Mutual Benefit: JVs with Foreign Dairy Companies on the Rise

February 2018 - Ben Laine

Key Points

  • Interest in the U.S. dairy market is accelerating with foreign dairy companies. These firms are seeking partners to own and operate processing plants that enable access to the growing milk supply and the value-added consumer market in the U.S.
  • While the U.S. has focused investment in the milk production sector of the dairy industry, other global players like the EU and New Zealand have been investing in dairy processing technology and product development.
  • These partnerships offer U.S. dairy companies cost and risk sharing, while tapping into the marketing and management expertise of their partners.
  • Dairy industry partnerships are most often vertically structured to include participants along the supply chain from milk producers downstream to branded distributors.
  • At least 15 percent of the U.S. milk supply is processed by plants that are at least partially foreign owned.
  • U.S. companies may look to the model of joint ventures as a method for international growth and participation to expand their own reach and compete for global market share, but should carefully consider the risks.

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