Australia

MarketLine Industry Profile
Dairy in Australia
November 2014
Reference Code: 0125-0711
Publication Date: November 2014
WWW.MARKETLINE.COM
MARKETLINE. THIS PROFILE IS A LICENSED PRODUCT AND IS NOT TO BE PHOTOCOPIED
Australia - Dairy 0125 - 0711 - 2013
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EXECUTIVE SUMMARY
Market value
The Australian dairy market grew by 3% in 2013 to reach a value of $7,149.5 million.
Market value forecast

In 2018, the Australian dairy market is forecast to have a value of $8,258.7 million, an increase of 15.5% since 2013.
Market volume
The Australian dairy market grew by 2.4% in 2013 to reach a volume of 501.5 million kg.
Market volume forecast

In 2018, the Australian dairy market is forecast to have a volume of 589.7 million kg, an increase of 17.6% since 2013.
Category segmentation
Milk is the largest segment of the dairy market in Australia, accounting for 31.9% of the market's total value.
Geography segmentation
Australia accounts for 9.2% of the Asia-Pacific dairy market value.
Market share
Kirin Holding Company, Limited is the leading player in the Australian dairy market, generating a 21.5% share of the
market's value.
Market rivalry
Despite their diversified dairy portfolios, many players are similar to one another and this tends to boosts rivalry.
Australia - Dairy 0125 - 0711 - 2013

TABLE OF CONTENTS
Executive Summary ....................................................................................................................................................... 2
Market value............................................................................................................................................................... 2
Market value forecast ................................................................................................................................................. 2
Market volume............................................................................................................................................................ 2
Market volume forecast .............................................................................................................................................. 2
Category segmentation .............................................................................................................................................. 2
Geography segmentation ........................................................................................................................................... 2
Market share .............................................................................................................................................................. 2
Market rivalry.............................................................................................................................................................. 2
Market Overview ............................................................................................................................................................ 7
Market definition ......................................................................................................................................................... 7
Market analysis .......................................................................................................................................................... 7
Market Data ................................................................................................................................................................... 8
Market value............................................................................................................................................................... 8
Market volume............................................................................................................................................................ 9
Market Segmentation ................................................................................................................................................... 10
Category segmentation ............................................................................................................................................ 10
Geography segmentation ......................................................................................................................................... 11
Market share ............................................................................................................................................................ 12
Market distribution .................................................................................................................................................... 13
Market Outlook ............................................................................................................................................................. 14
Market value forecast ............................................................................................................................................... 14
Market volume forecast ............................................................................................................................................ 15
Five Forces Analysis .................................................................................................................................................... 16
Summary .................................................................................................................................................................. 16
Buyer power ............................................................................................................................................................. 17
Supplier power ......................................................................................................................................................... 18
New entrants ............................................................................................................................................................ 19
Threat of substitutes................................................................................................................................................. 20
Degree of rivalry ....................................................................................................................................................... 21
Leading Companies ..................................................................................................................................................... 22
Australia - Dairy 0125 - 0711 - 2013

Fonterra Co-operative Group Limited ....................................................................................................................... 22
Groupe Lactalis ........................................................................................................................................................ 25
Kirin Holdings Company, Limited ............................................................................................................................. 26
Devondale Murray Goulburn Co-operative Co. Limited ............................................................................................ 29
Macroeconomic Indicators ........................................................................................................................................... 32
Country Data ............................................................................................................................................................ 32
Appendix ...................................................................................................................................................................... 34
Methodology............................................................................................................................................................. 34
Industry associations ................................................................................................................................................ 35
Related MarketLine research ................................................................................................................................... 35
Australia - Dairy 0125 - 0711 - 2013

LIST OF TABLES
Table 1: Australia dairy market value: $ million, 2009–13 .............................................................................................. 8
Table 2: Australia dairy market volume: million kg, 2009–13 ......................................................................................... 9
Table 3: Australia dairy market category segmentation: $ million, 2013 ...................................................................... 10
Table 4: Australia dairy market geography segmentation: $ million, 2013 ................................................................... 11
Table 5: Australia dairy market share: % share, by value, 2013 .................................................................................. 12
Table 6: Australia dairy market distribution: % share, by value, 2013 .......................................................................... 13
Table 7: Australia dairy market value forecast: $ million, 2013–18 .............................................................................. 14
Table 8: Australia dairy market volume forecast: million kg, 2013–18.......................................................................... 15
Table 9: Fonterra Co-operative Group Limited: key facts ............................................................................................. 22
Table 10: Fonterra Co-operative Group Limited: key financials ($) .............................................................................. 23
Table 11: Fonterra Co-operative Group Limited: key financials (A$)............................................................................ 23
Table 12: Fonterra Co-operative Group Limited: key financial ratios ........................................................................... 23
Table 13: Groupe Lactalis: key facts ............................................................................................................................ 25
Table 14: Kirin Holdings Company, Limited: key facts ................................................................................................. 26
Table 15: Kirin Holdings Company, Limited: key financials ($) .................................................................................... 27
Table 16: Kirin Holdings Company, Limited: key financials (¥) .................................................................................... 27
Table 17: Kirin Holdings Company, Limited: key financial ratios .................................................................................. 27
Table 18: Devondale Murray Goulburn Co-operative Co. Limited: key facts ................................................................ 29
Table 19: Devondale Murray Goulburn Co-operative Co. Limited: key financials ($) ................................................... 29
Table 20: Devondale Murray Goulburn Co-operative Co. Limited: key financials (A$)................................................. 30
Table 21: Devondale Murray Goulburn Co-operative Co. Limited: key financial ratios ................................................ 30
Table 22: Australia size of population (million), 2009–13 ............................................................................................. 32
Table 23: Australia gdp (constant 2005 prices, $ billion), 2009–13 .............................................................................. 32
Table 24: Australia gdp (current prices, $ billion), 2009–13 ......................................................................................... 32
Table 25: Australia inflation, 2009–13 .......................................................................................................................... 33
Table 26: Australia consumer price index (absolute), 2009–13 ................................................................................... 33
Table 27: Australia exchange rate, 2009–13 ................................................................................................................ 33
Australia - Dairy 0125 - 0711 - 2013

