Dairy products and alternatives remains a competitive industry where the top 10 companies face fierce competition from local players leaving the market quite fragmented across the globe. To reinforce their position in the industry, key players shape their growth strategies mostly around increasing demand for functional food and plant-based alternatives. This report provides insight into the business strategies employed by the major players and the outlook of the industry.
This report comes in PPT.
The top 10 company list in the dairy products and alternatives industry is mostly occupied by multinationals except for Chinese Yili and Mengniu. While multinationals retain their positions in the ranking thanks to their wider global footprint and well-established brands, domestic players mostly gain through local expertise and agility, making them more resilient to unexpected situations, eg supply chain disruptions seen over the historic period.
Acquisitions and strategic divestments are key elements in remaining resilient and securing the healthy expansion of capabilities, enabling manufacturers to be agile and stand out while competition intensifies. In this regard, key players like Nestlé and Kraft Heinz are revamping their product portfolios to focus on strategically identified key growth areas (eg plant-based alternatives) and making acquisitions that serve their future growth while divesting slow-growing businesses.
Key players have intensified their investment to capture the growth opportunities in emerging markets that are relatively limited in developed regions due to market saturation. In terms of attracting investments, powder milk came into prominence due to its long shelf life and being an essential part of daily diets in fast-growing urban areas (eg in Nigeria). In that context, companies have either expanded their production capacities in powder milk (eg Arla) or introduced new products attending to specific nutrition needs (eg Nestlé).
Baby food remains one of the most dynamic categories across the globe for various reasons. In China, the fierce competition from local players, eg Yili, has propelled the multinationals, eg Danone, to partner with local players to gain a better position in the market. The US has also attracted the key players due to the milk formula shortage led by the contamination issue involving leading player Abbott, while Europe has been at the centre of innovations responding to rising demand for plant-based alternatives.
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