Fonterra Climbs to No. 6 in Global Dairy Rankings Amid Strong Financial Performance
Source: DairyNews.today
Fonterra has made a significant leap in Rabobank’s annual Global Dairy Top 20 rankings, moving up three places from ninth to sixth, following a robust financial performance in the 2023 financial year.
The cooperative’s ascent in the rankings highlights its strong revenue growth, which increased by 7.1% on a New Zealand dollar basis compared to the previous year.
The Rabobank report, which assesses the financial results of the world’s leading dairy companies, praised Fonterra’s performance, attributing part of the revenue growth to higher commodity prices in the latter half of 2022. However, the report also cautioned that these results might be somewhat skewed when compared to other global dairy companies with different financial year-end dates.
Despite the positive ranking, the report sounded a note of caution regarding Fonterra’s future position. The cooperative’s recent strategic shift towards focusing on its core business could result in a lower ranking in the coming years. This strategy may involve divesting some or all of its consumer businesses, including Fonterra Oceania and Fonterra Sri Lanka, which could impact up to 15% of the company’s milk solid utilization and 19% of its earnings. These potential divestments could represent a sale value of over $2 billion.
The report suggests that such a step change could be part of a broader trend within the global dairy industry, where companies are re-evaluating their priorities and shedding less profitable or non-core assets. This realignment could be driven by various factors, including sustainability goals and the need to meet industry-driven commitments, leading to a re-examination of assets and strategic priorities.
In the global rankings, French dairy giant Lactalis retained its No. 1 position, while Nestlé and Dairy Farmers of America swapped places from last year, ranking second and third, respectively. Danone and Yili held their positions at fourth and fifth, just ahead of Fonterra. Arla Foods of Denmark-Sweden dropped from sixth to seventh, followed by FrieslandCampina from the Netherlands, which fell to eighth. Chinese companies Mengniu and Saputo rounded out the top ten, with Mengniu dropping to ninth and Saputo remaining in the tenth spot.
As Fonterra continues to navigate its strategic shift, its future rankings in the global dairy landscape will be closely watched. The cooperative’s ability to maintain its position will likely depend on how effectively it can balance its core focus with the evolving demands of the global dairy market.
The Rabobank report, which assesses the financial results of the world’s leading dairy companies, praised Fonterra’s performance, attributing part of the revenue growth to higher commodity prices in the latter half of 2022. However, the report also cautioned that these results might be somewhat skewed when compared to other global dairy companies with different financial year-end dates.
Despite the positive ranking, the report sounded a note of caution regarding Fonterra’s future position. The cooperative’s recent strategic shift towards focusing on its core business could result in a lower ranking in the coming years. This strategy may involve divesting some or all of its consumer businesses, including Fonterra Oceania and Fonterra Sri Lanka, which could impact up to 15% of the company’s milk solid utilization and 19% of its earnings. These potential divestments could represent a sale value of over $2 billion.
The report suggests that such a step change could be part of a broader trend within the global dairy industry, where companies are re-evaluating their priorities and shedding less profitable or non-core assets. This realignment could be driven by various factors, including sustainability goals and the need to meet industry-driven commitments, leading to a re-examination of assets and strategic priorities.
In the global rankings, French dairy giant Lactalis retained its No. 1 position, while Nestlé and Dairy Farmers of America swapped places from last year, ranking second and third, respectively. Danone and Yili held their positions at fourth and fifth, just ahead of Fonterra. Arla Foods of Denmark-Sweden dropped from sixth to seventh, followed by FrieslandCampina from the Netherlands, which fell to eighth. Chinese companies Mengniu and Saputo rounded out the top ten, with Mengniu dropping to ninth and Saputo remaining in the tenth spot.
As Fonterra continues to navigate its strategic shift, its future rankings in the global dairy landscape will be closely watched. The cooperative’s ability to maintain its position will likely depend on how effectively it can balance its core focus with the evolving demands of the global dairy market.
23.09.2024
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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.