LIST OF FIGURES
Figure 1: Australia dairy market value: $ million, 2009–13 ............................................................................................. 8
Figure 2: Australia dairy market volume: million kg, 2009–13 ........................................................................................ 9
Figure 3: Australia dairy market category segmentation: % share, by value, 2013 ...................................................... 10
Figure 4: Australia dairy market geography segmentation: % share, by value, 2013 ................................................... 11
Figure 5: Australia dairy market share: % share, by value, 2013 ................................................................................. 12
Figure 6: Australia dairy market distribution: % share, by value, 2013 ......................................................................... 13
Figure 7: Australia dairy market value forecast: $ million, 2013–18 ............................................................................. 14
Figure 8: Australia dairy market volume forecast: million kg, 2013–18 ........................................................................ 15
Figure 9: Forces driving competition in the dairy market in Australia, 2013 ................................................................. 16
Figure 10: Drivers of buyer power in the dairy market in Australia, 2013 ..................................................................... 17
Figure 11: Drivers of supplier power in the dairy market in Australia, 2013 ................................................................. 18
Figure 12: Factors influencing the likelihood of new entrants in the dairy market in Australia, 2013 ............................ 19
Figure 13: Factors influencing the threat of substitutes in the dairy market in Australia, 2013 ..................................... 20
Figure 14: Drivers of degree of rivalry in the dairy market in Australia, 2013 ............................................................... 21
Figure 15: Fonterra Co-operative Group Limited: revenues & profitability ................................................................... 24
Figure 16: Fonterra Co-operative Group Limited: assets & liabilities ........................................................................... 24
Figure 17: Kirin Holdings Company, Limited: revenues & profitability .......................................................................... 28
Figure 18: Kirin Holdings Company, Limited: assets & liabilities .................................................................................. 28
Figure 19: Devondale Murray Goulburn Co-operative Co. Limited: revenues & profitability ........................................ 30
Figure 20: Devondale Murray Goulburn Co-operative Co. Limited: assets & liabilities ................................................ 31
Australia - Dairy 0125 - 0711 - 2013

MARKET OVERVIEW
Market definition
The dairy market consists of retail sales of cheese, milk, soy products, spreadable fats, yogurt, cream, chilled dessert
and fromage frais.
The volume in this market consists of cheese, yoghurt and spreadable fats, milk (powdered and concentrated milk), soy
products (soy desserts), chilled dessert and fromage frais.
Any currency conversions used in the creation of this report have been calculated using 2013 annual average exchange
rates.
For the purposes of this report, Asia-Pacific comprises Australia, China, Hong Kong, India, Indonesia, Japan, Malaysia,
New Zealand, Philippines, Singapore, South Korea, Taiwan, Thailand, and Vietnam.
Market analysis
The Australian dairy market has experienced fairly moderate growth in recent years. This is predicted to continue in the
forecast period, albeit at a slightly decelerated rate.
The Australian dairy market had total revenues of $7,149.5m in 2013, representing a compound annual growth rate
(CAGR) of 3.9% between 2009 and 2013. In comparison, the Chinese and Japanese markets grew with CAGRs of 8.1%
and 1.7% respectively, over the same period, to reach respective values of $29,057.7m and $19,507.1m in 2013.
Market consumption volume increased with a CAGR of 1.8% between 2009 and 2013, to reach a total of 501.5 million kg
in 2013. The market's volume is expected to rise to 589.7 million kg by the end of 2018, representing a CAGR of 3.3%
for the 2013-2018 period.
The milk segment was the market's most lucrative in 2013, with total revenues of $2,280.9m, equivalent to 31.9% of the
market's overall value. The cheese segment contributed revenues of $1,943.2m in 2013, equating to 27.2% of the
market's aggregate value.
The performance of the market is forecast to decelerate, with an anticipated CAGR of 2.9% for the five-year period 2013
- 2018, which is expected to drive the market to a value of $8,258.7m by the end of 2018. Comparatively, the Chinese
and Japanese markets will grow with CAGRs of 7.6% and 1.9% respectively, over the same period, to reach respective
values of $41,965.8m and $21,416.3m in 2018.
Australia - Dairy 0125 - 0711 - 2013

MARKET DATA
Market value
The Australian dairy market grew by 3% in 2013 to reach a value of $7,149.5 million.
The compound annual growth rate of the market in the period 2009–13 was 3.9%.
Table 1: Australia dairy market value: $ million, 2009–13
Year $ million A$ million € million % Growth

2009 6,124.5 6,345.0 4,607.2
2010 6,423.0 6,654.2 4,831.7 4.9%
2011 6,688.3 6,929.1 5,031.3 4.1%
2012 6,938.2 7,188.0 5,219.3 3.7%
2013 7,149.5 7,406.9 5,378.2 3.0%
CAGR: 2009–13 3.9%
SOURCE: MARKETLINE MARKETLINE
Figure 1: Australia dairy market value: $ million, 2009–13
Australia - Dairy 0125 - 0711 - 2013

Market volume
The Australian dairy market grew by 2.4% in 2013 to reach a volume of 501.5 million kg.
The compound annual growth rate of the market in the period 2009–13 was 1.8%.
Table 2: Australia dairy market volume: million kg, 2009–13
Year million kg % Growth

