|SIC Codes:||2021 2022 2023 2024 2026|
|NAICS Codes:||311511 311512 311513 311514 311520|
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 Groupe Danone and Groupe Lactalis (France); Fonterra Co-operative Group (New Zealand); Koninklijke FrieslandCampina (the Netherlands); Meiji (Japan); and Nestlé (Switzerland).
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 85 percent of segment revenue.
Major product segments include fluid milk and milk products (about 35 percent of industry revenue); cheese (35 percent); dry and condensed milk products (15 percent); ice cream and frozen desserts (10 percent); and butter (less than 5 percent). Milk products include buttermilk, cream, cottage cheese, yogurt, and dairy substitutes, such as soy milk. Most companies specialize in only one product segment, although large companies may participate in several. Because of the perishable nature of much of the products, especially fluid milk, local production is the norm. Companies receive raw milk from local producers, process it, and distribute the products to local customers. Large companies own many local plants.Buy Now