Lactalis encounters profit challenges amid shifting consumer behavior

FRANCE – Lactalis, a global dairy company, has reported profit headwinds in the past year, despite a notable 4.3% increase in turnover to €29.5 billion (US$31.4 billion) in 2023.

The company reported a “weak” performance in consolidated net profit, reaching €428 million.

While this represented an 11% increase from the previous year, it fell short of expectations, with profit standing at €384 million in fiscal 2022, marking a 14% year-on-year decline.

Attributing these challenges to shifting consumer preferences and increased pressure from private label products, particularly in Europe, Lactalis noted changing consumer buying patterns, resulting in decreased sales volumes.

However, the company emphasized the resilience of its products, thanks to their quality and affordability, which sustained demand amidst the evolving market landscape.

Despite the profit setback, Lactalis managed to increase its profit margin from 1.36% to 1.45% compared to 2022, driven by organic growth and a strengthened presence in North America.

Chairman Emmanuel Besnier underscored the company’s commitment to achieving profitable and responsible growth, despite inflationary pressures and unfavorable global market conditions.

Lactalis intensified its efforts to innovate and offer high-quality dairy products at competitive prices, reflecting its dedication to consumer satisfaction and future sustainability.

In addition to operational challenges, Lactalis faced regulatory scrutiny and market disruptions in various regions.

Nevertheless, the company persisted in its strategic expansion, including acquisitions in Canada and Portugal, while maintaining a focus on debt reduction and environmental sustainability.

Reaffirming its leadership in the dairy industry, Lactalis identified France as its largest market, followed by the US, Canada, Italy, and Brazil.

With a workforce exceeding 85,500 employees worldwide, Lactalis remains committed to navigating challenges and seizing opportunities for growth and innovation in the dynamic dairy market landscape.

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