2009 467.5
2010 477.6 2.2%
2011 481.8 0.9%
2012 489.8 1.7%
2013 501.5 2.4%
CAGR: 2009–13 1.8%
Figure 2: Australia dairy market volume: million kg, 2009–13
Australia - Dairy 0125 - 0711 - 2013

MARKET SEGMENTATION
Category segmentation
Milk is the largest segment of the dairy market in Australia, accounting for 31.9% of the market's total value.
The Cheese segment accounts for a further 27.2% of the market.
Table 3: Australia dairy market category segmentation: $ million, 2013
Category 2013 %
Milk 2,280.9 31.9%
Cheese 1,943.2 27.2%
Yogurt 1,173.6 16.4%
Spreadable fats 811.5 11.4%
Soy Products 177.3 2.5%
Other 763.0 10.7%
Total 7,149.5 100%
Figure 3: Australia dairy market category segmentation: % share, by value, 2013
Australia - Dairy 0125 - 0711 - 2013

Geography segmentation
Australia accounts for 9.2% of the Asia-Pacific dairy market value.
China accounts for a further 37.6% of the Asia-Pacific market.
Table 4: Australia dairy market geography segmentation: $ million, 2013
Geography 2013 %
China 29,057.7 37.6
Japan 19,507.1 25.2
Australia 7,149.5 9.2
South Korea 2,991.0 3.9
Rest of Asia-Pacific 18,611.9 24.1
Total 77,317.2 100%
Figure 4: Australia dairy market geography segmentation: % share, by value, 2013
Australia - Dairy 0125 - 0711 - 2013

Market share
Kirin Holding Company, Limited is the leading player in the Australian dairy market, generating a 21.5% share of the
market's value.
Fonterra Co-operative Group Limited accounts for a further 14.6% of the market.
Table 5: Australia dairy market share: % share, by value, 2013
Company % Share
Kirin Holding Company, Limited 21.5%
Fonterra Co-operative Group Limited 14.6%
Groupe Lactalis 8.3%
Murray Goulburn Co-Operative Co Ltd 4.3%
Other 51.4%
Total 100%
Figure 5: Australia dairy market share: % share, by value, 2013
Australia - Dairy 0125 - 0711 - 2013

Market distribution
Supermarkets / hypermarkets form the leading distribution channel in the Australian dairy market, accounting for a 72.7%
share of the total market's value.
Convenience Stores accounts for a further 14.6% of the market.
Table 6: Australia dairy market distribution: % share, by value, 2013
Channel % Share
Supermarkets / hypermarkets 72.7%
Convenience Stores 14.6%
Specialist Retailers 6.7%
Independent Retailers 3.8%
Other 2.1%
Total 100%
Figure 6: Australia dairy market distribution: % share, by value, 2013
Australia - Dairy 0125 - 0711 - 2013

MARKET OUTLOOK
Market value forecast
In 2018, the Australian dairy market is forecast to have a value of $8,258.7 million, an increase of 15.5% since 2013.
The compound annual growth rate of the market in the period 2013–18 is predicted to be 2.9%.
Table 7: Australia dairy market value forecast: $ million, 2013–18
Year $ million A$ million € million % Growth

2013 7,149.5 7,406.9 5,378.2 3.0%
2014 7,365.4 7,630.6 5,540.6 3.0%
2015 7,579.2 7,852.1 5,701.5 2.9%
2016 7,804.9 8,085.9 5,871.2 3.0%
2017 8,027.3 8,316.3 6,038.5 2.8%
2018 8,258.7 8,556.0 6,212.6 2.9%
CAGR: 2013–18 2.9%
Figure 7: Australia dairy market value forecast: $ million, 2013–18
Australia - Dairy 0125 - 0711 - 2013

Market volume forecast
In 2018, the Australian dairy market is forecast to have a volume of 589.7 million kg, an increase of 17.6% since 2013.
The compound annual growth rate of the market in the period 2013–18 is predicted to be 3.3%.
Table 8: Australia dairy market volume forecast: million kg, 2013–18
Year million kg % Growth

2013 501.5 2.4%
2014 517.0 3.1%
2015 532.4 3.0%
2016 554.7 4.2%
2017 573.0 3.3%
2018 589.7 2.9%
CAGR: 2013–18 3.3%
Figure 8: Australia dairy market volume forecast: million kg, 2013–18
Australia - Dairy 0125 - 0711 - 2013

FIVE FORCES ANALYSIS
The dairy market will be analyzed taking manufacturers/packagers of dairy products as players. The key buyers will be
taken as food retailers, and dairy farmers as the key suppliers.
Summary
Figure 9: Forces driving competition in the dairy market in Australia, 2013
Despite their diversified dairy portfolios, many players are similar to one another and this tends to boosts rivalry.
Suppliers commonly integrate forward, as dairy co-operatives offer farmers the opportunity to access larger markets and
use capital items, such as packaging and processing plants.
The dairy market is fairly easy to enter as a small enterprise; however, in order to supply to the mass market, consumer
companies must be large and have some level of integration, if successful market entry is to be secured.
Dairy products tend to be a staple in peoples' diets; therefore they are unlikely to be replaced. However, there are many
alternatives for those wishing to cut down or cut dairy from their diets.
Australia - Dairy 0125 - 0711 - 2013

