Dairy giant Lactalis crosses bar of €21 billion in sales

02-06-2021 | |
Photo: Pixabay
Photo: Pixabay

The French dairy giant Lactalis reached a turnover of over €21 billion last year.

Sales were 5.9% higher than in 2019 due to the increased demand for dairy products because of the Covid-19 pandemic but also thanks to the continuous expansion of the company by acquisitions in many countries worldwide.

Unlike Groupe Bel or Danone, Lactalis will strictly stick to dairy. ‘’Drinking milk is still a lot better for your health than all those drinks from plants,’’ its chairman and owner, the French billionaire Emmanuel Besnier, explains.

In 2017, the French juggernaut made an important move in the US with the purchase of yoghurt producer Stonyfield from the French colleague Danone for US$ 875 million. Also in North-America, 2 years later, Lactalis acquired the Canadian natural cheese business of food company Kraft Heinz for US$ 1.24 billion. In the same year, the French giant became the largest dairy player in Brazil thanks to the acquisition of the co-operative Itambé, adding another 4,000 milk suppliers producing 1,9 billion litres annually. Earlier this year, Lactalis announced the purchase of the iconic Dutch cheese brand Royal Bel Leerdammer and its subsidiaries in Germany, Italy, and Ukraine from the French Groupe Bel in a deal valued at some €700 million. That deal offers Lactalis an opening into the large Dutch cheese market and production in Holland via 3 manufacturing sites. Because of Leerdammer’s market position in a number of countries, the deal has to be approved by the relevant competition authorities first before becoming final.

I do think milk is much healthier than all those plant drinks.”

Facts and figures

Being a family-owned company, Lactalis is very secretive about its facts and figures. On its website, you’ll search in vain for annual reports. The production and other numbers mentioned earlier are from 2019. Only a few years ago, the company started publishing its annual turnover while this year for the first time it also released its profits. A breakdown in categories or geographies is not something Lactalis is willing to make public. Nevertheless, since 2019, the publicity shy owner/CEO Emmanuel Besnier sometimes appears in the French media. He and his company consider that necessary since in 2018, Lactalis was hit by a large salmonella scandal, leading to the recall of over 12 million of boxes of baby formula from all over the world. In France, the company is also often criticised by its milk suppliers, even leading tot regular blockades of milk factories by farmers complaining about the milkprice they received.

Photo: Pixabay

Photo: Pixabay

In May, Besnier gave a modest press conference at the dairy factory in Vitré, which, with a capacity of 350 million litres a year, is one of the largest production sites. The CEO announced that his company last year made a turnover of €21,1 billion. The profit came to €427 million, approximately ⅓ more than in 2019. Besnier also emphasised that Lactalis’ farmers nowadays are among to the best paid in the industry in France. Last year, the company paid an average milk price of €370 per 1,000 litres, just one eurocent per 1,000 litres less than in 2019. ‘’We were rather pessimistic in spring 2020 because of the Corona pandemic, but at the end of the day it was a better year than we expected. Therefore, we could pay one of the best milk prices in the country. We also have high expectations for the current year and hope to be able to pay our farmers a significantly higher milk price over 2021.’’

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At the meeting in Vitré, Besnier also emphasised once again that Lactalis will remain a pure dairy company. In France, Groupe Bel but also Danone more and more go in the direction of plant-based products. Danone, for example, owns American WhiteWave, which produces the almond milk Alpro, while Groupe Bel is introducing vegetarian version of its cheese products like BabyBel and also recently bought the producer of fruit desserts and juices Materne. But not so for Lactalis, Monsieur Besnier stresses. “We are a dairy company and we will remain a dairy company. That’s our business, that are our roots. I do think milk is much healthier than all those plant drinks.’’

Company profile
Lactalis’s story started in the 1930’s when Benier’s grandfather André made his first 33 camembert cheeses from 17 litres of milk in Laval, a town between Rennes and Le Mans which still houses the company’s headquarters. Under Andre’s visionary son Michel, the then called Besnier Groupe started on a growth path in the 1960’s. In 1999, Besnier changed its name to Lactalis, a name that can be pronounced more easily on all five continents.

These days, the dairy giant sells its products in almost every country in the world, has 266 production sites in 56 countries and over 85,000 employees of which half work in Europe. It’s best-known brand is Président cheese and butter but it also is the owner of products like Galbani, Parmalat as well as an infinite number of more local dairy brands such as Skånemejerier in Sweden or Seriously in the UK. Of the turnover, 59% comes from Europe, 22% from the Americas, 13% from Asia/Oceania including China and 6% from Africa. By category, just over one-third is from cheese, a quarter from liquid milk, 12% from yoghurt and chilled dairy, 10% from butter and cream and 12% from dairy ingredients and powders.

Lactalis started selling products in the US, Canada and other countries in the 1970’s. However, that international expansion accelerated strongly in the last twenty years. Since 2000, Lactalis had made numerous acquisitions in many countries worldwide including India, Serbia and Malaysia. In 2006 it bought the flagship Italian brand Galbani, followed a few years later by a number of dairy producers in Spain. One of the major acquisitions was the large Italian dairy producer Parmalat which Lactalis bought in 2011 after the Milan-based company became insolvent following a major fraud case. With Parmalat, drinking milk became the second most important market for Lactalis after cheese.

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Ruud Peys International journalist