French dairy giant Lactalis reinforced its position as the world's largest dairy company in 2025, with annual turnover in excess of US$40 billion placing it more than US$16 billion ahead of Switzerland's Nestlé in second place, according to Rabobank's 2026 Global Dairy Top 20 report.
The top five was rounded out by Dairy Farmers of America (US), Arla Foods (Denmark), and Danone (France).
The report says Lactilis continued to leverage its multi-local operating model and acquisition strategy to expand its presence across key dairy markets.
“The most significant development was the completion of the acquisition of Fonterra's Mainland consumer business in Asia-Pacific, a transaction that significantly strengthens Lactalis' footprint across Australia and Asia, adding an estimated 3.4 bn USD to its revenue,” it says.
Michael Harvey, Senior Analyst – Dairy & Consumer Foods
Rabobank senior dairy analyst Michael Harvey said the global dairy industry continues to evolve through consolidation, specialisation, and a stronger focus on value creation with the combined turnover of the world’s 20 largest dairy companies rising by 5.4% in 2025 to USD 267 billion.
“Industry consolidation remains a key theme, with major transactions such as the Arla-DMK merger, FrieslandCampina’s merger with Milcobel, and Lactalis’ major acquisitions reinforcing the importance of scale and investment capacity,” he said.
“At the same time, dairy companies are increasingly focusing on areas where they can build market leadership. Fonterra is shifting toward ingredients and foodservice, while companies such as Froneri and Magnum reflect the growing importance of category-focused business models.
“Across the sector, growth is increasingly driven by higher-value segments, including nutrition, protein ingredients, specialty cheeses, and functional dairy products,”
The 2025 ranking also saw notable changes, Mr Harvey said, with DMK and Unilever exiting due to a merger and spin-off, respectively, making way for new entrants Magnum and Switzerland’s Emmi.
“Looking ahead, further changes are likely as consolidation continues and ambitious players such as Meiji and Royal A-ware pursue growth. While scale remains important, the industry's future leaders will be those that successfully combine size with innovation, differentiation, and value added product offerings.”
Fonterra drops from seventh to tenth
The report says Fonterra's strategic transformation took a major step forward with the divestment of its Mainland consumer business in Australia and Asia to Lactalis.
“The transaction removes a significant portion of Fonterra's consumer-facing operations, including well-known brands across Australia, New Zealand, and parts of Asia, while allowing the cooperative to sharpen its focus on higher-return ingredients and foodservice channels,” Mr Harvey said.
“The sale also provides additional financial flexibility and supports Fonterra's goal of maximizing returns to its farmer-owners rather than pursuing scale through consumer brands.
“The divestment has reduced Fonterra's standing in global dairy revenue rankings from seventh to tenth, but management believes a simpler portfolio will generate stronger profitability and more consistent returns as Fonterra’s farmgate milk price, its biggest cost, is linked to the revenue of the GDT auction, which is now a bigger share of its revenues.
“The cooperative retains significant advantages through its New Zealand milk pool, export network, and expertise in value-added dairy ingredients, positioning it as one of the world's leading dairy ingredient suppliers rather than a diversified consumer dairy company.”