Dairy Products Manufacturing
Brief Excerpt from Industry Overview Chapter:
Companies in this industry manufacture dairy-based products from raw and processed milk, along with dairy substitutes. Major companies include Dean Foods, Dairy Farmers of America, and Land O'Lakes (all based in the US), as well as Danone and Groupe Lactalis (France); Fonterra Co-operative Group (New Zealand); Koninklijke FrieslandCampina (the Netherlands); Meiji (Japan); and Nestlé (Switzerland).
Worldwide dairy product sales total about $500 billion, according to Global Industry Analysts. North America and Europe are the largest markets. India is the largest milk producer. Demand for milk and milk products is growing in developing nations in East and Southeast Asia due to rising incomes, population growth, and urbanization.
The US dairy products manufacturing industry includes about 1,100 companies that have combined annual revenue of about $112 billion.
Changes in consumer income drive demand for various types of dairy foods. The profitability of individual companies depends on efficient operations and marketing, as milk is a commodity product. There are few economies of scale in the manufacturing process, which is why small companies can effectively compete with large ones in local markets. However, economies of distribution favor large manufacturers. Many segments of the US dairy products industry are highly concentrated. The 50 largest fluid milk producers, for example, account for about 90% of segment revenue.
Because of the perishability of milk and many other dairy products, imports and exports are mainly cheeses. Imports make up about 2% of the US market. Major...
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