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 Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

Call Preparation 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

                                Recent Developments

                                Nov 10, 2022 - Incentive Programs Expands
                                • The US Department of Agriculture in October announced the expansion of the Healthy Fluid Milk Incentives Projects (HFMIP), a pilot program that provides a dollar-for-dollar match to participants in the Supplemental Nutrition Assistance Program (SNAP) when they purchase healthy fluid milk options at qualifying food retail outlets, Progressive Grocer reports. Fluid milk qualifying for the incentive program includes all varieties of pasteurized cow’s milk that (1) is without flavoring or sweeteners, (2) is consistent with the most recent dietary recommendations, (3) is packaged in liquid form, and (4) contains vitamins A and D at levels consistent with federal and local standards for fluid milk. Incentives range from an immediate percentage-off discount to a dollar-for-dollar match for a future milk purchase. The USDA awarded $3 million in funding to Auburn University’s Hunger Solutions Institute to expand the program to four more states and 116 stores.
                                • Natural cheese is the #2 dairy product category (behind milk), generating $16.4 billion in dollar sales in US multistore-outlets, a 2.7% year-over-year increase for the 52 weeks ending Sept. 4, 2022, according to Information Resources Inc. (IRI). Among natural cheese’s subcategories, which includes shredded, chunks, slices, string/stick, crumbled, ricotta, and cubed, shredded cheese is No. 1, garnering sales of $6.2 billion and a 2% YoY increase, while unit sales declined 2%, during the same timeframe, according to IRI data. Behind milk and natural cheese, the top ranked dairy categories per IRI are yogurt, ice cream/sherbet, and frozen novelties. Decades-high inflation is driving sales growth across all dairy product categories.
                                • Highly sweetened yogurt that’s currently marketed to consumers as “healthy” will lose that distinction under the Food and Drug Administration’s updated definition of the marketing term “healthy.” However, Greek yogurt, which is higher in fat but low in sugar, could qualify under the proposed rule. The FDA in September 2022 announced it is updating the marketing term "healthy" to reflect what has been learned about what makes a wholesome diet since 1994 when the agency last revisited the issue. The proposed FDA rule would align the definition of the "healthy" claim more closely with current nutrition science. The FDA also is researching a symbol that manufacturers could display on the front of packaging to show their product meets the updated definition of "healthy."
                                • Daily per capita consumption of fluid-milk is declining steeply as US dietary habits change. Data from the USDA-Economic Research Service shows a steady decline in US daily per capita consumption of fluid milk during each of the past seven decades. From 1990 and 2000 it decreased from 0.78 cup to 0.69 cup – an 11.5% decline. By 2010 it was 10.1% less than it had been in 2000. Compared with each of the previous six decades, US daily per-person fluid-milk consumption decreased at its fastest rate in the 2010s. In 2019 it was 20.7% less than in 2010. Despite government and industry efforts, about 90% of the US population doesn’t meet the Dietary Guidelines’ dairy recommendations. While US per capita cheese and yogurt consumption has more than tripled since 1970, per capita consumption of all dairy products peaked in 1987.
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