USA – California Dairies has agreed to acquire the shares in DairyAmerica that it does not yet own from its other partners Agri-Mark and O-AT-KA milk products for an undisclosed sum, effective 1st January 2023.
With the acquisition, DairyAmerica, one of the largest skim milk powder suppliers in the world, will become a wholly-owned subsidiary of California Dairies.
The decision to make DairyAmerica a subsidiary is timely as the milk powder market growth is predicted to expand at a growth rate of 7.33% from 2021 to 2030, according to a research report published by Spherical Insights & Consulting.
In value terms, the Global Milk Powder Market Size which was valued at US$30 Billion in 2021 is expected to reach US$65.3 Billion by 2030, according to projections from the IMARC Group.
“The market for milk powder has been stimulated by the rising demand for sports nutrition items such nutrition bars and drinks, which is being driven by an increase in fitness awareness,” a report by Spherical Insights stated.
“The government of many countries has imposed strict regulations on the taxation, tariff structures, subsidies, and export/import of milk powder, which may have a negative impact on the financial security of milk powder manufacturers and restrict market expansion.”
Eyeing to have a greater share of this expanding market DairyAmerica is expected to continue to market milk powders produced by the previous owners, Agri-Mark and O-AT-KA Milk Products even under the new structure.
This according to CDI will allow the subsidiary to continue enjoying the multi-origin and sustainable supplying benefits.
The CEO and president of California Dairies, Brad Anderson said, “This investment in DairyAmerica provides the opportunity for CDI to unlock significant synergies and represents another step towards improving efficiencies in providing world markets with high-quality dairy ingredients”.
DairyAmerica will remain located in Fresno, California, under the continued reign of Patti Smith, Chief Executive Officer.
“As we continue to transform our business, this investment by California Dairies provides the framework to focus on our people and processes while strengthening our global competitiveness,” said Smith.
A member-owned milk marketing and processing cooperative, CDI produces roughly 40% of California’s milk and is co-owned by 300-plus dairy producers.
The dairy cooperative is home to both Challenge Butter and Danish Creamery, notable butter brands in the industry.