- Dairibord captured 35% of the national milk production surge, increasing its intake to 20.3 million litres in H1 2025
- The company reported an 18% revenue growth to $64.32 million, primarily driven by robust sales in value-added products
- Government reforms, including significant reductions in fees and taxes, are expected to enhance operational efficiency and competitiveness in the dairy sector
Harare- Dairibord Zimbabwe Limited, the country's leading milk processor, reported a 3.2% increase in milk intake for the first half of 2025, rising from 19.6 million liters to 20.3 million liters. This growth aligns with a broader national trend, as Zimbabwe’s raw milk production, according to the Ministry of Lands, Agriculture, Water and Rural Development’s Dairy Services Unit, increased from 55.1 million liters to 57.3 million liters during the same period.
The modest uptick in milk production reflects gradual improvements in the dairy sector, driven by both market dynamics and supportive government policies.
The Zimbabwean government has introduced significant reforms to bolster the dairy industry, particularly through tax and fee reductions announced by the Ministry of Finance, Economic Development, and Investment Promotion in mid-September 2025. Key measures include reducing feed manufacturing registration fees from a range of $150–$250 to a flat $20, and lowering import permit fees for livestock genetics (heifers, bulls, and semen) from $100 to $20. Additionally, export registration fees for dairy products have been slashed from $900 to $10.
These reforms are designed to reduce operational costs, improve predictability, and encourage investment in dairy and feed production. By lowering the cost of importing high-quality breeding stock, the government aims to enhance herd productivity and milk yields, which could drive long-term growth in the sector.
The reduced export fees are particularly significant, as they position Zimbabwean dairy products to compete more effectively in regional markets, where demand for processed dairy is growing. These policies are expected to attract new entrants, foster competition, and benefit established players like Dairibord by creating a more conducive environment for expansion and operational efficiency.
During the first half, Dairibord reported an 18% revenue increase to $64.32 million, driven primarily by an 18% growth in sales volumes.
This growth was supported by Statutory Instrument 34 of 2025, which allowed pricing flexibility above the overvalued formal market rate, enabling Dairibord to capitalize on volume-driven revenue gains.
Product category performance varied, with the foods segment (notably yogurt and tomato sauce) growing by 18%, beverages surging by 28% (driven by strong sales of Pfuko and Cascade, alongside recoveries in tea due to improved supply), and liquid milk showing modest growth of 1%. The disparity in growth rates highlights consumer preferences shifting toward value-added products like beverages and foods, while liquid milk remains a stable but less dynamic segment.
However, not all metrics were positive. Dairibord’s export volumes declined slightly from 9% to 8% of total sales, reflecting challenges in penetrating external markets. Operating profit also fell by 28% to $2.76 million, largely due to the absence of prior-year monetary gains.
To address these challenges, Dairibord has adopted a cautious approach, intensifying risk management and hedging strategies to mitigate economic exposures. The company is installing a 1 MW solar plant at its Chipinge factory.
The company is also investing aggressively in replacing and refurbishing critical equipment to boost production capacity, positioning itself for growth in 2026 and beyond. These investments signal confidence in the long-term potential of the dairy sector, despite short-term economic headwinds.
However, Zimbabwe’s dairy sector operates within a broader regional and global context that influences its growth trajectory. In the Southern African Development Community (SADC) region, dairy demand is rising due to population growth, urbanisation, and increasing consumer preference for processed dairy products like yogurt and flavored milk.
However, regional competition is intensifying, with countries like South Africa and Zambia investing in modern dairy farming and processing technologies. Globally, milk production is projected to grow steadily, with the Food and Agriculture Organization (FAO) estimating a 1.6% annual increase in global milk output through 2030, driven by productivity gains in countries like India, Brazil, and the European Union.
The outlook for Zimbabwe’s dairy sector is cautiously optimistic, underpinned by government reforms and growing domestic demand. The easing of taxes and fees is expected to stimulate investment, improve herd quality, and enhance export competitiveness, potentially positioning Zimbabwe as a stronger player in the SADC dairy market. For Dairibord, the combination of volume-driven revenue growth and strategic investments in capacity expansion bodes well for capturing a larger share of this growing market.
