Hochwald Foods Opens USD 208 million Dairy Facility in Germany

Hochwald Foods, Germany's third-largest dairy company, has opened a €200 million (US$207.79 million) facility in Mechernich, dubbed the "dairy plant of the future." The plant, which began construction three years ago, has 60,000 square metres of floor space and 17 different bottling lines.

Furthermore, the company stated that the possibility of adding bottling plants to the operation has taken into account future growth and the increased capacity that this would necessitate.

Hochwald revealed that when fully operational, it will convert 800 million kilogrammes of raw milk per year into 1.4 billion packages of value-added products such as long-life milk, long-life cream, long-life milkshakes, and condensed milk.

According to the German dairy, all processes are "perfectly matched" and "extensively" automated and digitalized, setting new standards. "We set our strategic direction in line with the current and future requirements of the market five years ago," said CEO Detlef Lat.

A key component of this was the construction of a highly efficient and future-oriented plant, which we are now inaugurating. According to Thorsten Oberschmidt, CFO at Hochwald, because the facility was built on a greenfield site, it faced both an "advantage" and a "challenge."

The advantage is that the responsible people could perfectly visualize the resource flows in the new buildings. The challenge was that, with such an investment, Hochwald wanted to retain some flexibility for future market developments.

The facility's investment and commissioning come at a time when the German dairy industry is poised for growth due to rising disposable incomes, an aging population, and increased health consciousness.

Additionally, increasing product diversification, rising consumer demand, and rising demand for organic products will drive growth. Expert Market Research forecasts that the dairy market in Germany, which was worth approximately US$25.5 billion in 2020, will grow at a CAGR of 0.9 percent from 2022 to 2027.

According to the market research firm, the dairy market growth in Germany is being driven primarily by rising consumer health consciousness, which is leading to increased demand for healthier dairy products such as unprocessed cheese.

Soft cheese and other protein-rich dairy products are also growing in the country due to decreased meat consumption in the region, and the market is expected to be driven by rising demand for organic and GMO-free dairy products in the coming years, according to the firm.