The first quarter of the year in the global milk market: volatility, stable consumption, and ongoing challenges
Source: The DairyNews
The Dairynews.today sums up the first quarter of the year in the global milk market together with the leaders of the dairy industry. We have compiled all the most interesting data and comments provided by milk producers and processors from different countries into one material. Details can be found in our long read.
Danone: Better than Expected
Antoine de Saint-Affrique, CEO, expressed satisfaction with the company's high performance in the first quarter, noting the company's sustainable growth trajectory.
The company's net sales grew by 4.1% at comparable prices, with physical sales volumes also increasing.
Despite ongoing market challenges, Danone continued its strategic transformation, strengthening its core positions in categories and strategically expanding its assortment and geographic presence. This included portfolio adjustments such as the sale of Horizon Organic and Wallaby in the USA, as well as Michel & Augustin.
In the first quarter of 2024, consolidated sales volume reached 6.8 billion euros, an increase of 4.1% compared to the same period last year. This growth was driven by a 1.2% increase in sales volume and a 2.9% increase in prices.
Europe: Product sales increased by 2.8%, supported by a 2.8% price increase and a slight increase in sales volume by 0.1%. Significant results were noted for brands such as Actimel, Activia, YoPro, and Alpro.
North America: Product sales increased by 2.5%. High performance was noted in the production of ready-to-drink coffee and high-protein yogurts.
China, North Asia, and Oceania: Significant sales growth of 8.9% compared to the same period last year, driven by a 6.9% increase in volume and a 2.0% increase in prices.
Latin America: Sales grew by 4.1%, mainly due to a 6.8% price increase, although sales volume/assortment decreased by 2.6%.
Rest of the world: Product sales increased by 6.0%, with steady growth in sales of specialized food products.
CEO Commentary:
"We have successfully started the year, demonstrating another quarter of quality growth and consistent execution of our Danone renewal plans. In conditions that remain challenging, we continued to achieve significant success in implementing our transformation program, strengthening the fundamental metrics of our category, purposefully promoting our best mixes and geographic regions, and executing portfolio rotation through the successful completion of the sales of Horizon Organic and Wallaby in the USA and Michel & Augustin.
We are confident that 2024 will be another year in which we can realize our value creation model."
Unilever - Ice Cream Growth Expected
One of the leading global consumer goods suppliers increased its revenue by 1.4% in the first quarter.
According to the company's announcement, its turnover in January-March amounted to 15 billion euros. Analysts, whose forecasts are presented on the company's website, expected revenue to decline to 14.661 billion euros.
Unilever recorded sales growth in all product categories. In the ice cream segment, which the company plans to separate, growth was 2.7%.
The size of the quarterly interim dividends remained unchanged at 0.4268 euros per share.
Nestlé: Growth in China, Europe, Africa
In the first quarter of 2024, Nestlé demonstrated modest organic growth of 1.4%, primarily driven by strong performance in Europe and emerging markets. However, this growth was partially offset by challenges in North America.
The total reported sales volume reached 22.1 billion Swiss francs, reflecting a decrease of 5.9% compared to the same period last year. This decrease was attributed to currency fluctuations and net asset sales.
The "Purina PetCare" segment was a key driver of organic growth, along with positive performances in coffee, confectionery, water, and infant nutrition. However, challenges were observed in segments such as Nestlé Health Science and dairy products.
CEO Opinion:
Mark Schneider, CEO of Nestlé, expressed confidence in the company's ability to address challenges and capitalize on growth opportunities. He emphasized strategic efforts in innovation, particularly in the frozen food segment in North America, and reaffirmed Nestlé's commitment to shareholder value.
With good prospects for the remainder of 2024, Nestlé aims to ensure sustainable growth and value creation for its stakeholders.
North America Zone
Organic growth was -2.5%. Sales in North America decreased by 7.7% to 5.8 billion Swiss francs. Infant nutrition sales declined as significant growth in sales of Nido growing up milk was more than offset by a decrease in sales of Gerber baby food.