Buyer power
Figure 10: Drivers of buyer power in the dairy market in Australia, 2013
Buyer power is strengthened in this market, where players can sell only to a small number of large buyers.
It is difficult to differentiate staple foods, such as milk and butter. Cheese and yogurt products are more differentiated,
with a number of niche cheese markets in operation. The dairy market is highly price sensitive, as buyers will tend to opt
for the cheaper option, especially in the milk market, subsequently enhancing buyer power. These factors boost buyer
power.
Manufacturers can target end-users with their branding strategies, or develop more individual, premium products, such
as organic yoghurt, to counter balance the power of buyers to make purchasing decisions on price alone.
An alternative distribution model for milk - direct-to-consumer morning deliveries by the dairy companies - used to be
commonplace, but is now largely supplanted by conventional retail distribution. The decline of this distribution channel
suggests that there is relatively little likelihood of players reversing the trend by integrating forward into selling to
consumers, which boosts the buying power of food retailers.
However, dairy products are an important part of most consumers' food and beverage purchasing in many countries, and
food retailers are therefore strongly motivated to stock them, weakening their buying power somewhat.
Overall, buyer power is assessed as moderate.
Australia - Dairy 0125 - 0711 - 2013

Supplier power
Figure 11: Drivers of supplier power in the dairy market in Australia, 2013
The key suppliers to this market are dairy farmers. Dairy products are, by definition, made of milk, and there are
therefore no real alternatives to raw materials.
Typically, a large-scale dairy processing and packaging company has many individual or cooperative farms supplying it
with milk. However, even the largest players are not immune to the impact of rising milk prices. Hedging is often used by
the larger players, due to the commodity nature of the market, with prices fluctuating on a daily basis. Key players buy
supplies on the futures market, with an agreed price for future supplies, in order to not be caught out by unexpected price
jumps. Such strategy tends to boost switching costs for players and increase supplier power.
Suppliers are fairly limited in their ability to differentiate their raw materials, although products, such as organic milk, do
attract a premium from dairy market players.
Forward integration by suppliers is possible, but only on a small scale. One model for this is a farmer with a small dairy
herd, who begins to make high-quality cheese for distribution at a local farmers' market or via the Internet (possible
because cheese is less perishable than other dairy products). This allows products such as milk, which are low margin
products of undifferentiated nature, to be converted into a higher margin and more differentiated products, without
prohibitive capital outlay.
Overall, supplier power is assessed as moderate.
Australia - Dairy 0125 - 0711 - 2013

New entrants
Figure 12: Factors influencing the likelihood of new entrants in the dairy market in Australia, 2013
In the Australian dairy market, small-scale entry, perhaps as an artisanal producer of premium dairy products, does not
require very large amounts of capital. However, for new entrants aiming to challenge the major players in the mass-
consumer market, entry barriers are much higher.
Companies are more and more interested in expansion through mergers and acquisitions, as this gives them the
necessary leverage over competition in the market. The main factors standing behind the trend for mergers and
acquisitions in this market include economies of scale, increasing profit levels, and reducing overheads. Scale
economies in production are important, especially in countries where a consolidated food retail sector means that players
are forced to compete intensely on price.
Most dairy products are perishable, which means that reliable supply and distribution chains are vital to avoid the costs
of wastage.
Increased concentration of the market results in companies focusing on increasing brand value, product market share,
and international presence. Leading dairy product manufacturers may have strong brands aimed at retaining end-user
loyalty, which means that new players will have a more difficult task trying to distinguish their own brands.
Government and regulatory bodies such as Dairy Australia act as a barrier to entry with strict laws regarding food safety,
which increase compliance costs.
Moderate historic growth is likely to attract potential new entrants.
Overall, there is a moderate likelihood of new players in the Australian dairy market.
Australia - Dairy 0125 - 0711 - 2013

Threat of substitutes
Figure 13: Factors influencing the threat of substitutes in the dairy market in Australia, 2013
Dairy products are an important part of most peoples’ diets and the benefits of calcium are highly publicized. Therefore,
dairy products are unlikely to be completely replaced.
However, for those who are vegan, lactose intolerant or simply looking to cut down on their dairy intake for dietary
reasons, there are potential substitutes.
Milk substitutes such as soy milk, almond milk, and rice milk can be used directly and also in baking and cooking. There
are also soy, rice, and hemp substitutes for cheese and ice cream, and soy and rice alternatives to yogurt. Some of
these alternatives may have advantages for retailers, such as cheaper storage, longer life, or higher margins.
With regards to substitution in ingredient applications (as opposed to end products), this is usually driven by price
volatility. This can drive some companies to use a more price-stable substitute, such as soy protein or maltodextrin.
Overall, the threat of substitutes is assessed as moderate.
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Degree of rivalry
Figure 14: Drivers of degree of rivalry in the dairy market in Australia, 2013
Switching costs for buyers are not particularly high, although some retailers may allocate contracts to single suppliers of
dairy products. The larger multinational players tend to operate in a number of fast moving consumer goods markets,
therefore may not be as reliant on sales of dairy products, which decreases their competitive threat.
The dairy market has become highly volatile over the past few years, with fluctuating prices. One of the factors
influencing such volatility is the lower international trade of milk.
As dairy products are usually perishable, storage costs are high.
Furthermore, industrial production of dairy products requires substantial, specialized assets, and the need to sell these
off when leaving the market translates into high exit costs.
Moderate historic growth helps to alleviate rivalry between players somewhat.
Overall, rivalry is assessed as strong.
Australia - Dairy 0125 - 0711 - 2013

LEADING COMPANIES
Fonterra Co-operative Group Limited
Table 9: Fonterra Co-operative Group Limited: key facts
Head office: Auckland, 1142 NZL