Global trends
Globally, leading dairy processors are navigating a landscape marked by steady market expansion, with the overall dairy foods sector projected to grow from USD 1,005.84 billion in 2025 to USD 1,524.65 billion by 2032 at a CAGR of 6.12%, driven by rising demand for nutrient-rich, convenient products in emerging economies and a shift toward premium, health-oriented offerings in mature markets.
Companies like Nestlé, Danone, Fonterra, and Arla Foods exemplify adaptive strategies, emphasizing sustainability, digital innovation, and value-added product diversification to counter challenges such as volatile input costs, disease outbreaks (avian influenza), and competition from plant-based alternatives. These firms are prioritising higher-margin segments like fortified milks, functional yogurts, and protein-enriched cheeses, which align with consumer trends toward health, wellness, and environmental responsibility.
Nestlé, the world's largest dairy company by sales (valued at $20 billion in 2025 brand rankings), has maintained its top position for a decade through aggressive innovation in fortified and premium products. In Africa, where it operates extensively, Nestlé is leveraging digital tools for supply chain optimisation, including AI-driven farmer apps for real-time milk quality monitoring and predictive yield analytics, which have reduced waste by up to 15% in key markets like Kenya and Nigeria.
Globally, Nestlé's strategy focuses on strategic divestments of non-core assets and investments in R&D for "beauty-enhancing" dairy like collagen-infused yogurts, while expanding in emerging markets such as India with a $613 million commitment through 2025 to boost fortified milk production. This has resulted in single-digit dairy revenue growth in 2024-2025, outpacing the global average, though it faces stagnation in mature European markets due to softening demand for basic fluid milk.
Danone, ranked fourth globally with steady 4% turnover growth in 2025, is doubling down on health-focused innovations like high-protein and probiotic-rich products, including its Activia kefir line in the UK and expansions in ultra-filtered, low-sugar milks through partnerships like Fairlife (acquired by Coca-Cola, but with Danone's tech influence).
In Africa, Danone is investing in local sourcing and milk collection infrastructure, professionalising smallholder cooperatives in countries like Nigeria and Ghana to ensure reliable supply amid urbanization-driven demand surges. Its "One Planet. One Health" framework integrates sustainability, with goals for 100% regenerative agriculture sourcing by 2030, yielding margin improvements of 5-7% through cost efficiencies in feed and energy.
Challenges include nascent yogurt markets in West Africa, but strategic M&A, such as acquiring stakes in local processors, positions Danone for 6-8% CAGR in emerging regions.
Fonterra Co-operative Group, a New Zealand-based giant focused on ingredients and exports, reported 11.6% net sales growth in 2024 despite a 160,000-tonne dip in production volumes, driven by premium pricing for whole milk powder and butterfat components. Looking to 2025, Fonterra's strategy involves mergers, including a planned integration of its Australian and New Zealand operations and a potential sale of consumer brands to Lactalis, which could drop it to 10th in global rankings but free up capital for B2B expansions in dairy blends and fortified nutrition. Sustainability is core, with investments in biodiversity-focused farming that enhance soil health and reduce emissions by 20-30%, appealing to eco-conscious importers in Asia and the Middle East. In emerging markets, Fonterra is partnering on precision feeding tech, projecting farmer margin gains of 10-15% in 2025 amid firmer global commodity prices.
Arla Foods, a European cooperative powerhouse, traded places with Fonterra to sixth globally in 2025 but faces volume declines (4.3% drop in core brands like Arla and Lurpak) due to exiting producers and milk intake reductions. Its playbook emphasizes high-value brands and sustainability, with a €500 million annual investment in regenerative practices covering biodiversity and carbon reduction, positioning it as a leader in EU green compliance. A pending merger with DMK could elevate it to fourth place in 2026, enhancing market reach and BSI scores through broader sustainability credentials. Arla's focus on functional dairy, like protein-enriched cheeses, aligns with 2025 trends, supporting modest revenue stability despite European production declines.
