The future of dairy is shifting, with protein, nutrition and "functional products" set to drive the next wave of growth.

That is according to a new report today (Wednesday, August 26) from Rabobank which suggests that the global dairy sector is entering a new phrase which will be dominated by "consolidation, specialisation and a greater focus on value creation".

Rabobank today published its annual Global Dairy Top 20 report which ranks the financial performance of the world’s biggest dairy companies and co-operatives.

According to the bank the world’s 20 largest dairy companies increased their combined turnover by 5.4% to US$267 billion in 2025.

Lucas Fuess, senior dairy analyst at RaboResearch, said it is clear that "scale" is critically important to major global dairy players.

"Those that successfully combine size with innovation, differentiation, and value-added product offerings are likely to be best positioned for long-term success," he said.

According to Rabobank consolidation in the sector is likely to continue as dairy companies seek larger milk pools, stronger balance sheets, and greater investment capacity.

Global dairy leaders

The latest Global Dairy Top 20 report shows that Lactalis was the world’s largest dairy company in 2025, with dairy turnover exceeding US$40 billion.

Rabobank pointed to a series of acquisitions, which included Fonterra's Mainland Group consumer business in Australia and Asia and General Mills’ US yogurt business, which helped widen its lead over Nestle which came second in the Top 20 report.

In third place was Dairy Farmers of America, which had expanded its business through targeted investments in value-added processing, particularly in specialty cheese.

Glanbia had previously made an appearance in the Global Dairy Top 20 in 2023 but had then been ejected from the list just a year later.

According to Rabobank growth in the global sector is increasingly being driven by higher-value segments, including nutrition, protein ingredients, specialty cheeses, and functional dairy products.

It said that companies are investing in categories where they can build stronger market positions and "differentiate themselves from competitors".

Fuess said: "We are seeing several companies move toward more specialized business models, including Fonterra’s increasing focus on ingredients and foodservice, plus the rise of category-focused businesses such as ice cream specialists Magnum and Froneri.

"Future success will depend less on diversification and more on establishing leadership positions in targeted segments.”