Telephone: 64 9 374 9000
Fax: 64 9 374 9001
Website: www.fonterra.com
Financial year-end: July
SOURCE: COMPANY WEBSITE MARKETLINE
Fonterra is engaged in the production of dairy ingredients, specialty ingredients and consumer products. The company
operates in New Zealand. The company also exports its products to more than 140 countries. The company has a
research and development center in New Zealand and innovation centers in Melbourne, Amsterdam, Chicago, Shanghai
and Singapore.
The company operates through four business segments: New Zealand milk products (NZMP); Australia/New Zealand
(ANZ); Asia/Africa, Middle East (Asia/AME); and Latin America (Latam).
The NZMP segment collects and processes milk from New Zealand farmers, and manufactures and markets dairy
nutrition products (including specialty dairy ingredients and base nutrition powders such as whole milk powder and skim
milk powder) under the NZMP brand. It also includes Fonterra Nutrition, Group Strategy and Optimization, Co-operative
Affairs and Group Services.
The ANZ segment encompasses fast moving consumer goods (FMCG) operations in New Zealand (including export to
the Pacific Islands) and all FMCG and ingredients operations in Australia (including milk supply and manufacturing). This
segment also includes foodservice sales in Australia and New Zealand (except for foodservice sales to quick service
restaurants) and RD1 (a 64-store retail chain for dairy farmers in New Zealand).
The Asia/AME segment represents FMCG operations in Asia (excluding North Asia), Africa and the Middle East, and
foodservice sales in Asia/AME and China. It includes international farming ventures in China.
Latam segment encompasses Soprole, an integrated dairy business in Chile, and an investment in Dairy Partners
Americas (DPA), a 50/50 joint venture with Nestle covering several markets in Latin America including Brazil, Venezuela,
Ecuador, Colombia and Argentina. The Latam segment also includes Southern Cone, an in-market ingredients sourcing
and sales business, investments in developing dairy farms in Brazil, a branded consumer cheese and butter business in
the Caribbean and an investment in Dairy Industries (Jamaica) Limited, a 50/50 joint venture with GraceKennedy Group
offering a range of dairy consumer products.
The company has subsidiaries based in New Zealand and across the world, including Soprole (a dairy company based in
Chile), RD1, ViaLactia Biosciences (a New Zealand-based research company) and Anchor Ethanol (a producer of
potable alcohol and industrial grade ethanol).
Key Metrics
The company recorded revenues of $17,995m in the fiscal year ending July 2013, a decrease of 5.7% compared to fiscal
2012. Its net income was $693m in fiscal 2013, compared to a net income of $588m in the preceding year.
Australia - Dairy 0125 - 0711 - 2013

Table 10: Fonterra Co-operative Group Limited: key financials ($)
$ million 2009 2010 2011 2012 2013

Revenues 15,477.8 16,144.8 19,180.5 19,082.0 17,995.2
Net income (loss) 578.2 645.8 727.8 587.8 693.1
Total assets 13,626.4 13,676.6 14,990.3 14,591.7 13,873.6
Total liabilities 8,988.4 8,206.6 8,676.6 8,168.0 7,360.0
Employees 15,600 15,800 16,800 17,300 17,500
SOURCE: COMPANY FILINGS MARKETLINE
Table 11: Fonterra Co-operative Group Limited: key financials (A$)
A$ million 2009 2010 2011 2012 2013

Revenues 16,035.0 16,726.0 19,871.0 19,769.0 18,643.0
Net income (loss) 599.0 669.0 754.0 609.0 718.0
Total assets 14,117.0 14,169.0 15,530.0 15,117.0 14,373.0
Table 12: Fonterra Co-operative Group Limited: key financial ratios
Ratio 2009 2010 2011 2012 2013

Profit margin 3.7% 4.0% 3.8% 3.1% 3.9%
Revenue growth (17.8%) 4.3% 18.8% (0.5%) (5.7%)
Asset growth (2.2%) 0.4% 9.6% (2.7%) (4.9%)
Liabilities growth (8.4%) (8.7%) 5.7% (5.9%) (9.9%)
Debt/asset ratio 66.0% 60.0% 57.9% 56.0% 53.1%
Return on assets 4.2% 4.7% 5.1% 4.0% 4.9%
Revenue per employee $992,167 $1,021,822 $1,141,697 $1,103,008 $1,028,296
Profit per employee $37,063 $40,870 $43,321 $33,979 $39,603
Australia - Dairy 0125 - 0711 - 2013

Figure 15: Fonterra Co-operative Group Limited: revenues & profitability
Figure 16: Fonterra Co-operative Group Limited: assets & liabilities
Australia - Dairy 0125 - 0711 - 2013

Groupe Lactalis
Table 13: Groupe Lactalis: key facts
Head office: 10-20 Rue Adolphe Beck, 53089 Laval Cedex 9, FRA
Telephone: 33 2 43 59 42
Fax: 33 2 43 59 42 63
Website: www.lactalis.fr
Financial year-end: December
Groupe Lactalis is a French company engaged in the family-owned business of exporting dairy products. The group's
products include milk, butter, cheeses, creams, yogurt, and butter. The company currently operates 192 industrial sites in
Europe, Africa, the Americas, and Asia.
The group operates in six markets in Italy: cheese, cured meats, butter, chilled dairy, industrial products and nutrition. Its
Italian brands include Galbani, Vallelata, Invernizzi, Locatelli, Cademartori and President, Fruttolo, LC1 and Sveltesse.
The group's French brands include Bridel, Bridelice, Bridedelight, BA, Lactel, Lepetit, Lanquetot, Rouy, Rondele, istara,
Corsica, Beulet, Salakis, Tendriade, Chaussee Moines, Marin and Picot.
The group's other brands include President, Galbani, Rondele, Dukaat, Sorrento, Bridel, Invernizzi, Seriously Strong,
Laukri, Locatelli, Food master, Societe, Lactel, Precious Cheese, Pride, Chufi, Primevere, Laicran, and Celia among
others.
President branded products are available in more than 140 countries. The group offers milk, cream, butter, food mix,
cheese, and delicatessen products under this brand.
The group sells over 300 products in 100 countries under the brand Galbani, which is a supplier of Italian cheese.
Lactalis offers various varieties of creams and light dairy spread, including milk, cream, butter, food mix, cheese and deli.
Societe brand distributes AOP (Appellation d'Origine Protegee) cheese worldwide. Le Roitelet brand offers soft cheese in
the overseas territories. The group offers cheddar cheese under the brand Seriously in the UK. Lactel produces a range
of milks, such as flavored milk. Pride is the brand of processed cheese and mozzarella. The Laicran brand offers
powdered milk.
Celia offers specially adapted formula milks that are similar to maternal milk. The products under the Celia brand include
milk, infant cereals, daily nutrition, and infant and adult nutrition.
The group's subsidiaries include Sorrento Lactalis, Lactalis USA, Lactalis International, Lactalis Vostok, Lactalis Ukraine,
Lactalis Alba, McLelland & Son Ltd, Lactalis Deutschland GmbH, Gruppo Lactalis Italia SpA, Grupo Lactalis Iberia SA,
Lactalis Europe Du Nord SA and Lactalis Polska and Lactalis CZ sro.
Key Metrics
The company recorded revenues of EUR16.0bn (approximately $21.2bn) in 2013. Further financial information is not
available, as Lactalis operates as a privately owned company.
Australia - Dairy 0125 - 0711 - 2013

