Lactalis Sets Sights on Bolstering Market Dominance in Brazil
Source: The DairyNews
Lactalis, the world's largest dairy company, is poised to fortify its position in Brazil, targeting a market share of 15% by 2028, up from its 11% share last year. Immediate efforts are directed towards integrating the operations of dpa Brazil, a venture formed by Fonterra and Nestlé.
The completion of this acquisition, valued at R$700 million, occurred in December 2023 following approval from the Administrative Council for Economic Defense (Cade).
The company's strategic agenda includes a substantial increase in processed milk volume from 2.5 billion to 3.5 billion liters annually by 2028. Additionally, Lactalis aims to elevate its dairy sales market share from 13% in 2023 to 20% within five years.
"Brazil presents considerable growth potential for our group. We're committing investments that surpass the country's contribution to our turnover because it remains a priority market," stated Lactalis CEO Emmanuel Besnier. Besnier recently toured the facilities of Itambé, a subsidiary within the group, accompanied by French journalists.
Over the past decade, Lactalis has invested approximately 1.3 billion in acquisitions and 300 million in enhancing milk productivity, quality, and product innovation in Brazil. The company boasts ownership of 16 brands in the region, including Elegê, Itambé, Cotochés, Parmalat, and Batavo, with sales reaching 2.5 billion last year.
Lactalis Brazil CEO Patrick Sauvageot disclosed that the Brazilian operation currently contributes almost 10% to the group's global revenue, positioning the country as the fifth-largest market for Lactalis, trailing behind France, the United States, Canada, and Italy. Brazil's sales surpassed Italy's in the first quarter of this year.
In 2024, Lactalis aims to seamlessly integrate the DPA operation into its portfolio, leveraging synergies while maintaining the subsidiary's autonomy. With this acquisition, Lactalis gains ownership of brands like Chandelle, Chamyto, and Chambinho, alongside the right to utilize the Nestlé brand in refrigerated products. DPA operates two factories, eight distribution centers, and employs 1,300 individuals, generating net sales of 361 million in 2023.
To secure sustainable market share growth in Brazil, Lactalis focuses on developing value-added products, including premium cheeses, yogurts, and other dairy offerings. Sauvageot emphasized the challenges posed by increased milk powder imports from Argentina and Uruguay, necessitating government intervention to enhance domestic dairy competitiveness.
Lactalis, alongside other industry stakeholders, has proposed to the federal government an increase in PIS and Cofins credit returns from 50% to 100%, contingent on a corresponding rise in investment allocation for productivity enhancement. This initiative aims to bolster investments in the sector, with potential yearly expenditures projected to surge from R$110 million to R$440 million, benefiting thousands of producers across Brazil.
The company's strategic agenda includes a substantial increase in processed milk volume from 2.5 billion to 3.5 billion liters annually by 2028. Additionally, Lactalis aims to elevate its dairy sales market share from 13% in 2023 to 20% within five years.
"Brazil presents considerable growth potential for our group. We're committing investments that surpass the country's contribution to our turnover because it remains a priority market," stated Lactalis CEO Emmanuel Besnier. Besnier recently toured the facilities of Itambé, a subsidiary within the group, accompanied by French journalists.
Over the past decade, Lactalis has invested approximately 1.3 billion in acquisitions and 300 million in enhancing milk productivity, quality, and product innovation in Brazil. The company boasts ownership of 16 brands in the region, including Elegê, Itambé, Cotochés, Parmalat, and Batavo, with sales reaching 2.5 billion last year.
Lactalis Brazil CEO Patrick Sauvageot disclosed that the Brazilian operation currently contributes almost 10% to the group's global revenue, positioning the country as the fifth-largest market for Lactalis, trailing behind France, the United States, Canada, and Italy. Brazil's sales surpassed Italy's in the first quarter of this year.
In 2024, Lactalis aims to seamlessly integrate the DPA operation into its portfolio, leveraging synergies while maintaining the subsidiary's autonomy. With this acquisition, Lactalis gains ownership of brands like Chandelle, Chamyto, and Chambinho, alongside the right to utilize the Nestlé brand in refrigerated products. DPA operates two factories, eight distribution centers, and employs 1,300 individuals, generating net sales of 361 million in 2023.
To secure sustainable market share growth in Brazil, Lactalis focuses on developing value-added products, including premium cheeses, yogurts, and other dairy offerings. Sauvageot emphasized the challenges posed by increased milk powder imports from Argentina and Uruguay, necessitating government intervention to enhance domestic dairy competitiveness.
Lactalis, alongside other industry stakeholders, has proposed to the federal government an increase in PIS and Cofins credit returns from 50% to 100%, contingent on a corresponding rise in investment allocation for productivity enhancement. This initiative aims to bolster investments in the sector, with potential yearly expenditures projected to surge from R$110 million to R$440 million, benefiting thousands of producers across Brazil.
