Dairy Product Manufacturers

Industry Profile Report

Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters

Industry Overview Industry Structure, How Firms Opertate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

Call Preparation Quarterly Insight, Call Prep Questions, Industry Terms, and Weblinks.

Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.

Industry Profile Excerpts

Industry Overview

The 1,200 dairy product manufacturers in the US produce dairy products from raw milk, processed milk, and dairy substitutes. Fluid milk products include milk of varying fat content, milk substitutes, cream, cottage cheese, sour cream, and yogurt. Other major product categories are cheese and cheese-substitute products; dry, condensed, and evaporated products; creamery butter; and ice cream and frozen dessert products.

Food Safety Compliance

Dairy foods are among the most regulated foods in the US, due to the fact that raw milk can contain any number of dangerous pathogenic organisms.

Lower Milk Consumption

Per capita consumption of fluid milk in the US has been falling for decades.

Industry size & Structure

The average dairy product manufacturer has about 122 employees, operates at 1-2 locations and generates $98 million in annual revenue.

    • The industry consists of about 1,200 companies employing 152,100 workers and generating $122 billion in annual revenue.
    • There are about 260 fluid milk processors employing about 54,500 workers.
    • There about 415 cheese manufacturers with 52,900 employees.
    • The 390 ice cream and frozen dessert manufacturers in the US employ about 21,400 workers.
    • The dairy product manufacturing industry is highly concentrated - the top 20 companies account for 51% of industry revenue.
    • Large US dairy product manufacturers include Nestle USA, Dean Foods, Schreiber Foods, Land O'Lakes, and Kraft Heinz Foods.
                                Industry Forecast
                                Dairy Product Manufacturers Industry Growth
                                Source: Vertical IQ and Inforum

                                Coronavirus Update

                                May 4, 2022 - Cultured Dairy Sales Tumble
                                • Sales of three major categories of cultured dairy products – cream cheese/cream cheese spread, cottage cheese, and sour cream – all posted dollar and unit sales declines for the 52 weeks ending February 20, according to data from market research firm IRI. Cream cheese sales dropped 3.2%, while sales of cottage cheese and sour cream declined by 5.4% and 5.7%, respectively. Only two categories of cultured dairy products – kefir and yogurt – posted positive results for the period, with sales up 2.1% and 4.3%, respectively. Strong sales comparisons for cultured dairy products in 2021 likely reflected the fact that consumers were eating more meals at home, while the recent decline suggests a return to more eating out as the pandemic wanes.
                                • Mayor Eric Adams will allow New York City public schools – the nation’s largest public school system – to continue to serve low-fat and fat-free flavored milk with school meals. The mayor, who follows a mostly vegan diet, had proposed banning chocolate milk from school meals. Instead, the mayor’s administration is honoring a longstanding city government policy that allows individual schools to determine the types of milk they will serve with meals as long as the milk options are consistent with standards from the US Department of Agriculture (USDA). Adams’ decision, announced in mid-April, followed lobbying by the International Dairy Foods Association and other dairy organizations, as well as proposed legislation by members of Congress, led by NY state lawmakers. New York is one of the nation’s top five milk-producing states.
                                • Yogurt manufacturers will wait for FDA rulings on some of provisions of the June 2021 final ruling from the Federal Register on what constitutes “yogurt”, “low-fat” and “nonfat.” FDA is reviewing the ruling based on objects filed by the International Dairy Foods Association and yogurt manufacturer, Chobani. Objections revolve around acidity levels, milkfat volume, pasteurized cream culturing, exclusion of ultrafiltered milk, sweetener limits, and vitamin D requirements. Unless disputed, the other requirements under the ruling will take affect at the start of 2024.
                                • Adding plant-based proteins into dairy products gives the industry opportunities to tap into trends, reach new markets, and add functional characteristics, according to Prateek Sharma from the Institute of Food Technologists’ Dairy Foods Division. The global market for plant-based dairy alternatives is growing about 13.3% annually and is expected to approach $54 billion by 2028. Combining dairy and plant alternatives like soy, nuts (almond, hazelnut), grains (oat, rice), flax and hemp provides the texture of milk with the nutrients of plants. Plant ingredients can yield cheeses with softer texture, greater meltability, and new flavors.
                                • In late March 2022, the Dairy Farmers of America (DFA), a national dairy cooperative of family farmers, reported its 2021 financial results. Net income rose 16.4% from a year earlier and net sales were up 8.1%. Sales growth was due in part to milk prices rising to $18.37 per hundredweight compared to $17.79 in 2020. DFA represents about 29% of US milk production in the US. Farmers in the cooperative received a cash distribution of $47 million in capital retirements and $24 million in cash dividends. Despite supply chain disruptions, DFA exported products to over 200 customers in 60 countries.
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