Lactalis to expand operations in Chicago market

USA – Lactalis, the global leading dairy manufacturer has announced its plans to expand in Chicago after a previous US$3.2 billion deal made in 2020 with Kraft Heinz Co. to acquire their cheese brands.

The expansion comes as Lactalis prepares to separate its supply chain and finance systems as part of the integration of Kraft brands including Cracker Barrel and Knudsen.

According to a report from the dairy giant, Lactalis is now hiring to build out those areas and expects to have about 220 employees in its Chicago offices by the end of the year bringing the division’s total workforce to 850.

“Hiring is still challenging in engineering, manufacturing and other technical areas, but we are confident to continue bringing in employees from firms that have decided to leave the city,” the report stated.

The French-based dairy giant has been growing its business within the U.S. in recent years, with America becoming its second-largest market.

Peter Cotter, Lactalis’ chief executive officer, said that the US is a much bigger country from a land-based standpoint than France is.

“The absolute growth opportunity that exists I think makes the US the perfect growth market for our products” Cotter added.

He added that Lactalis agreed to buy Kraft’s natural cheese business in 2020 and has since then completed the first phase of separation, which included sales, marketing, human resources, the commercial area and manufacturing.

Earlier this year, Lactalis reported a rise in its sales by 28.4% from US$24.18 billion to 28.3 US$30.95 billion in 2022, but higher costs had pushed its annual net profit down by 14% to US$418 million.

The dairy giant blamed Russia’s invasion of Ukraine for the spike in food prices that created tensions between food suppliers and retailers over pricing as governments try to curb inflation.

“Despite significant competitiveness efforts and faced with the difficulty of passing on an increase of more than 20% in its expenses, the group’s margins have been significantly eroded,” the French group said in a statement.

In March, the company fully exited its operations from the Argentinian market with the sale of its factory to a local cheese operator.

According to a Lactalis spokeswoman said the factory manufactures cheese for the B2B market and was part of an acquisition made in Mexico.

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