Southeast Asia office; New Straits Times, 10/29/19)

Canada’s Saputo told Bloomberg News that the company is considering three to four potential acquisitions, including buying a plant-based beverage company . . . Media reports suggest Finland’s Valio is in talks to buy Russian dairy manufacturer Galaktika. Both companies declined to confirm the reports . . . Philippine holding company Udenna Corp. acquired all 51 Wendy’s restaurants in the Philippines through its subsidiary Eight-8-Ate Holdings. Udenna is now the chain’s master franchisee there. (USDEC Southeast Asia office; The Dairy News, 11/11/19: Bloomberg News, 11/8/19)

Goat milk company Bubs Australia signed a two-year deal with Vietnamese mother/child retailer BiboMart. Bubs’ products should hit Vietnamese shelves in December. It was Bubs’ second Asian distribution deal announced this month, following last week’s agreement with Chinese e-commerce giant Alibaba . . . Australian goat milk formula marketer Nuchev is planning an IPO to raise A$40 million (about US$27 million). The company markets its products in Australia and Asia under the Oli6 brand and is looking to expand in China . . . Calling it a “huge market opportunity,” Thailand’s Central Restaurants Group (CRG) is branching into soft-serve ice cream with a concept and brand called Soft Air. Soft-serve is a $100-million market in Thailand dominated by Minor Group’s Dairy Queen franchise. CRG also operates the Mister Donut and Ootoya chains in Thailand. (USDEC Southeast Asia office; Australian Associated Press, 11/11/19; The Motley Fool, 10/30/19)

Australia’s Foreign Investment Review Board (FIRB) unanimously approved Mengniu Dairy’s takeover of infant formula maker Bellamy’s Organic as long as Mengniu meets three FIRB requirements. Those requirements are: Bellamy’s must keep its headquarters in Australia for at least 10 years; the majority of its board must be Australian resident citizens; and the new owners must invest a minimum of A$12 million (about US$8 million) on improving infant milk formula processing facilitates in the Australian state of Victoria. The takeover proposal and FIRB’s green light are generating political controversy in Australia, with some legislators expressing concerns about putting too many Australian assets in foreign hands. The buyout still requires court approval before being finalized. Australia has blocked a number of Chinese investments in recent years, citing national interests. (Sydney Morning Herald, 11/15/19; Reuters, 11/14/19)

Shanghai-based Newbaze Industrial Group officially opened a new €20-million (about US$22-million) dry blending and packaging plant for nutritional dairy powders in Carrickmacross, Ireland. The plant, a 93,000-sq.-ft. converted electronics facility, is Newbaze’s first venture outside China. Newbaze is targeting international markets with the powders from the plant, including China, Africa, Southeast Asia and the Middle East. (The Anglo Celt, 11/18/19; Agriland, 11/18/19)

Agropur is undertaking an organizational review in an effort to increase the profitability of its Canadian operations. The first fallout from that review came last week when the company released 125 employees. According to a story in La Presse, the co-op is also exploring the possibility of spinning off its U.S. division or selling its fine cheese division, although Agropur did not confirm the press reports. (Company reports; La Presse, 11/14/19)

FrieslandCampina sold its 82% stake in CSK Food Enrichment to DSM. All three companies are based in the Netherlands. CSK produces dairy cultures, rennet and cheese coatings . . . Ireland’s Kerry Co-op Society raised around €90 million (US$100 million) by selling 800,000 shares in Kerry Group. Kerry Group is said to be the lead bidder to acquire DuPont’s nutrition and biosciences division. (Company reports; Irish Times, 11/20/19, 11/8/19)

California-based frozen-yogurt chain Yogurtland opened the first two locations in Indonesia through a development deal with local business partners. The agreement calls for more than 15 Indonesian Yogurtland locations over the next three years. Indonesia is the eighth country outside the U.S. where Yogurtland operates. (USDEC Southeast Asia office; Company reports)

december-3

New Zealand’s Fonterra Co-operative Group increased its forecast farmgate milk price for 2019/20 to NZ$7.00-7.60/kg MS (from the earlier forecast of NZ$6.55-$7.55/kg MS). The new payout midpoint of NS$7.30/kg MS would be the co-op’s fourth highest milk price on record. Fonterra Chairman John Monaghan said the higher price reflected “a global dairy market that is tipped slightly in favor of demand.” Fonterra said it is making good progress with its new business strategy aimed at reversing two straight years of losses. It reported improvements across an array of indicators, including reduced operating expenditures, increased earnings and improved cash flow. Chinese foodservice sales showed particularly vibrant growth, building on a strong finish to the 2018/19 year. First quarter 2019/20 foodservice sales to China rose 43%, as the co-op entered 24 additional Chinese cities (bringing the total number of Chinese cities in which it sells to 327). (Company reports)

Fresh off its acquisition of Bellamy’s Organic, China’s Mengniu Dairy agreed to pay A$600 million (about US$410 million) for Australia’s Lion Dairy & Drinks. Lion owner, Japan’s Kirin Holdings, has been trying sell the milk and plant-based beverage maker for more than a year. Lion operates 11 manufacturing plants in Australia, marketing a number of dairy brands including Dairy FarmersPura and Big M. Lion said the deal will help drive Mengniu’s growth in Australia and boost Lion’s ambitions in China and Southeast Asia. Australian regulators need to approve the deal before it’s finalized. (USDEC Southeast Asia office; Sydney Morning Herald, 11/25/19; news.com.au, 11/26/19)

