---
title: "Breaking | 2020 Global Dairy Top 20 Released: Yili Rises to 5th, Mengniu to 8th"
description: "Recently, Rabobank released its 2020 'Global Dairy Top 20' ranking. Overall, revenue growth for the top 20 global dairy companies slowed, with a 1.3% year-on-year increase in 2019 (in USD), compared to 2.5% in 2018. Notably, Nestle ($22.1B) and Lactalis ($21.0B) retained the top two positions, while Chinese dairy companies Yili and Mengniu made significant strides, ranking 5th and 8th respectively."
author: "FBIF"
publisher: "New Distribution"
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published: "2020-09-09"
language: "en"
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---

# Breaking | 2020 Global Dairy Top 20 Released: Yili Rises to 5th, Mengniu to 8th

> Recently, Rabobank released its 2020 'Global Dairy Top 20' ranking. Overall, revenue growth for the top 20 global dairy companies slowed, with a 1.3% year-on-year increase in 2019 (in USD), compared to 2.5% in 2018. Notably, Nestle ($22.1B) and Lactalis ($21.0B) retained the top two positions, while Chinese dairy companies Yili and Mengniu made significant strides, ranking 5th and 8th respectively.

Recently, Rabobank (RABO BANK NEDERLANDS) released its 2020 'Global Dairy Top 20' ranking.
Overall, revenue growth for the top 20 global dairy companies slowed, with a 1.3% year-on-year increase in 2019 (in USD), compared to 2.5% in 2018. Among the ranked companies, 9 saw growth (including new entrants), while 6 saw declines.
Notably, in this ranking, **Nestle ($22.1B) and Lactalis ($21.0B) retained the top two positions, unchanged from the 2019 ranking.**
Chinese dairy companies performed impressively. Yili ($13.4B) ranked first in Asia, rising from 8th in 2019 to 5th. Mengniu ($11.9B) rose from 10th to 8th, firmly in the top tier of the global top 10. In the FBIF 2020 China Food & Beverage Top 100, Yili topped the list for the first time with revenue of 89.447 billion RMB, while Mengniu ranked fourth with 79.030 billion RMB.
Rabobank focuses on agriculture and food-related industries, primarily engaging in financial transactions in agriculture, agricultural machinery, and food industries. The institution's annual top 20 ranking based on global dairy revenue is one of the most authoritative in the global dairy industry.
This year's Global Dairy Top 20 ranking is as follows: 2020 Global Dairy Top 20, Source: Rabobank 2020. Note: Revenue figures only include dairy revenue. Data is based on companies' 2019 financial reports and M&A transactions completed between January 1, 2020, and June 30, 2020. Pending acquisitions such as Friesland Campina's acquisition of Nutricima and Unilever's sale of its Chilean ice cream business are not included.

**-01-** **Step by step, the gap between Nestle and Lactalis continues to narrow**
The competition between Nestle and Lactalis is increasingly intense. In last year's ranking, the gap narrowed to $3.5 billion, and this year it further narrowed to $1.1 billion.
According to Rabobank's analysis, Nestle divested its $1.8 billion U.S. ice cream business and other assets, some of which were acquired by Lactalis, leading to a significant reduction in the gap between the two global dairy companies.
French dairy giant Lactalis has added 41 transactions since 2013, expanding its dairy empire, and recently expanded its global footprint in the Middle East, Africa, North America, and South America. The company previously acquired Stonyfield from Danone for $875 million, establishing a foothold in the organic products market. In 2018, it acquired Siggi's, a New York-based Icelandic-style yogurt maker.
In a March 2020 Food Dive interview, Lactalis's CEO revealed plans to continue venturing into natural, high-protein, simple-ingredient products with high nutritional content, including plant-based and traditional dairy products.
In contrast, Nestle, the long-time leader in the global dairy industry, has chosen to divest some non-core dairy assets. For example, at the end of January 2020, it sold its U.S. ice cream business, including Haagen-Dazs, to ice cream company Froneri for $4 billion. Consequently, dairy sales decreased by $2.1 billion compared to last year.