These processors are outperforming peers by blending digital tools (AI for supply chains) with product innovation, achieving 5-10% annual growth in high-margin categories like fortified milks (projected CAGR of 8.2% to $226 billion by 2032). However, they contend with global headwinds: a 0.35% volume drop in milk supply contrasted by 1.65% gains in high-value components like butterfat, alongside risks from diseases and trade slowdowns in China.
The dairy industry's outlook through 2030-2034 is resilient yet transformative, with global milk production forecasted to rise 0.8% in 2025 and consumption of animal-source foods surging in middle-income regions like Asia and Africa due to urbanisation and affluence. Overall market value is expected to hit $1,505.8 billion by 2033 at a 4.75% CAGR, fueled by snacking trends, fortified nutrition for aging populations, and kefir/yogurt expansions (6.8% CAGR to $2.44 billion by 2027). Key drivers include regenerative agriculture (adopted by 22% of consumers prioritizing eco-friendly dairy) and tech like precision feeding, which could unlock $8 billion in opportunities via component optimization.
Dairibord, as Zimbabwe's dominant processor, can leverage its volume growth and government-backed reforms to expand regionally, mirroring global peers' focus on Africa’s untapped potential. The continent’s dairy market, currently at 5% of global production but with per capita consumption just 35 litres (vs. 100 globally), offers explosive growth via processing facilities and distribution networks in special economic zones (SEZs) like Chad’s La Zone Industrielle de Sarh, which incentivise agro-industrial investments with tax breaks and infrastructure support. East Africa stands out: Kenya’s formal processing intake is projected to hit 1 billion litres by 2025 (from 600 million), with opportunities in yogurt and camel milk via partnerships like those with Nuug Camel Milk, while Rwanda’s privatised Burera Dairy (acquired by a Zimbabwean firm) signals cross-border synergies for Dairibord in collection hubs and cooperatives.
In West and North Africa, nascent yogurt markets in Nigeria and Ghana present low-entry barriers for value-added products, bolstered by Danone/Nestlé models of digital farmer platforms for 10-20% yield boosts. South Africa offers mature stability, with projects like RSS Holdings’ dairy farm investments in the Northern Cape providing equity stakes in sustainable herds, aligning with Dairibord’s equipment refurbishments for export-oriented growth.
Beyond processing, Dairibord could invest in East Africa Dairy Development-style programs for smallholder equity ($8.3 million mobilised in Kenya/Uganda/Rwanda), or AI-enabled cold chains to tap $110 billion in regional imports by 2025. These moves could yield 9-10% returns, enhancing Dairibord’s hedging against local volatility while positioning it as a pan-African contender by 2030.
Looking to the future, the dairy market is projected to reach $1.5 trillion by 2030, growing at a 4.75% CAGR, with milk production expected to hit 248 billion pounds annually. Demand is fueled by population growth to 8.7 billion and rising consumption in middle-income countries like China and India. However, challenges include a potential 10.5 million-ton milk deficit by 2030 due to declining self-sufficiency in key exporters like the EU and New Zealand, compounded by climate pressures and labor shortages. Sustainability is a critical focus, with industry leaders targeting 38% reductions in Scope 1 and 2 emissions by 2030 through feed additives (cutting methane by 30%), regenerative agriculture, and biogas adoption.
Digital transformation is another cornerstone, with AI for predictive analytics, IoT in 80% of large farms by 2030, and cellular agriculture/precision fermentation producing "dairy-like" products with 40% fewer resources. The rise of hybrid dairy-plant products and a $41 billion plant-milk market by 2034 (6.6% CAGR) signals a shift, though traditional dairy is rebounding with "ethical" labeling. Consolidation through mergers and acquisitions, such as Arla-DMK or Fonterra’s sale of consumer brands to Lactalis, reflects a trend toward fewer but larger processors, with exports shifting to high-solids products like whey and lactose.
In Africa, the dairy market could reach $14 billion by 2028, growing at 8.6% CAGR, but requires significant infrastructure investment to capitalize on this potential.
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