Kirin Holdings Company, Limited
Table 14: Kirin Holdings Company, Limited: key facts
Head office: 10-1 Shinkawa 2-chome, Chuo-ku, Tokyo 104 8288, JPN
Telephone: 81 3 5541 5321
Fax: 81 3 5540 3547
Website: www.kirinholdings.co.jp
Financial year-end: December
Ticker: 2503
Stock exchange: Tokyo
Kirin is a manufacturer of alcoholic beverages and soft drinks. The group is also engaged in other businesses including
bio-chemicals, pharmaceuticals, dairy foods and functional food. Its operations are managed by 236 consolidated
subsidiaries, one unconsolidated subsidiary, and 15 equity-method affiliates.
The group operates through five business segments: domestic alcoholic beverages, overseas beverages,
pharmaceuticals and bio-chemicals, domestic non-alcoholic beverages, and other operations.
The domestic alcoholic beverage segment is engaged in the domestic production, importation and marketing of beer,
wines and whiskeys. The two core subsidiaries of this segment are Kirin Brewery Co. and the Mercian Corporation.
The overseas beverages segment comprises the production and sale of integrated alcoholic and non-alcoholic
beverages. The segment operates mainly in East Asia, Southeast Asia and Oceania. Additional operations take place in
Brazil, the US and Europe.
The domestic non-alcoholic beverages segment is engaged in the production and marketing of canned and bottled green
and black teas, canned and bottled coffees, fruit juices and carbonated soft drinks; and the production, importation, and
marketing of bottled waters.
The company produces dairy under the brand name Koiwai Dairy Products Co., Ltd; products includes milk and milk
beverages, yogurts, butter, margarine and cheese.
Key Metrics
The company recorded revenues of $19,922m in the fiscal year ending December 2013, an increase of 3.9% compared
to fiscal 2012. Its net income was $878m in fiscal 2013, compared to a net income of $576m in the preceding year.
Australia - Dairy 0125 - 0711 - 2013

Table 15: Kirin Holdings Company, Limited: key financials ($)
$ million 2009 2010 2011 2012 2013

Revenues 23,352.2 22,320.4 21,233.7 19,172.2 19,922.0
Net income (loss) 504.0 116.8 75.9 576.0 877.9
Total assets 29,324.5 27,151.8 29,253.4 30,245.6 29,685.9
Employees 35,150 31,966 40,000 40,348 39,922
Table 16: Kirin Holdings Company, Limited: key financials (¥)
¥ million 2009 2010 2011 2012 2013

Revenues 2,278,473.0 2,177,802.0 2,071,774.0 1,870,628.0 1,943,786.0
Net income (loss) 49,172.0 11,394.0 7,407.0 56,198.0 85,656.0
Total assets 2,861,194.0 2,649,197.0 2,854,254.0 2,951,061.0 2,896,456.0
Total liabilities 1,879,675.0 1,686,513.0 2,001,932.0 1,797,160.0 1,595,729.0
Table 17: Kirin Holdings Company, Limited: key financial ratios
Ratio 2009 2010 2011 2012 2013

Profit margin 2.2% 0.5% 0.4% 3.0% 4.4%
Revenue growth 18.5% (4.4%) (4.9%) (9.7%) 3.9%
Asset growth 9.2% (7.4%) 7.7% 3.4% (1.9%)
Liabilities growth 11.1% (10.3%) 18.7% (10.2%) (11.2%)
Debt/asset ratio 65.7% 63.7% 70.1% 60.9% 55.1%
Return on assets 1.8% 0.4% 0.3% 1.9% 2.9%
Revenue per employee $664,358 $698,255 $530,843 $475,170 $499,022
Profit per employee $14,338 $3,653 $1,898 $14,275 $21,990
Australia - Dairy 0125 - 0711 - 2013

Figure 17: Kirin Holdings Company, Limited: revenues & profitability
Figure 18: Kirin Holdings Company, Limited: assets & liabilities
Australia - Dairy 0125 - 0711 - 2013

Devondale Murray Goulburn Co-operative Co. Limited
Table 18: Devondale Murray Goulburn Co-operative Co. Limited: key facts
Freshwater Place, Level 15, 2 Southbank Boulevard, Southbank, Victoria

