Rainbow Milk can be here 60 years and more

A cheery can of Rainbow milk is a brand most UAE residents will be familiar with. But what's the history of the company behind this product, which corners 80 per cent of the UAE sales of evaporated milk?

Bas Roelofs, FrieslandCampina ME’s managing director, takes ‘the long-term view of the Middle East’. Pawan Singh / The National
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It was a proud moment for new resident Bas Roelofs when he and his family discovered antique tins of Rainbow Milk prominently displayed at Dubai Museum.

For Mr Roelofs is the incoming regional managing director of Rainbow’s parent dairy company, FrieslandCampina, and a cheery can of Rainbow Milk is something every UAE resident will recognise.

It has been a key ingredient in a milky cup of karak chai for the past 60 years and was a staple in the Bedouins’ nomadic larder, as well as in tea shops, canteens and cafes across the country today.

Mr Roelofs joined the company in 2011 from Procter & Gamble, having spent 13 years in commerce and management roles across Europe and Africa – an unusual choice for a man with a master’s degree in applied physics.

But he says it was not “such a strange move” as it would appear on paper. “Hard-core engineering would not have given me the same intellectual challenge or tangible results as fast-moving consumer goods,” he says.

The FrieslandCampina dairy was set up by farmers in the Netherlands in 1872, to collect and market their milk – and guarantee a sale before it was spoiled. Today it has nearly 20,000 members – many in the fifth generation of their family who belong to the group.

As partners in, and owners of, one of the biggest dairy cooperatives in the world, all of them receive a guaranteed sale price for their milk.

Friesland Foods merged with Campina in 2009 to become Royal FrieslandCampina, exporting to 100 countries, from Nigeria to China and Mexico to Indonesia. FrieslandCampina Middle East is its regional subsidiary for the GCC and Levant.

Apart from Rainbow evaporated long-life, condensed milk and powder, the company produces Frico cheeses and Friso baby and infant food. Both are relatively new to the region: Friso launched in Saudi Arabia three years ago while Frico was available but not actively marketed until recently.

Elsewhere, the cooperative also manages brands such as Dutch Lady in Asia, Yazoo milkshakes in the UK and Optimel yogurts and drinks in Europe.

But while there are herds of cows at local dairy farms in Abu Dhabi, Dubai and Al Ain, FrieslandCampina has just one factory in the Gulf, in Jeddah, where dehydrated milk powder is shipped in and turned into long-life milk.

All other products are made in the “lush grasslands” of Europe, as Mr Roelofs says. “The region has an affinity to dairy but needs to import it because of the challenges, regionally, of water,” he says. “Europe has plenty of water and plenty of cows. But fresh milk is not easy to transport long distance. This way, we keep the highest quality and nutrition.”

Rainbow corners the evaporated milk market, with 80 per cent of UAE sales and sitting in the top three in every country in the region. Long-life milk and milk powder sales are “more humble” while Frico cheese, Mr Roelofs, admits, is still “niche” but shows promising, “high double-digit” growth.

FrieslandCampina Middle East moved its headquarters from Jeddah to Dubai’s Jumeirah Lake Towers five years ago, with 70 people employed locally to “do justice” to its strong presence here.

The dairy business in the UAE was worth about $1.3bn last year (about a quarter of the GCC market’s value), according to Euromonitor, but will grow to $1.8bn by 2020.

The global footprint of dairy consumption and exports is changing fast.

While Europe is the biggest exporter of dairy, producing 166 million tonnes a year, it will be overtaken by India by 2025, says the UN’s Food and Agriculture Organisation.

Per-capita consumption of milk and milk products is five times higher in developed areas today, such as North America, Australia and Europe, than in Asia and Africa, at about 150kg and 30kg respectively each year.

But the agency says the gap is narrowing and dairy demand growing in the Middle East and Asia, thanks to a changing diet, urbanisation, population growth and rising incomes.

This is why, Mr Roelofs says, FrieslandCampina “explicitly” mentioned the Middle East (a net importer of dairy) as a growth area in the 2020 road map it developed back in 2009 – and has since “fast-tracked” its regional plans.

While the GCC’s 40 million population represents just 0.6 per cent of the world’s, he says it is “punching above its weight”.

“We are a dairy cooperative from generation to generation: we don’t look for a one-year or two-year goal. We take the long-term view on the Middle East – we think we will be here another 60 years and more. We are here for the future and it helps if you are on the ground, because then you can tap into the opportunities.”

business@thenational.ae

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