Lactalis Faces Profitability Challenges Amid Inflationary Pressure in 2023
Source: The DairyNews
French dairy giant Lactalis reported a 4.3% increase in sales to €29.5 billion ($31.51 billion) in 2023, but grappled with low net profit margins due to inflation impacting consumer purchasing power.
Privately owned by the Besnier family, Lactalis disclosed a net profit of €428 million for the year, compared to €384 million in 2022. However, the net profit margin remained modest at 1.45% of sales in 2023, slightly up from 1.36% in 2022 but significantly lower than the 2.0% recorded in 2021.
Commenting on the challenging economic landscape, Lactalis Chairman Emannuel Besnier acknowledged the impact of inflation and unfavorable international prices on profitability. Despite these hurdles, he commended the company's teams for steering a course of sustainable growth amidst adversity.
Lactalis attributed changes in consumer behavior to a decline in sales volumes, with a notable preference for distributor brands over national brands, particularly in Europe.
The company emphasized its commitment to innovation and sustainability, revealing investments exceeding €920 million. These funds were allocated toward developing new products, modernizing dairies and cheese factories in France and North America, and reducing environmental footprint.
With its primary markets in France, the United States, and Canada, Lactalis navigates the complexities of the global dairy industry while striving for growth and sustainability in an evolving market landscape.
Commenting on the challenging economic landscape, Lactalis Chairman Emannuel Besnier acknowledged the impact of inflation and unfavorable international prices on profitability. Despite these hurdles, he commended the company's teams for steering a course of sustainable growth amidst adversity.
Lactalis attributed changes in consumer behavior to a decline in sales volumes, with a notable preference for distributor brands over national brands, particularly in Europe.
The company emphasized its commitment to innovation and sustainability, revealing investments exceeding €920 million. These funds were allocated toward developing new products, modernizing dairies and cheese factories in France and North America, and reducing environmental footprint.
With its primary markets in France, the United States, and Canada, Lactalis navigates the complexities of the global dairy industry while striving for growth and sustainability in an evolving market landscape.
