Paris The history of the world’s largest dairy begins with 17 handcrafted Camembert cheeses. Company founder André Besnier is said to have created the product 90 years ago in the small town of Laval using milk from surrounding farms. At least that’s the founding myth of Lactalis, the food giant run by the third generation of the Bethnier family.
The reclusive owner built a global dairy and cheese empire in northwest France. As of 2021, Lactalis is the largest dairy company in the world. Products such as the core brand “President” are also within the range of most German supermarkets. Sales rose nearly 30 percent last year to 28.3 billion euros.
The family-owned company has overtaken Danone as the top of the French food industry and was recently among the top 10 food groups by sales. As a result, Lactalis is forming alliances with multinationals such as Nestle and Coca-Cola.
Rapid international growth was driven by Emmanuel Besnier, who took control of Lactalis as majority shareholder after the death of his father Michel Besnier in 2000. His siblings Jean-Michel and Marie hold the remaining shares. Financial news agency Bloomberg estimates that the Bernier family is worth around 14 billion euros.
The family has kept themselves and their entrepreneurial approach a secret. In the French press, Emmanuel Bernier has been described as an “invisible boss” and “France’s most secretive industrialist”. The lack of transparency has also drawn criticism, but as an owner-managed company, Lactalis has no informational obligations to shareholders.
The French entrepreneur turned Lactalis into a global company.
(Photo: AFP/Getty Images)
“The Besnier family is very cautious,” says Philippe Pelé-Clamour, a French family business expert at the HEC business school (Handelsblatt). He speaks of a “family culture of secrecy”, which is reflected in the fact that the owners have “retained their roots in the French countryside”. Even with global success, there is no reason for the company to move from the family headquarters in the Mayenne department to the La Défense business district in Paris.
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The characteristics of Lactalis are also reflected in the company’s management. Pelé-Clamour said Besnier personally selects his management team and bosses for each region of the world. “Unlike Danone or Nestlé, management is more decentralized.” In particular, many decision-making powers are delegated to regional heads. “What matters is the relationship of trust between the family and the local managers.”
During the first decades, the family business focused its development on France, when it was still called “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 builds a global company from an estate in a bold takeover strategy.
Since 2000, Lactalis sales have increased five-fold. The company has made about a hundred acquisitions, including the French takeover of Italian mozzarella maker Galbani, Dutch brand Leerdammer and part of the cheese business of U.S. Kraft Heinz. In 2011, Lactalis acquired a majority stake in Italian dairy giant Parmalat.
Lactalis looks to expand regional brand in Germany
In Germany, the group acquired large dairy company Omira from Ravensburg in 2017 and then the milk and fresh produce division of the Bayerische Milchindustrie cooperative in March 2022. Lactalis is now one of the largest dairy companies in the country. The company told Handelsblatt that it aims to “establish close and long-term partnerships 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 in its products since the 1980’s. The company said it now hopes to further expand the acquired regional brands such as Franconia and Thuringia.
This approach is part of the secret to Lactalis’ success: “Internationalization is mainly achieved through the purchase of local brands, allowing Lactalis to gain a foothold in the respective countries,” says expert Pelé-Clamour. Lactalis products are now sold in more than 150 countries and the group employs more than 85,000 people worldwide.
The brand is one of many acquisitions by Lactalis.
(Photo: imago/Schöning)
The market power of family businesses has also encountered headwinds. In the summer of 2016, farmers protested in front of the company’s Laval headquarters, accusing Lactalis of underpricing its milk. The group is currently under fire in France over rising prices for milk, cheese and yoghurt. The country’s wholesale and retail association believes that this is not only due to inflation, but also the “free rider effect”.
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Lactalis vehemently denies the allegation. The increase in sales was also due to inflation, the company said when it released its 2022 business figures in late April. However, net profit fell by 14 percent to 384 million euros due to higher costs compared with the previous year. “The group’s profit margins have fallen significantly,” it said.
As the company grows, it becomes more difficult for the owner’s family to stay out of the public eye. In early 2018, after years of silence, Emmanuel Besnier had to give newspaper interviews because of a scandal. Several babies fell ill after eating formula contaminated with salmonella from one of the group’s French factories.
Lactalis said it has recalled more than 12 million doses of the vaccine in more than 80 countries. At the time, Besnier promised compensation to affected families, while defending himself against allegations that Lactalis initially wanted to cover up the problem.
Still, the scandal has had legal consequences for the group: In February, the Paris prosecutor’s office filed a lawsuit for failure to recall products, fraud and negligence causing personal injury.
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