DSM acquires CSK to pursue international dairy opportunities

By Natasha Spencer

- Last updated on GMT

© Getty Images / pichet_w
© Getty Images / pichet_w

Related tags: Dsm, M&A

In a bid to pursue growth in the worldwide dairy industry, global science-based nutrition and health company, DSM, has purchased specialty dairy solutions provider Koninklijke CSK Food Enrichment C.V. (CSK).

Royal DSM has completed the acquisition of a 100% interest in flavor, texture and bio-preservation dairy specialist, CSK, for approximately $166 million (€150 million), the company announced on 30th December 2019.

Dairy remains DSM’s single largest segment within the food and beverage market. Through its latest acquisition, the company plans to build upon its food and beverage product portfolio, knowledge and expertise in growing worldwide markets and trends. It will apply specific focus on the taste, texture and bio-preservation solutions for semi-hard cheeses such as Dutch heritage cheeses Gouda and Edam.

Acquisition deal

As part of the 100% purchase of CSK, the transaction will see DSM use CSK’s Netherlands-based dairy application center and fermentation facility. To support its growth, DSM will also access CSK’s manufacturing network and supplier relationships. In 2018, CSK created net sales of $72 million (€65 million) with a total of approximately 180 employees.

Commenting on how its acquisition of CSK will support its dedication to the dairy industry through its nutrition businesses, Patrick Niels, DSM Food Specialties President, highlighted: “Today’s dairy needs are constantly changing, and DSM continues to invest in enabling customers to keep satisfying consumer demand, helping them grow their business, while we grow ours in line with our purpose-led, performance-driven strategy.”

“In DSM, we recognize the opportunity for CSK to make the leap forward that we were looking for. Our combined capabilities will accelerate our international growth ambition and enhance our innovative offerings to the dairy industry,”​ relayed Sanne Melles, CEO of Royal CSK.

Dairy Trends in 2020

The dairy alternative market is set to be a formidable strategic trend around the globe in 2020 and beyond. Alternative dairy proteins including oats, soy, rice and multiple options of nut-based dairy lead the segment. Vegan, hormone-free and lactose product options are also anticipated.

Global yogurt, desserts and drink expectations

In the short-term, brands and marketers will need to center their yogurt and dessert launches and promotion efforts on improving their sustainability commitments to resonate with target audiences, market intelligence provider, Mintel, revealed in 2019.

In the mid-term, dairy-based yogurt and dessert brands will need to focus on the appeal of dairy farming to ensure there are sufficient workers to meet the demand. However, as fat and sugar have entered into the ‘avoidance realm’ for many consumers, there is a chance the dairy may be next.

When it comes to the global dairy drink market, plant-based options have halted in growth, the market intelligence producer states. As a result, manufacturers are building their brand appeal to garner customers through flavor innovation and additional functionality.

Sustainability will be a key area for dairy producers to concentrate on, leveraging the impact of ethical and natural benefits. As interest in fermentation and probiotics is also on the rise, producers are likely to capture this functional trend in their product launches and marketing campaigns.

In the next five years, lab-grown milk and the possible reduction of the recommended daily allowance of dairy may create challenges, yet opportunities for novel innovations, for dairy brands to expand.

 

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