Chinese dairy companies Yili and Mengniu - both of which will soon have factories in New Zealand - now rate among the top 15 of the world's biggest dairy companies in terms of turnover, rural lending specialist Rabobank said.
Rabobank said Yili is now ranked at 12th, up from 15th last year, while Mengniu went to 15th from 16th.
Yili has plans to manufacture in South Canterbury while Yashili - which is in the throes of being taken over by Mengniu - is building a factory at Pokeno, on the southern outskirts of Auckland.
The top five rankings - with Fonterra at number four - remained unchanged from last year.
Nestlé extended its lead at the top of the table, with organic growth and the purchase of Pfizer's infant nutrition business contributing to 23 per cent to revenue growth in dairy sales.
Danone and Lactalis, both of France, were second and third, respectively, followed by Fonterra and then the Netherlands' Friesland Compina at fifth.
Almost all of the top-20 felt the stiff headwinds of a slow global economy, recession in Europe and maturing western dairy markets in 2012, Rabobank said, and at least six companies saw their dairy revenues decline in local currency terms. China's big dairy companies did not enter the top 20 until 2008, Rabobank analyst Tim Hunt said in a commentary.
"Slowing organic growth potential is placing more pressure on companies to consolidate local industries and to seek growth via acquisition, contributing to the flurry of recent activity in the top-20," Hunt said.
Companies were also actively positioning themselves to access stronger growth markets abroad.
"The Chinese government's desire for domestic consolidation and vertical integration, together with local market growth, will almost certainly underpin further growth of the Chinese giants Yili and Mengniu," Hunt said.
In contrast, a combination of confinement to the domestic market and a lack of sizeable acquisitions has seen the rankings of US companies decline in recent years, he said.
America's Kraft slipped seven places following the split of its US grocery business from Mondelez, while Dairy Farmers of America saw sales decline in 2012.
Hunt said it was possible that the US giants would be pushed further down the list in coming years.
"Size should not be a goal in itself, and US companies can participate in growth offshore by developing their export businesses,'' he said.
"However, with much of the growth opportunities in dairy likely to come outside of the US in coming years, US companies will need to think about whether being an unaligned exporter with no offshore footing will be enough to secure a fair share of the growth and value available in coming years," he said.
Yashili is based in Chaozhou, Guangdong province. In June, China Mengniu Dairy Co Ltd signed a takeover deal to buy Yashili.
Meanwhile Yili, whose full name is Inner Mongolia Yili Industrial Group - has started construction of a $214 million infant formula plant at Glenavy, in South Canterbury.