Indonesian processed cheesemaker Mulia Boga Raya is spending $4 million to expand its Bekasi manufacturing plant. The plant’s current capacity is 29,500 tons per year. Mulia Boya Roga says it owns 20% of Indonesia’s processed cheese market with its Prochiz brand. It currently imports raw materials from New Zealand. (USDEC Southeast Asia office)

China’s Gansu Huaan Biotechnology met with three Uruguayan dairy processors and the nation’s National Milk Institute of Milk on an exploratory mission to evaluate potential partnerships to manufacture casein in Uruguay. Representatives from the Chinese dairy sector have demonstrated strong interest in Uruguayan investment this year with multiple missions to the nation . . . Canada’s Gay Lea Foods Co-operative acquired Ontario-based specialty cheesemaker Thornloe Cheese from fellow co-op EastGen(USDEC South America office; Northern Ontario Business, 12/2/19)

Glanbia Ireland and Dutch cheese and dairy manufacturer Royal A-ware got the green light to build a €140-million (about US$155-million) cheese plant in Belview, County Kilkenny. The plant, slated for completion in 2022, will produce edam, gouda and other varieties, handling about 500,000 metric tons of raw milk per year . . . APS BioGroup, a unit of Colorado-based biotech company PanTheryx, signed a three-year, multimillion deal to supply the bovine colostrum ingredient Colos IgG 24h to Vietnamese dairy company VitaDairy. VitaDairy plans to use the colostrum ingredient in its ColosBaby line of infant formula, growing-up milks and formulas for pregnant mothers . . . Ireland’s Dairygold Food Ingredients launched a new brand identity for its B2B dairy and nutritional ingredients portfolio. The new brand is called Glenor (Irish for “Golden Valleys”) and is being rolled out across all product lines. (Company reports; Kilkenny Now, 11/23/19)

UK-based Froneri International purchased Nestlé USA’s ice cream business for $4 billion. Froneri, a joint venture created in 2016 by the merger of Nestlé’s European ice cream business and PAI Partners’ R&R Ice Cream, posted turnover of around $2.8 billion in 2018. Nestlé USA ice cream turnover for the same period was $1.9 billion. Nestlé CEO Mark Schneider called Froneri its “global strategic partner in ice cream,” and said the deal marks “a decisive step” toward the company’s international ice cream goals. Nestlé will continue to manage its remaining ice cream businesses in Canada, Latin America and Asia as part of its current market structure. (Company reports)

Castelli America closed its Ashville, Wis., cheese plant due to “challenges related to production and sales,” according to local economic development groups. The plant’s general manager said that the company recently lost a couple key customers and the parent company was “not in a position to fund us.” The operation is owned by Italy’s Nuovo Castelli Group, which purchased the former Empire Specialty Cheese facility in 2016 and put more than $8 million into upgrades and improvements. (The Observer, 12/10/19; WRFA, 12/10/19)

Malaysian dairy and beverage manufacturer and distributor Etika acquired Singapore-based vending machine operator Advend Systems. The deal makes Etika the largest vending machine operator in Malaysia and Singapore with more than 10,000 units. (USDEC Southeast Asia office)

Ireland’s Carbery Group secured a €35-million loan (about US$39-million) from the European Investment Bank to expand its Ballineen, County Cork, manufacturing plant. The full cost of the project, which will add mozzarella capacity for export markets, is €78 million (about US$86 million) . . . Jayne Hrdlicka, CEO of New Zealand’s a2 Milk Co. abruptly resigned this week citing work-life balance issues. Former CEO Geoffrey Babidge was named interim chief while the company searches for a long-term replacement. (Agriland, 12/10/19; Reuters, 12/8/19)

Fonterra Co-operative Group paid NZ$29 million (about US$19 million) for an additional 13.6% stake in Chilean dairy processor Prolesur, lifting its total share in the company to 99.9%. Prolesur supplies most of its product to Fonterra-owned Soprole, and Fonterra said the deal will allow it to better integrate the businesses and generate operating efficiencies. The New Zealand dairy giant also created a new role on its management team—CEO Greater China—and named Tee-Han Chow to the position on an interim basis. He is currently president of NZMP for Greater China and Southeast Asia. (Company reports)

Investment firm JAB Holdings is merging its two coffee units—Peet’s Coffee and Jacobs Douwe Egberts—in a single unit under the name JDE Peet’s, with stores in 140 countries and sales of €7 billion (about US$7.8 billion) . . . Ireland’s Kerry Group lost the race to acquire DuPont’s nutrition business. Dupont instead sold the operation to International Flavors & Fragrances (IFF). The combined company, which will retain the IFF name, boasts combined revenues of $11 billion. (Reuters, 12/17/19; Wall Street Journal, 12/15/19)

Irish Ag Minister Michael Creed officially opened the €10-million (about US$11-million) expansion to the Moorepark Technology Limited pilot plant and R&D center in Fermoy, County Cork. A joint investment by Teagasc and nine Irish dairy companies, Creed said the expansion will help dairy and food companies adapt existing products and develop new ones to meet rapidly evolving consumer demands . . . Mauricio Leyva, CEO of Mexico’s Grupo Lala, will step down at the end of the year. Lala board member Arquimedes Celis Ordaz will assume the role on an interim basis until the board locates a long-term replacement. Leyva is reportedly taking a position with the aforementioned JAB Holdings(Agriland, 12/13/19; Reuters, 12/12/19)


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

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