Seven of the world’s top 10 dairy companies have operations in New Zealand because of our world-leading position, Coriolis managing director Tim Morris says.

His consultancy has researched and written a 180-page report on the NZ dairy industry that highlights the degree of foreign direct investment, much of it unpublicised.

As Fonterra contemplates shrinking its footprint to the home country, numerous others have invested in mainly value-add businesses using NZ dairy.

Morris rejects the propositions that consumers are turning away from dairy foods and that NZ has passed “peak milk”.

Seventeen out of every 20 people on the globe consume dairy products, at an average of 120 litres equivalent per person annually, a thirst that is growing by a litre a year.

The report says NZ dairy processing has investments from five private equity firms, 14 multinationals, seven state-owned enterprises along with three domestic co-operatives, three locally listed companies, two Māori investor groups and hundreds of private companies.

We have eight of the world’s 10 largest milk driers, some 50 milk collection sites, 10,000-plus dairy farms and 600 to 700 dairy firms, depending on definition.

“Going out wider into the supply chain, NZ has a farmer-owned dairy genetics firm, two farmer-owned fertiliser firms and three farmer-owned farm supplies firms.

“All of this comes together to make New Zealand the most competitive dairy producer and exporter on the planet.”

No wonder the world’s biggest rapidly expanding multinationals want in here, Morris says.

New Zealand is the world leader in cross-border dairy trade.

It supplies 14% of the world’s imported dairy ingredients and dairy foods, ranging from 55% for China, to 40-50% around southeast Asian countries and about 20% in the Middle East and the United States.

Leading the way in the group of the seven largest dairy companies active in NZ are Lactalis, Nestlé, Danone and Friesland from Europe.

We also have Yili and Mengniu from China and NZ super co-operative Fonterra.

The three not active here are Dairy Farmers of America, Arla in Europe and Saputo in Canada and Australia.

Lactalis has an infant formula processor and packer, as does Danone, and Nestlé subsidiary Froneri, the world’s second largest ice-cream company, bought Tip Top from Fonterra in 2019.

Yili owns Oceania and Westland dairy companies and Mengniu has an ingredients plant at Pōkeno, South Auckland.

Asian multinational Olam is building a plant in Tokoroa, Waikato and Singapore-based Wilmar owns Goodman Fielder, the second-largest dairy foods company in NZ.

Vietnamese dairy company Vinnamilk has share of Miraka, Bright Dairy of China a share of Synlait, and Imanaka of Japan a share of Waiu, in Bay of Plenty.

Coriolis lists five reasons why foreign firms are investing here:

• To strengthen existing market positions.

• Global leaders making investments here.

• Seeking new and more attractive growth platforms.

• Investing in sustainability.

• Divesting of non-core businesses.

Many of the foreign investments are small, family-owned businesses among the 600 to 700 dairy firms active in this country.

“Analysis of our database shows 90% of dairy products firms have revenue under $10m, while about 50 firms (~10%) have revenue over this.

“Many of the smaller ones are nutraceutical firms with innovative dairy-derived products,” Morris says.

At the milk-to-ingredients processing level NZ has 16 companies, 12 in bovine, two sheep and two goat.

On average, there has been a new entrant every two years since dairy industry deregulation in 2000.

They supply about 100 consumer products manufacturers, including fluid and flavoured milks, yoghurts and specialty cheeses.

A large, diverse and growing tier of the sector is ice cream and infant formula manufacturing on a base of dairy ingredients but also including many non-dairy components.

The Coriolis Dairy 2024 report has profiles of almost 200 dairy firms and is now on sale from the consultancy.

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