Head office:
3006, AUS
Telephone: 61 3 9040 5000
Website: www.mgc.com.au
Financial year-end: June
Murray Goulburn Co-operative (MG) is an Australia-based milk processing company that supplies dairy ingredients and
exports processed products. MG is 100% controlled by Australian dairy farmers. The company operates six processing
sites in Victoria and one in Tasmania.
The company operates through three business segments: ingredients, food service, and trading.
In the ingredients segment, the company's product portfolio includes milk powders, whey powders, cheese products,
lactose, anhydrous milk fats (AMF), specialty milk fats, specialty milk proteins including milk protein concentrates,
caseinates, bioactives including lactoferrin, natural milk minerals, and nutritional products including infant formula.
The food service segment supplies dairy products to organizations including government and educational institutions,
restaurants, cafes, the airline industry, and the hospitality industry, amongst others. The food service portfolio covers a
range of cheddar and mozzarella cheeses, butters and cream as well as milk powders. The company markets milk,
butter, spreads and cheese under its flagship brand, Devondale. The other brands include Liddells and Ascend
The company's trading segment stocks a wide range of farm inputs and services including fodder, feed, fertilizer, farm
chemicals, animal health products, dairy hygiene products, work and safety wear, free on-farm delivery, 30 and 45-day
current accounts for all purchases, and seasonal operating loans to assist with seasonal peak purchasing.
The company also has a manufacturing facility outside Australia, named Murray Goulburn Qingdao Dairy. It produces a
range of infant nutrition products under the NatraStart brand which are marketed and distributed throughout China
through a network of distribution partners.
Key Metrics
The company recorded revenues of $2,815m in the fiscal year ending June 2014, an increase of 22.3% compared to
fiscal 2013. Its net income was $28m in fiscal 2014, compared to a net income of $34m in the preceding year.
Table 19: Devondale Murray Goulburn Co-operative Co. Limited: key financials ($)
$ million 2010 2011 2012 2013 2014

Revenues 2,164.1 2,208.0 2,285.0 2,302.1 2,815.2
Net income (loss) 27.1 35.1 14.0 33.7 28.3
Total assets 1,466.2 1,477.0 1,575.5 1,601.4 1,702.2
Total liabilities 772.2 715.9 842.9 938.8 982.2
Australia - Dairy 0125 - 0711 - 2013

Table 20: Devondale Murray Goulburn Co-operative Co. Limited: key financials (A$)
A$ million 2010 2011 2012 2013 2014

Revenues 2,242.0 2,287.5 2,367.2 2,385.0 2,916.5
Net income (loss) 28.0 36.3 14.5 34.9 29.3
Total assets 1,519.0 1,530.1 1,632.2 1,659.1 1,763.4
Total liabilities 800.0 741.7 873.2 972.6 1,017.5
Table 21: Devondale Murray Goulburn Co-operative Co. Limited: key financial ratios
Ratio 2010 2011 2012 2013 2014

Profit margin 1.3% 1.6% 0.6% 1.5% 1.0%
Revenue growth (6.8%) 2.0% 3.5% 0.8% 22.3%
Asset growth (3.7%) 0.7% 6.7% 1.6% 6.3%
Liabilities growth (6.0%) (7.3%) 17.7% 11.4% 4.6%
Debt/asset ratio 52.7% 48.5% 53.5% 58.6% 57.7%
Return on assets 1.8% 2.4% 0.9% 2.1% 1.7%
Figure 19: Devondale Murray Goulburn Co-operative Co. Limited: revenues & profitability
Australia - Dairy 0125 - 0711 - 2013

Figure 20: Devondale Murray Goulburn Co-operative Co. Limited: assets & liabilities
Australia - Dairy 0125 - 0711 - 2013

MACROECONOMIC INDICATORS
Country Data
Table 22: Australia size of population (million), 2009–13
Year Population (million) % Growth

2009 21.8 1.8%
2010 22.1 1.3%
2011 22.3 1.2%
2012 22.7 1.7%
2013 23.0 1.3%
Table 23: Australia gdp (constant 2005 prices, $ billion), 2009–13
Year Constant 2005 Prices, $ billion % Growth

2009 818.9 1.5%
2010 837.4 2.3%
2011 859.0 2.6%
2012 890.0 3.6%
2013 911.5 2.4%
Table 24: Australia gdp (current prices, $ billion), 2009–13
Year Current Prices, $ billion % Growth

2009 994.1 (5.5%)
2010 1,247.9 25.5%
2011 1,493.3 19.7%
2012 1,537.0 2.9%
2013 1,487.3 (3.2%)
Australia - Dairy 0125 - 0711 - 2013

Table 25: Australia inflation, 2009–13
Year Inflation Rate (%)

2009 1.8%
2010 2.8%
2011 3.3%
2012 1.7%
2013 2.4%
Table 26: Australia consumer price index (absolute), 2009–13
Year Consumer Price Index (2005 = 100)

2009 112.6
2010 115.8
2011 119.7
2012 121.8
2013 124.7
Table 27: Australia exchange rate, 2009–13
Year Exchange rate ($/A$) Exchange rate (€/A$)

2009 1.2812 1.7816
2010 1.0906 1.4462
2011 0.9687 1.3477
2012 0.9660 1.2419
2013 1.0360 1.3772
Australia - Dairy 0125 - 0711 - 2013