Europe Zone
Organic growth was 4.4%. Sales volume in the European zone decreased by 5.0% to 4.6 billion Swiss francs. Growth was evident in all geographic regions and categories. The zone saw an increase in market share for pet care and infant nutrition.
Asia, Oceania, and Africa (AOA) Zone
Organic growth was 3.6%. Sales volume in the AOA zone decreased by 9.4% to 4.2 billion Swiss francs. Key growth drivers included Central and West Africa, India, and the Philippines. Affordable products, particularly Maggi, Lactogen, and Nescafé, contributed to growth in these markets. The region saw an increase in market share for confectionery, coffee, and pet care products, with a decrease in the share of dairy products.
Latin America Region
Organic growth was 3.1%. Asset sales led to a 0.1% decrease in sales. Brazil was the growth leader. Portfolio optimization in this region resulted in increased market share for pet care, infant nutrition, and portioned coffee, with a decrease in the share of dairy products.
Greater China Zone
Organic growth was 3.7%. Sales in the Greater China zone decreased by 5.9% to 1.2 billion Swiss francs. The region saw an increase in market share for soluble coffee, confectionery, and pet care products, with a decrease in the share of Wyeth infant nutrition products. Positive growth was observed in infant nutrition, with high demand for NAN offsetting a decline in Wyeth product sales.
Panda Dairy: Strategic Growth
Chinese Panda Dairy published financial results for the first quarter of 2024, demonstrating significant improvements.
Revenue amounted to 185.0 million yuan, a 14% decrease compared to the first quarter of 2023. However, net profit reached 26.6 million yuan, a 39% increase compared to the same period last year. Profitability increased to 14%, significantly higher than 8.9% in the first quarter of 2023, mainly due to cost reduction.
Company Comment:
In the coming years, Panda Dairy expects promising growth, with an average annual revenue growth rate forecasted at 21% over the next two years. This forecast significantly exceeds the expected growth of China's food industry at 13% over the same period.
Investor sentiment remains positive: Panda Dairy shares increased by 3.7%.
Bright Dairy: Slowdown in Growth, But Stability
The revenue of Chinese dairy company Bright Dairy in the first quarter of 2024 was 172 million yuan, a decrease of 8.07%.
Meanwhile, Bright Dairy's annual report for 2023 shows that the company's net profit was 967 million yuan, which is 168.19% higher than in 2022. The company plans to pay dividends of 2.2 yuan, including taxes, for every 10 shares.
At the time of publication, Bright Dairy's market capitalization was 12.8 billion yuan.
Savencia: Anticipating Uncertainty
Savencia Fromage & Dairy Group reported a revenue growth of 1.6% in the first quarter of 2024 compared to the same period in 2023. Although organic growth remained neutral, the positive effect fr om cheese production was offset by a decrease in sales of other dairy products.
Cheese sales showed confident organic growth of 2.5%. This growth was driven by positive volume dynamics, especially in Europe, as well as price increases amid inflation and sustained high milk prices in key markets.
Company Comment:
Prospects for 2024 continue to be characterized by unstable and uncertain conditions:
The company published an interim management report for the first quarter of 2024, which reported a 5.5% decrease in revenue compared to the same period last year, ending March 30.
Despite a 1.5% increase in sales volume, a significant price decrease of 6.9%, primarily in the dairy segment, led to a decline in revenue.
Revenue from Glanbia Performance Nutrition (GPN) decreased by approximately 1.9%. Although sales volume increased by 1.4%, a price decrease of 3.3% affected overall revenue. Notably, the Optimum Nutrition segment within GPN demonstrated confident growth in production volumes, supported by increased brand investment, strengthening its leading position in the protein powder market.
Regarding regional performance, GPN revenue in North and South America decreased by 5.1%, while international revenue increased by 4.7% due to significant sales volume growth, especially in key markets, wh ere Optimum Nutrition attracted increased consumer attention.
