Dairy products and alternatives players are navigating through economically turbulent times by adapting their strategies, with a focus on core markets and fast-growing brands and products. Meanwhile, to sustain high margins, producers are emphasising the additional benefits of their products. Sustainability is playing an increasingly crucial role, with major market players investing in plant-based options and environmentally friendly packaging.
This report comes in PPT.
While maintaining top positions, multinational companies such as Danone, Nestlé, Kraft Heinz and FrieslandCampina are gradually losing market share, facing increased competition from local players, private label, and Chinese and Indian firms. Acquisitions, strategic divestments and portfolio revisions are crucial focal points for growth strategies and maintaining resilience.
The key multinational market players, especially Lactalis, Savencia and FrieslandCampina, have grown significantly in emerging markets, given the high market saturation in mature markets. Latin America and the Asia Pacific are the regions where they are increasingly directing their investments. With the Chinese baby food market experiencing stagnation, Danone, Nestlé, and FrieslandCampina are seeking new opportunities in this market to drive growth.
In 2023, the industry’s growth was driven primarily by price increases. Companies adjusted shelf prices, modified package sizes and offered promotions. Portfolio revision is another strategy, involving divestment from expensive products with low demand. Kraft Heinz sold its natural and grated cheese, while both Danone and Nestlé are revising their organic facilities across several markets. As consumers seek the best deals, private label is gaining momentum and growing rapidly in Latin America, Eastern Europe, and the Middle East and Africa.
Market players, led by Danone and Nestlé, are offering health-conscious consumers products with functional ingredients, such as high protein and probiotics. Yili and Yakult are expanding their portfolios with products targeting specific life stages and health concerns. Despite rising prices, plant-based dairy and baby food remain on the rise, with Danone, Nestlé and Kraft Heinz, among others, continuing to invest in this area. To meet sustainability goals, businesses are developing eco-friendly and recyclable solutions in their dairy portfolios.
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