Müller Milch buys Landliebe: mega deal in the dairy industry

Later rise of Stefan Müller

The takeover is Stefan Müller’s first major deal since he replaced former Kuka boss Till Reuter at the top of the supervisory board in January. The eldest son of patriarch Theo Müller sees the acquisition as a “very suitable addition” and hopes for a “positive contribution to the company’s growth course”.

For a long time it was anything but certain that the 54-year-old would one day succeed his powerful father. Theo Müller, who has lived in Switzerland for a long time, no longer has a formal role in the company. However, the 82-year-old with many children is the main owner of the group, which is based in Luxembourg.

Stefan Müller had worked in his father’s company since the late 1990s. In Leppersdorf, Saxony, he managed the largest and most modern production site of the dairy group for many years. The son was also a member of the central management of the group.

But a few years ago he suddenly left his father’s company, the exact circumstances were not known. Stefan Müller then remained loyal to milk – as managing director of Colostrum Biotec in Königsbrunn. The company produces nutritional supplements from colostrum, the first highly nutritious milk a cow gives after calving.

The edgy doer Theo Müller could hardly let go of power. With a lot of vigor and skill, he had built up his father’s village dairy with four employees since 1971 into a successful international group. Through acquisitions, the number of employees grew to 31,700 today. With TV advertising featuring soccer star Gerd Müller and the slogan “Everything Müller, oder was?” he turned Müller Milch from a local to a nationally known brand.

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But not everything went smoothly. The company withdrew from the US market in 2015 after only three years. The purchased, ailing restaurant chain Nordsee was sold in autumn 2018. The dairy subsidiary in Great Britain had to be restructured. In the head office, the managers gave each other the handle.

Return of the Prodigal Son

On his 80th birthday two years ago, the patriarch surprisingly remembered his family roots and handed over his seat on the supervisory board to his eldest son. “I’m glad that Stefan is back,” commented the press-shy Theo Müller on the return.

Since then, son Stefan has replaced numerous managers in key positions. The unprofitable division of delicatessen salads Homann including the brand was sold to the Dutch salad manufacturer Signature Foods a year ago. The main plant in Dissen with 400 employees was closed. In 2021, Müller Milch also introduced vegan products for the first time, much later than the competition, but successfully. With the acquisition of the Friesland Campina brands, Stefan Müller is now making a further statement.

In the 1990s, the Dutch took over the Südmilch dairy, which had become insolvent following the purchase of Sachsenmilch. Other brands and milk plants, for example in Cologne, were added. In recent years, however, the business has been characterized by declining sales, job cuts and conversions. “Friesland Campina is logically ending its years of renovation attempts with the sale,” says industry expert Jonczyk.

“The market position and profitability of Friesland Campina in Germany has been significantly improved in recent years through targeted measures,” Roel van Neerbos, President of Friesland Campina Food & Beverage, alludes to the difficult situation. He is convinced that under the umbrella of the Theo Müller Group, the business can be further expanded through synergy advantages. In Germany, the Dutch want to concentrate on selling their international brands such as Valess meat substitutes, Chocomel cocoa milk and cheese brands such as Frico and spray cream.

Milk prices are rising sharply

The dairy industry is one of the largest food industries in Germany. According to the Federal Statistical Office, it achieved sales of around 29 billion euros in 2021. Almost a third of this is generated abroad.

However, the German dairy industry is going through turbulent times. German dairy farmers supply less raw milk because the costs for feed and energy have risen sharply. Meanwhile, global demand for dairy products has increased significantly. The prices for milk and butter have risen massively since the Ukraine war, not least due to panic buying. Dairy products cost an average of 18 percent more in May than in the previous year.

“Consumers’ current reluctance to buy and price sensitivity as a result of persistent inflation is strengthening private labels,” observes market expert Jonczyk. This is forcing brand manufacturers to increasingly offer special offers, which in turn has a negative impact on earnings. It will be seen to what extent Müller can lead Friesland Campina’s crisis-ridden business back to growth and earnings in the current turbulent times in the dairy industry. The decisive factor here is the exploitation of synergies. “It remains to be seen to what extent all locations can remain in place in the long term,” says the milk expert.

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