Paris The history of the world’s largest dairy begins with 17 handmade camemberts. Company founder André Besnier is said to have made this 90 years ago in the small town of Laval from milk from surrounding farms. At least that is the founding myth of the food giant Lactalis, which is managed by the third generation of the Besnier family.
The reclusive owners have built a global dairy and cheese empire in north-west France. As of 2021, Lactalis is the largest dairy in the world. The products, such as the core brand “Président”, are also part of the range in most German supermarkets. Last year sales climbed by almost 30 percent to 28.3 billion euros.
The family business replaced Danone at the top of the French food industry and recently became one of the ten food groups with the highest sales. Lactalis is thus playing in a league with global corporations such as Nestlé and Coca-Cola.
Rapid international growth was driven by Emmanuel Besnier, who took control of Lactalis as the majority shareholder after the death of his father, Michel Besnier, in 2000. His siblings Jean-Michel and Marie hold the remaining shares. The financial news agency Bloomberg estimates the assets of the Besniers to be around 14 billion euros.
The family keeps a secret about themselves and their entrepreneurial approach. In the French media, Emmanuel Besnier is described as the “invisible boss” and “the most secretive industrialist in France”. The lack of transparency also causes criticism, but as an owner-managed company, Lactalis has no information obligations towards shareholders.
The French entrepreneur has turned Lactalis into a global corporation.
(Photo: AFP/Getty Images)
“The Besnier family acts very discreetly,” says Philippe Pelé-Clamour, an expert on French family businesses at the HEC business school, the Handelsblatt. He speaks of a “family culture of secrecy”, which is also reflected in the fact that the owners have “preserved their roots in rural France”. Even the worldwide success is no reason for the company to relocate from the family headquarters in the Mayenne department to the Paris business district of La Défense.
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The special features of Lactalis are also reflected in the company management. Pelé-Clamour says that Besnier personally chooses his management team and the bosses for the various regions of the world. “Unlike at Danone or Nestlé, the management is more decentralized.” A lot of decision-making power is delegated to the regional heads in particular. “What counts is the relationship of trust between the family and the local managers.”
In the first decades, the family company focused its growth on France, at that time still as “Société Laitière de Laval”. Since the 1980s, Michel Besnier has increasingly invested abroad and in 1999 gave the company the more international-sounding name Lactalis. Son Emmanuel formed a global corporation from the inheritance with a bold takeover strategy.
Lactalis sales have quintupled since 2000. The company made around a hundred acquisitions, including the French takeover of the Italian mozzarella manufacturer Galbani, the Dutch brand Leerdammer and part of the cheese business of the US group Kraft Heinz. In 2011, Lactalis acquired a majority stake in Italian dairy giant Parmalat.
Lactalis wants to expand regional brands in Germany
In Germany, the group acquired the large dairy Omira from Ravensburg in 2017 and then in March 2022 the milk and fresh produce division of the Bayerische Milchindustrie cooperative. Lactalis is now one of the largest dairy companies in this country. The company told the Handelsblatt that it is aiming for “a close and long-term partnership with manufacturers in southern Germany”.
Group-wide, Germany is the eighth most important market with a turnover of 1.2 billion euros. Lactalis has been present with its products since the 1980s. Now they want to further expand the acquired regional brands such as Franconia and Thuringia, the company said.
This approach is part of Lactalis’ recipe for success: “The internationalization was mainly achieved through the purchase of local brands, which enabled Lactalis to gain a foothold in the respective countries,” says the expert Pelé-Clamour. Lactalis products are now sold in more than 150 countries, and the group has over 85,000 employees worldwide.
The brand is one of Lactalis’ many acquisitions.
(Photo: imago/Schöning)
The market power of the family business also encounters resistance. In the summer of 2016, farmers protested in front of the company’s headquarters in Laval, accusing Lactalis of having too low purchase prices for their milk. The group is currently being criticized in France for the rise in prices for milk, cheese and yoghurt. The country’s wholesale and retail association assumes that this is not only due to inflation, but also to “free-rider effects”.
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Lactalis firmly rejects the allegation. When the company presented its business figures for 2022 at the end of April, it stated that the increased sales were also due to inflation. However, due to the higher costs compared to the previous year, net profit fell by 14 percent to 384 million euros. “The group’s margins have declined significantly,” it said.
As the company grows, it becomes more difficult for the owning family to stay out of the public eye. At the beginning of 2018, after years of silence, Emmanuel Besnier felt compelled to give a newspaper interview due to a scandal. Several babies fell ill after consuming milk powder contaminated with salmonella from one of the group’s French plants.
Lactalis says it has recalled more than 12 million doses in over 80 countries. At the time, Besnier promised the affected families compensation, but at the same time defended itself against allegations that Lactalis initially wanted to cover up the problems.
Nevertheless, the scandal has a legal aftermath for the group: In February, the public prosecutor’s office in Paris initiated proceedings for failure to recall products, fraud and negligent bodily harm.
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