Dairy Products Manufacturing
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 large ones in local markets. However, economies of distribution favor large manufacturers. The industry is capital-intensive: average annual revenue per employee is about $760,000.
Opportunities
Higher-Margin Products - Profitability can be increased by more efficient production and distribution operations, or by creating products with higher profit margins. Large milk producers like Dean Foods...
Business Challenges
Consumer Milk Consumption Flat - Total consumption of fluid milk in the US has been flat for the past 10 years. Population increases have offset declines in per capita milk...