Kerry Group Reports 9.9% Revenue Decline in Q1 2024 Amid Global Market Conditions
Kerry Group's revenue witnessed a notable decrease of 9.9% in the first quarter (Q1) of 2024, as outlined in the group's interim management statement for the period. The company attributed this decline to subdued consumer demand amidst prevalent inflationary pressures across various global regions.
The revenue breakdown comprised a 1.9% volume growth offset by a 5.3% pricing deflation, coupled with disposals (net of acquisitions) and unfavorable currency conversion, resulting in the overall decline.
Despite the revenue setback, the group reported a positive development in its earnings before interest, taxes, depreciation, and amortization (EBITDA), which increased by 140 basis points (1.4%). This growth was attributed to cost efficiencies, portfolio advancements, and the impact of pricing strategies, according to Kerry Group.
Oatly: the company began to develop new segments
Oatly Group AB (Nasdaq: OTLY), a leading global oat milk company, announced strong financial results for the first quarter of 2024.
Jean-Cristophe Flatin, CEO of Oatly, expressed satisfaction with the company's performance, noting a successful start to the year. Flatin highlighted several positive indicators, including the stability of the Oatly brand, favorable sales volume dynamics, and economic efficiency. He noted progress in implementing strategic priorities, emphasizing Oatly's commitment to sustainable growth.
Revenue for the first quarter reached $199.2 million, an increase of 1.8% compared to the same period last year. High performance was demonstrated in Europe and North America.
Adjusted EBITDA loss decreased to $13.2 million, a significant improvement of $36.7 million.
In the first quarter of 2024, Oatly's revenue growth was primarily in the retail segment. Additionally, the company reduced expenses on research and development, as well as commercial, general, and administrative expenses, contributing to increased overall operational efficiency. Furthermore, the company began to develop new segments, including Europe and international markets, North America, and Greater China.
Read more about the latest news from market participants on Dairynews.today and stay informed about the most important events!
Antoine de Saint-Affrique, CEO, expressed satisfaction with the company's high performance in the first quarter, noting the company's sustainable growth trajectory.
The company's net sales grew by 4.1% at comparable prices, with physical sales volumes also increasing.
Despite ongoing market challenges, Danone continued its strategic transformation, strengthening its core positions in categories and strategically expanding its assortment and geographic presence. This included portfolio adjustments such as the sale of Horizon Organic and Wallaby in the USA, as well as Michel & Augustin.
In the first quarter of 2024, consolidated sales volume reached 6.8 billion euros, an increase of 4.1% compared to the same period last year. This growth was driven by a 1.2% increase in sales volume and a 2.9% increase in prices.
Europe: Product sales increased by 2.8%, supported by a 2.8% price increase and a slight increase in sales volume by 0.1%. Significant results were noted for brands such as Actimel, Activia, YoPro, and Alpro.
North America: Product sales increased by 2.5%. High performance was noted in the production of ready-to-drink coffee and high-protein yogurts.
China, North Asia, and Oceania: Significant sales growth of 8.9% compared to the same period last year, driven by a 6.9% increase in volume and a 2.0% increase in prices.
Latin America: Sales grew by 4.1%, mainly due to a 6.8% price increase, although sales volume/assortment decreased by 2.6%.
Rest of the world: Product sales increased by 6.0%, with steady growth in sales of specialized food products.
CEO Commentary:
"We have successfully started the year, demonstrating another quarter of quality growth and consistent execution of our Danone renewal plans. In conditions that remain challenging, we continued to achieve significant success in implementing our transformation program, strengthening the fundamental metrics of our category, purposefully promoting our best mixes and geographic regions, and executing portfolio rotation through the successful completion of the sales of Horizon Organic and Wallaby in the USA and Michel & Augustin.
We are confident that 2024 will be another year in which we can realize our value creation model."
Unilever - Ice Cream Growth Expected
One of the leading global consumer goods suppliers increased its revenue by 1.4% in the first quarter.
According to the company's announcement, its turnover in January-March amounted to 15 billion euros. Analysts, whose forecasts are presented on the company's website, expected revenue to decline to 14.661 billion euros.
