Benoît Rouyer has been involved in the dairy sector for 20 years. Since 2009 he has been working at CNIEL (The French Dairy Inter-branch Organisation), first as chief economist, then from 2014 onwards as director of economic and regional affairs. Previously he was in charge of the dairy products for UBIFRANCE (French Trade Foreign Office).
The world economy has undergone dramatic changes over the last few years. Some of the most remarkable developments are improved living standards in emerging countries, and the substantial increase in middle-class household numbers. These households can now afford more than grain-based foods – such as the costlier fruits, vegetables, meat and dairy products.
This economic progress in emerging markets has had a major impact on the global dairy sector- especially in terms of investment. It has fostered both the internationalisation of Western dairy groups and the appearance of local dairy leaders in emerging economies.
The internationalisation of Western dairy groups:
Lactalis- which had no international presence in the eighties- now has plants in 43 countries across all continents. Nestlé’s reach is wider still, with dairy and ice cream factories in 78 countries. Incidentally, the current crisis has not slowed this investment trend. Danone has massively consolidated its industrial presence in Africa over the last few months. Early 2016, FrieslandCampina acquired a majority stake in Pakistan’s Engro Foods, while Lactalis bought the dairy business of India’s Anik Industries.
The appearance of local dairy leaders:
China’s Yili and Mengniu and India’s Amul have experienced tremendous growth over the last few years, and are now among the world’s top 30 dairy leaders. Some local dairy leaders in emerging countries have also built regional dairy plant networks – such as Peru’s Gloria in Latin America and Costa Rica’s Dos Pinos in Central America. Some have invested in Western countries: among those investing in the United States are Mexico’s Lala, Colombia’s Alpina, India’s Amul, China’s Yili and Vietnam’s Vinamilk. Others still have exported their integrated dairy complex expertise to other countries- Vietnamese TH Group’s dealings with Russia are an example.