Fonterra, Nestle, Campina Arla, Danone, Dean Foods and DFA

When it comes to claiming of having the biggest global dairy company, most New Zealanders would always convince that they have one, which is Fonterra. How about other countries?

The Anglo-Swiss people would claim they have one too, Nestle, which in fact is the largest one in the world at the moment.

Whilst the Dutch and the Scandinavians would surely say they have the new one, Campina Arla, which actually is the second largest one after Nestle.

The French people also claim that their Groupe Danone is the biggest one in the world.

The Americans notably have Dean Foods and Dairy Farmers of America (DFA) as the biggest one in America, and of course in the world as they say.

Okay, just say all these companies are just about the same in size and turnover, considering the game theory and level playing field in global market (ha ha!). The question now is who own these companies actually?

Nestle (NESN: SWX), Danone (DANO:Euronext) and Dean Foods (DF:NYSE) are publicly traded companies, therefore anyone on earth can buy the shares and have the ownership. Meanwhile, Fonterra, DFA and Campina Arla are still in the form of co-operative groups, that only the farmers of the manufacturing countries own such company. Nestle, Danone and Dean Foods create "capitalists" whilst Fonterra, DFA and Campina Arla create "barrons". Both are just about the same, aren't they?

But I think in the future, a publicly traded company should be the ideal form for a dairy company. Domestic farmers, in my opinion, do not want to be leveraged by foreign debts or sales turnovers. In case of domestic currency appreciation, it will cost too much.

Moreover, a co-operative group of national farmers of the manufacturing countries may lead to a kind of product-nationalism that can burden global marketing. Just say the French do not like the Dutch, they may say, “Why should be bothered buying milk and cheese from the Dutch?”

I still remember not long ago there is a statement like this in my old posting:

Fonterra’s strategies ensured it would be "big in the world" in 2020, said Ferrier. "There is no doubt in my mind about that. The question is, do we do it with you, or without you?" Ferrier, however, did manage to offer a bit of sunshine. Demand for high quality, low-cost dairy products would grow markedly by 2020, he said. Fonterra farmers had to unite, and manage milk growth, despite challenges such as water shortages and farming costs, Ferrier said. (link)

Apart from that, there are many choices of dairy industry working class in the world. Go with Fonterra if you are in Downunder, go with Dean Foods or DFA if you are in America, and go with Nestle, Campina Arla or Danone if you are in Europe.

Finally, if you are the customers, just choose which smell do you like. Every milk, cheese or butter has different smell.