Unilever recorded sales growth in all product categories. In the ice cream segment, which the company plans to separate, growth was 2.7%.
The size of the quarterly interim dividends remained unchanged at 0.4268 euros per share.
Nestlé: Growth in China, Europe, Africa
In the first quarter of 2024, Nestlé demonstrated modest organic growth of 1.4%, primarily driven by strong performance in Europe and emerging markets. However, this growth was partially offset by challenges in North America.
The total reported sales volume reached 22.1 billion Swiss francs, reflecting a decrease of 5.9% compared to the same period last year. This decrease was attributed to currency fluctuations and net asset sales.
The "Purina PetCare" segment was a key driver of organic growth, along with positive performances in coffee, confectionery, water, and infant nutrition. However, challenges were observed in segments such as Nestlé Health Science and dairy products.
CEO Opinion:
Mark Schneider, CEO of Nestlé, expressed confidence in the company's ability to address challenges and capitalize on growth opportunities. He emphasized strategic efforts in innovation, particularly in the frozen food segment in North America, and reaffirmed Nestlé's commitment to shareholder value.
With good prospects for the remainder of 2024, Nestlé aims to ensure sustainable growth and value creation for its stakeholders.
North America Zone
Organic growth was -2.5%. Sales in North America decreased by 7.7% to 5.8 billion Swiss francs. Infant nutrition sales declined as significant growth in sales of Nido growing up milk was more than offset by a decrease in sales of Gerber baby food.
Europe Zone
Organic growth was 4.4%. Sales volume in the European zone decreased by 5.0% to 4.6 billion Swiss francs. Growth was evident in all geographic regions and categories. The zone saw an increase in market share for pet care and infant nutrition.
Asia, Oceania, and Africa (AOA) Zone
Organic growth was 3.6%. Sales volume in the AOA zone decreased by 9.4% to 4.2 billion Swiss francs. Key growth drivers included Central and West Africa, India, and the Philippines. Affordable products, particularly Maggi, Lactogen, and Nescafé, contributed to growth in these markets. The region saw an increase in market share for confectionery, coffee, and pet care products, with a decrease in the share of dairy products.
Latin America Region
Organic growth was 3.1%. Asset sales led to a 0.1% decrease in sales. Brazil was the growth leader. Portfolio optimization in this region resulted in increased market share for pet care, infant nutrition, and portioned coffee, with a decrease in the share of dairy products.
Greater China Zone
Organic growth was 3.7%. Sales in the Greater China zone decreased by 5.9% to 1.2 billion Swiss francs. The region saw an increase in market share for soluble coffee, confectionery, and pet care products, with a decrease in the share of Wyeth infant nutrition products. Positive growth was observed in infant nutrition, with high demand for NAN offsetting a decline in Wyeth product sales.
Panda Dairy: Strategic Growth
Chinese Panda Dairy published financial results for the first quarter of 2024, demonstrating significant improvements.
Revenue amounted to 185.0 million yuan, a 14% decrease compared to the first quarter of 2023. However, net profit reached 26.6 million yuan, a 39% increase compared to the same period last year. Profitability increased to 14%, significantly higher than 8.9% in the first quarter of 2023, mainly due to cost reduction.
Company Comment:
In the coming years, Panda Dairy expects promising growth, with an average annual revenue growth rate forecasted at 21% over the next two years. This forecast significantly exceeds the expected growth of China's food industry at 13% over the same period.
Investor sentiment remains positive: Panda Dairy shares increased by 3.7%.
Bright Dairy: Slowdown in Growth, But Stability
The revenue of Chinese dairy company Bright Dairy in the first quarter of 2024 was 172 million yuan, a decrease of 8.07%.
Meanwhile, Bright Dairy's annual report for 2023 shows that the company's net profit was 967 million yuan, which is 168.19% higher than in 2022. The company plans to pay dividends of 2.2 yuan, including taxes, for every 10 shares.
