Cumberland Packing Competition
Now Viewing Cumberland Packing's competition in: Dairy Products Manufacture
Call Preparation Questions
Customers, Marketing, Pricing, Competition
What major customers does the company sell to? - Retail distributors, food service institutions, and food manufacturers are the three major types.
Does the company sell under its own brands or under private labels? - Private labels account for a large part of industry production.
Has the company changed its product mix in recent years? - In the past decade, fluid milk consumption has been down, cheese consumption up.
Who are the major competitors in the company's market? -
Does the company provide direct-store-delivery (DSD) for customers? - The ability to provide DSD has advantaged larger dairy companies.
How large a sales force does the company have? -
How is the company positioning itself to compete against the growing popularity of soy milk? - Sales of soy milk have been increasing in recent years.
Competitive Landscape
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 the large ones in local markets. The industry is capital-intensive: average annual revenue per employee is about $550,000.
Business Challenges
CRITICAL ISSUES
Consumer Milk Consumption Flat - Total consumption of fluid milk in the US has been flat for the past 10 years. Milk consumption per person decreased 20 percent, while consumption of some other dairy products increased. Each year, the average American consumer drinks 20 gallons of milk, compared to 50 gallons of soft drinks and 25 gallons of coffee.
Government Controls Raw Milk Prices - Because of state and federal support of dairy farmers, the price of raw milk is regulated, though not fixed. Regulation raises prices for consumers and reduces the incentive for dairy product manufacturers to control their major raw material cost by, for example, entering into fixed-price supply contracts. Manufacturers can't always pass along price increases.
Industries Where Cumberland Packing Competes
- Food
- Sugar & Sweeteners(primary)
- Dairy Products
- Flavorings, Spices & Other Ingredients