**-02-** **Rise of Chinese dairy companies: Yili and Mengniu both achieve leaps**
**Asian companies performed outstandingly in this year's ranking. Increasingly fierce competition in the domestic market has prompted Yili and Mengniu to accelerate overseas expansion.**
**China's largest dairy company, Yili, entered the top five for the first time.** In 2018, Yili's dairy revenue was 79.6 billion RMB; in 2019, it reached 90.2 billion RMB, achieving a growth of over 10 billion RMB. The year-on-year increase was nearly 20%, partly due to the acquisition of Westland, New Zealand's second-largest dairy cooperative. Industry insiders indicate that **Yili is building a 'global health ecosystem' by accelerating its internationalization process.**
In 2019, Yili actively expanded new businesses, launching 'Yiran' milk mineral light beverage.
In 2019, Ambrosial's annual sales surpassed the 20 billion RMB threshold.
2020 is also the final year for Yili's 'Top Five and 100 Billion' goal proposed in 2014 (i.e., by 2020, Yili would enter the global dairy top five and revenue exceed 100 billion RMB). Now, the top five goal has been achieved.
Additionally, **another Chinese dairy giant, Mengniu, ranked 10th globally in 2019 and rose to 8th in the 2020 global dairy ranking.** In 2018, Mengniu's revenue was 69 billion RMB; in 2019, it was 79 billion RMB, with an annual increase also reaching 10 billion.
Mengniu's annual report shows that in 2019, its ambient business revenue achieved double-digit growth, with particularly strong sales of high-end brands. Among them, the Telunsu pure milk series continued to strengthen its high-end positioning and launched a new dreamy cap packaging. Purezen underwent a youthful upgrade through brand identity, spokesperson, and product flavors.
Image source: Telunsu
In 2019, Mengniu focused on star products such as Guanyiru, Youyi C, and branded yogurt, developing new products to drive low-temperature business growth. Mengniu also launched a nourishing yogurt - Ziyang Nuanyan yogurt, creating a new category of nourishing yogurt.
Image source: Mengniu official WeChat account
**After acquiring Australia's Bellamy's and forming a joint venture with Coca-Cola to enter the low-temperature milk market in China, Mengniu's stock price rose.**
On August 14, Mengniu (2319.HK) also ranked in the top 30 of Hong Kong-listed companies for sustainable development performance due to its outstanding performance in sustainability.
However, Mengniu's plan to acquire Australia's second-largest dairy company, Lion, was blocked. Experts analyze that the termination of the Lion acquisition will slightly slow Mengniu's international expansion, but the overall impact is limited. Meanwhile, Mengniu recently announced it would stop subscribing to Miaokelanuo, maintaining a prudent investment strategy.

**-03-** **Meiji accelerates growth; Danone and Fonterra decline in ranking**
Dairy Farmers of America (DFA), the largest U.S. dairy company, rose from 6th to 3rd in this ranking due to strategic acquisitions. DFA acquired Dean Foods, previously ranked 11th (which filed for bankruptcy protection in November 2019), agreeing to purchase it for $425 million and assume Dean Foods' debt.
Japan's Meiji ($5.9B) also rose significantly, from 16th to 13th. In July 2020, Meiji announced the establishment of a new company in China, with a new factory to be operational by 2023. At that time, Meiji will have three factories for milk and yogurt business in China.
Germany's DMK Group rose 2 places to 11th, having adjusted its business divisions in 2019 to improve agility and innovation capabilities.
Additionally, a new face appeared in the ranking: Gujarat Co-operative Milk Marketing Federation (GCMMF) from India, owned by 3.6 million milk producers in Gujarat. According to the Economic Times, its annual growth rate has been stable at 15%, and it directly entered the ranking at 16th this year.
However, some companies saw declines, with a total of 6 falling in the ranking.
Danone's dairy revenue was $18 billion in 2018 and $18.2 billion in 2019, a small increase. Growth in organic products was insufficient to maintain Danone's ranking; **Danone, ranked 3rd in 2019, fell to 4th in 2020.**
**Fonterra, ranked 4th in 2019, fell to 6th in 2020.** Fonterra's revenue was $14.3 billion in 2018 and $13.2 billion in 2019, a decrease of $1.1 billion.
**Friesland Campina, ranked 5th in 2019, fell to 7th in 2020.** Friesland Campina's revenue was $13.8 billion in 2018 and $12.6 billion in 2019.
Fonterra and Friesland Campina merged major dairy assets, leading to declines in average annual sales in both USD and EUR, and both fell two places in this year's ranking.
Similarly, Arla Foods also dropped 2 places in the ranking, but its revenue did not decrease when calculated in EUR.
**New Zealand and European cooperative members face greater environmental constraints, so these companies are likely to focus on balancing value strategies and plant capacity.**

**-04-** **Review of 2019: More active M&A activity in the dairy industry**
In 2019, global dairy M&A activity reached 115 deals, slightly higher than the 112 deals in the previous year. Most deals in 2019 occurred in Europe (64 deals), including investments, divestitures, acquisitions, joint ventures, and strategic alliances, followed by North America and Asia with 39 and 25 deals, respectively. As of mid-2020, despite the pandemic, the number of deals had already reached 52, and with expectations of a more active transaction environment in 2021, M&A activity is expected to increase further.
For most companies, the strategic question remains whether to invest or divest, as 10 of the top 20 global dairy companies saw year-on-year declines in USD sales.

**-05-** **Looking ahead: Challenges and adjustments**
Looking to the next year, **Rabobank expects milk production in most major exporting countries to continue its low growth trend, partly due to increased farm numbers, rising production costs, and stricter environmental regulations.**
**China's economic slowdown, coupled with the post-pandemic global recession, will lead consumers to reduce spending.** Therefore, companies may face declining profit margins unless they can capitalize on the opportunity to 'win in the domestic market,' as consumers change their purchasing habits, focusing more on health and wellness and less on dining out.
At the same time, **companies may reconsider their global strategies. Given increasing global trade tensions and more domestic food security policies, more manufacturers are choosing to produce domestically rather than trade.**
Source: FBIF Food & Beverage Innovation (ID: FoodInnovation)


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