At the time of publication, Bright Dairy's market capitalization was 12.8 billion yuan.
Savencia: Anticipating Uncertainty
Savencia Fromage & Dairy Group reported a revenue growth of 1.6% in the first quarter of 2024 compared to the same period in 2023. Although organic growth remained neutral, the positive effect fr om cheese production was offset by a decrease in sales of other dairy products.
Cheese sales showed confident organic growth of 2.5%. This growth was driven by positive volume dynamics, especially in Europe, as well as price increases amid inflation and sustained high milk prices in key markets.
Company Comment:
Prospects for 2024 continue to be characterized by unstable and uncertain conditions:
- Continuing evolution of consumption patterns in the face of limited purchasing power,
- Geopolitical and economic tensions leading to a slowdown in global economic growth.
- In this context, Savencia Fromage & Dairy Group continues its efforts in adaptation and investment, developing synergy among its various businesses and strengthening the trust it has gained from stakeholders: milk producers, distributors, and consumers.
The company published an interim management report for the first quarter of 2024, which reported a 5.5% decrease in revenue compared to the same period last year, ending March 30.
Despite a 1.5% increase in sales volume, a significant price decrease of 6.9%, primarily in the dairy segment, led to a decline in revenue.
Revenue from Glanbia Performance Nutrition (GPN) decreased by approximately 1.9%. Although sales volume increased by 1.4%, a price decrease of 3.3% affected overall revenue. Notably, the Optimum Nutrition segment within GPN demonstrated confident growth in production volumes, supported by increased brand investment, strengthening its leading position in the protein powder market.
Regarding regional performance, GPN revenue in North and South America decreased by 5.1%, while international revenue increased by 4.7% due to significant sales volume growth, especially in key markets, wh ere Optimum Nutrition attracted increased consumer attention.
Kerry Group Reports 9.9% Revenue Decline in Q1 2024 Amid Global Market Conditions
Kerry Group's revenue witnessed a notable decrease of 9.9% in the first quarter (Q1) of 2024, as outlined in the group's interim management statement for the period. The company attributed this decline to subdued consumer demand amidst prevalent inflationary pressures across various global regions.
The revenue breakdown comprised a 1.9% volume growth offset by a 5.3% pricing deflation, coupled with disposals (net of acquisitions) and unfavorable currency conversion, resulting in the overall decline.
Despite the revenue setback, the group reported a positive development in its earnings before interest, taxes, depreciation, and amortization (EBITDA), which increased by 140 basis points (1.4%). This growth was attributed to cost efficiencies, portfolio advancements, and the impact of pricing strategies, according to Kerry Group.
Oatly: the company began to develop new segments
Oatly Group AB (Nasdaq: OTLY), a leading global oat milk company, announced strong financial results for the first quarter of 2024.
Jean-Cristophe Flatin, CEO of Oatly, expressed satisfaction with the company's performance, noting a successful start to the year. Flatin highlighted several positive indicators, including the stability of the Oatly brand, favorable sales volume dynamics, and economic efficiency. He noted progress in implementing strategic priorities, emphasizing Oatly's commitment to sustainable growth.
Revenue for the first quarter reached $199.2 million, an increase of 1.8% compared to the same period last year. High performance was demonstrated in Europe and North America.
Adjusted EBITDA loss decreased to $13.2 million, a significant improvement of $36.7 million.
In the first quarter of 2024, Oatly's revenue growth was primarily in the retail segment. Additionally, the company reduced expenses on research and development, as well as commercial, general, and administrative expenses, contributing to increased overall operational efficiency. Furthermore, the company began to develop new segments, including Europe and international markets, North America, and Greater China.
Read more about the latest news from market participants on Dairynews.today and stay informed about the most important events!
23.09.2024
Carbon emissions in global milk production - the elephant in the room
I have been thinking to make this post yes/ no. I decided for yes and like to ask everyone to not "shoot the messenger". The chart shows an analysis of IFCN Dairy Research Network from the 2024 supporter conference in Poland.