APPENDIX
Methodology
MarketLine Industry Profiles draw on extensive primary and secondary research, all aggregated, analyzed, cross-
checked and presented in a consistent and accessible style.
Review of in-house databases – Created using 250,000+ industry interviews and consumer surveys and supported by
analysis from industry experts using highly complex modeling & forecasting tools, MarketLine’s in-house databases
provide the foundation for all related industry profiles
Preparatory research – We also maintain extensive in-house databases of news, analyst commentary, company
profiles and macroeconomic & demographic information, which enable our researchers to build an accurate market
overview
Definitions – Market definitions are standardized to allow comparison from country to country. The parameters of each
definition are carefully reviewed at the start of the research process to ensure they match the requirements of both the
market and our clients
Extensive secondary research activities ensure we are always fully up-to-date with the latest industry events and
trends
MarketLine aggregates and analyzes a number of secondary information sources, including:
- National/Governmental statistics
- International data (official international sources)
- National and International trade associations
- Broker and analyst reports
- Company Annual Reports
- Business information libraries and databases
Modeling & forecasting tools – MarketLine has developed powerful tools that allow quantitative and qualitative data to
be combined with related macroeconomic and demographic drivers to create market models and forecasts, which can
then be refined according to specific competitive, regulatory and demand-related factors
Continuous quality control ensures that our processes and profiles remain focused, accurate and up-to-date
Australia - Dairy 0125 - 0711 - 2013

Industry associations
International Dairy Foods Association (IDFA)
1250 H Street, NW, Suite 900, Washington, DC 20005, USA
Tel.: 1 202 737 4332
Fax: 1 202 331 7820
www.idfa.org
International Dairy Federation
Diamant Building, Boulevard Auguste Reyers 80, 1030 Brussels, BEL
Tel.: 32 2 733 9888
Fax: 32 2 733 0413
www.fil-idf.org
Dairy Industry Association of Australia
671 Sneydes Road, Werribee Vic 3030, Australia
Tel.: 61 3 9731 3393
Fax: 61 3 9731 3206
www.diaa.asn.au
Related MarketLine research

Industry Profile
Dairy in Europe
Dairy in Asia-Pacific
Global Dairy
Dairy in China
Australia - Dairy 0125 - 0711 - 2013

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MarketLine Industry Profile

Reference Code: 0125-0711

Publication Date: November 2014

Australia - Dairy 0125 - 0711 - 2013

© MARKETLINE THIS PROFILE IS A LICENSED PRODUCT AND IS NOT TO BE PHOTOCOPIED Page | 1

Market value forecast

Market volume forecast

Australia - Dairy 0125 - 0711 - 2013

© MARKETLINE THIS PROFILE IS A LICENSED PRODUCT AND IS NOT TO BE PHOTOCOPIED Page | 2

Market value forecast ................................................................................................................................................. 2

Market volume forecast .............................................................................................................................................. 2

Category segmentation .............................................................................................................................................. 2

Geography segmentation ........................................................................................................................................... 2

Market share .............................................................................................................................................................. 2

Market Overview ............................................................................................................................................................ 7

Market definition ......................................................................................................................................................... 7

Market analysis .......................................................................................................................................................... 7

Market Data ................................................................................................................................................................... 8

Market Segmentation ................................................................................................................................................... 10

Category segmentation ............................................................................................................................................ 10

Geography segmentation ......................................................................................................................................... 11

Market share ............................................................................................................................................................ 12

Market distribution .................................................................................................................................................... 13

Market Outlook ............................................................................................................................................................. 14

Market value forecast ............................................................................................................................................... 14

Market volume forecast ............................................................................................................................................ 15

Five Forces Analysis .................................................................................................................................................... 16

Buyer power ............................................................................................................................................................. 17

Supplier power ......................................................................................................................................................... 18

New entrants ............................................................................................................................................................ 19

Degree of rivalry ....................................................................................................................................................... 21

Leading Companies ..................................................................................................................................................... 22

Australia - Dairy 0125 - 0711 - 2013

© MARKETLINE THIS PROFILE IS A LICENSED PRODUCT AND IS NOT TO BE PHOTOCOPIED Page | 3

Groupe Lactalis ........................................................................................................................................................ 25

Kirin Holdings Company, Limited ............................................................................................................................. 26

Devondale Murray Goulburn Co-operative Co. Limited ............................................................................................ 29

Macroeconomic Indicators ........................................................................................................................................... 32

Country Data ............................................................................................................................................................ 32

Industry associations ................................................................................................................................................ 35

Related MarketLine research ................................................................................................................................... 35

Australia - Dairy 0125 - 0711 - 2013

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Table 2: Australia dairy market volume: million kg, 2009–13 ......................................................................................... 9

Table 3: Australia dairy market category segmentation: $ million, 2013 ...................................................................... 10

Table 4: Australia dairy market geography segmentation: $ million, 2013 ................................................................... 11

Table 5: Australia dairy market share: % share, by value, 2013 .................................................................................. 12

Table 6: Australia dairy market distribution: % share, by value, 2013 .......................................................................... 13

Table 7: Australia dairy market value forecast: $ million, 2013–18 .............................................................................. 14

Table 8: Australia dairy market volume forecast: million kg, 2013–18.......................................................................... 15

Table 9: Fonterra Co-operative Group Limited: key facts ............................................................................................. 22

Table 11: Fonterra Co-operative Group Limited: key financials (A$)............................................................................ 23

Table 13: Groupe Lactalis: key facts ............................................................................................................................ 25

Table 14: Kirin Holdings Company, Limited: key facts ................................................................................................. 26

Table 22: Australia size of population (million), 2009–13 ............................................................................................. 32

Table 24: Australia gdp (current prices, $ billion), 2009–13 ......................................................................................... 32

Table 25: Australia inflation, 2009–13 .......................................................................................................................... 33

Table 26: Australia consumer price index (absolute), 2009–13 ................................................................................... 33

Table 27: Australia exchange rate, 2009–13 ................................................................................................................ 33

Australia - Dairy 0125 - 0711 - 2013

© MARKETLINE THIS PROFILE IS A LICENSED PRODUCT AND IS NOT TO BE PHOTOCOPIED Page | 5

Figure 2: Australia dairy market volume: million kg, 2009–13 ........................................................................................ 9

Figure 5: Australia dairy market share: % share, by value, 2013 ................................................................................. 12