Going sour: Pressure on the industry regarding sugar levels has constrained revenue growth

Operators in the Yoghurt and Other Dairy Product Processing industry manufacture products such as yoghurt, powdered milk, whey and lactose. Changing tastes among consumers have caused volatility in industry revenue over the past five years, which is expected to fall at a compound annual rate of 4.6% over the five years through 2019-20. Industry profitability has also shown year-on-year volatility due to fluctuating farm-gate milk prices and cost pressures from downstream supermarkets. Industry revenue is expected to grow by 0.2% in the current year to reach £903.6 million, as producers adapt product ranges in line with changing consumer demands while also benefiting from increased demand from supermarkets and real household disposable income...read more.

Industry Statistics & Market Size
Revenue
£903.6m
Annual Growth 15-20
-4.6%
Forecast Growth 20-25
Profit
Employment
3,839
Businesses
95

Industry Threats & Opportunities

  • Operators have launched new products to cater to changing consumer preferences
  • Fluctuations in milk prices tend to have a greater impact on smaller firms
  • Firms are likely to reformulate and remarket products to reduce sugar levels
  • Industry Report - Industry Analysis Chapter

    The Yoghurt and Other Dairy Product Processing industry has faced a number of difficulties in recent years that have led to volatile revenue and profitability. Revenue is forecast to fall at a compound annual rate of 4.6% over the five years through 2019-20, though revenue is expected to grow by 0.2% in the current year to £903.6 million. The industry has been greatly affected by changing consumer tastes over the past five-year period. Traditional sugar-rich flavoured yoghurts have fallen out of favour, while low-fat, plain and health-focused yoghurts have grown in popularity. Changing market trends have offered opportunities for new firms to capitalise on niches, and the number of enterprises in the industry is expected to grow at a compound annual rate of 0.3% o...purchase to read more.

    Additional Insights for the Yoghurt & Other Dairy Product Processing Industry

    IBISWorld identifies 250 Key Success Factors for a business.The most important for the Yoghurt & Other Dairy Product Processing Industry are

  • Access to high quality inputs
  • Having a wide and expanding product range
  • Access to niche markets
  • IBISWorld analysts also discuss how external factors such as Demand from supermarkets and Domestic price of milk in the Yoghurt & Other Dairy Product Processing industry impact industry performance..

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    What's in this report

    What is the Yoghurt & Other Dairy Product Processing Industry?

    This industry covers the production of fermented milk-based products other than liquid milk, cream, butter and cheese. Yoghurt, creme fraiche, sour cream, milk-based soft drinks, yoghurt drinks, powdered milk, whey, casein, rennet and lactose are all included. Products from a non-dairy source are excluded, as are foods serving a specific nutritional purpose, such as infant milk formula and whey-based protein supplements.

    Industry Products
  • Flavoured yoghurt
  • Plain yoghurt
  • Whey
  • Milk powder
  • Industry Activities
  • Yoghurt production
  • Sour cream and creme fraiche processing
  • Milk-based drink production
  • Powdered milk production
  • Whey product processing
  • Casein, rennet and lactose processing
  • Condensed and evaporated milk production
  • Table of Contents

    Industry Definition
    Main Activities
    Similar Industries
    Additional Resources
    Industry Statistics Snapshot
    Industry Structure
    Executive Summary
    Executive Summary
    Key External Drivers
  • Demand from supermarkets
  • Domestic price of milk
  • Health consciousness
  • Real household disposable income
  • Real effective exchange rate

  • Current Performance
  • Healthy demand
  • Milking profit
  • A global market
  • Chart: Revenue Growth

  • Industry Outlook
  • A changing culture
  • Fine margins
  • Table: Yoghurt & Other Dairy Product Processing Industry Revenue Outlook

  • Industry Life Cycle
  • Life cycle reasons
  • Chart: Benchmarking - Yoghurt & Other Dairy Product Processing Industry Lifecycle vs The Economy

  • Supply Chains
    Key Buying Industries
  • Ice Cream Production
  • Chocolate & Confectionery Production
  • Dairy Product, Egg & Edible Oil Wholesaling
  • Supermarkets

  • Key Selling Industries
  • Dairy Cattle Raising
  • Milk & Cream Production
  • Sugar Production
  • Yoghurt & Other Dairy Product Processing

  • Products & Services
  • Flavoured yoghurt
  • Milk powder
  • Plain yoghurt
  • Whey
  • Other
  • Chart: Yoghurt & Other Dairy Product Processing Industry Products and Services Segmentation

  • Demand Determinants
    Major Markets
  • Retailers
  • Food manufacturers
  • Food-service firms
  • Wholesalers
  • Chart: Major Market Segmentation for the Yoghurt & Other Dairy Product Processing Industry

  • International Trade
    Business Locations
    Chart: Business Locations by State
    Market Share Concentration
    Key Success Factors
    Cost Structure Benchmarks
    ProfitLarger firms in the industry typically have easier access to inputs and a higher level of technological investment, meaning that these processors have a lower per-unit cost of production and higher profit margins. On average, profit is estimated to account for 6.3% of industry revenue in 2019-20, having increased over the past five years. Profitability has been linked to the domestic price of milk. Average profit was low at the start of the past five-year period as the price of milk collapsed, causing pressure to reduce unit prices. As the price of milk rose in the latter half of the period, firms were able to increase their prices and margins. Rising sales of luxury and organic products also contributed towards a higher profit margin. However, supermarket price wars have continued to put pressure on industry margins. PurchasesPurchasing ingredients is the biggest cost for industry manufacturers and is estimated to absorb 65.5% of revenue in 2019-20. Milk is a key ingredient in the production process and its price is highly dependent on supply conditions and global economic factors. Farm-gate milk prices started tumbling in the base year because of a continuing imbalance between the supply of milk from farms and demand for dairy products. The end of EU milk quotas also encouraged oversupply and lower prices in 2015-16. However, prices increased sharply in 2017-18, regaining much of its value compared to the base year. Milk prices are expected to increase slightly in 2019-20, however, they are forecast to remain lower than in 2014-15. Despite this, the fall in the value of the pound is expected to have sharply increased the cost of many other inputs into industry products, therefore, purchases are forecast to account for a slightly higher proportion of revenue than over the previous five years. WagesDepreciationUtilitiesUtility costs are estimated to account for 2% of industry revenue in 2019-20. This is expected to have come down slightly over the previous five years, as the industry continues to invest in more efficient equipment. RentRenting premises accounts for a negligible share of revenue since most operators tend to own factories, which are often located in low-cost areas. Rent costs are expected to account for just 1.5% of revenue in the current year. MarketingOther
  • Chart: Cost Structure Benchmarking – Sector vs Yoghurt & Other Dairy Product Processing

  • Basis of Competition
    Internal competitionExternal competition
    Barriers to Entry
  • Table: Barrier to Entry Checklist for the Yoghurt & Other Dairy Product Processing Industry

  • Industry Globalization
    Muller UK & Ireland Group LLP, Yeo Valley Farms (Production) Ltd, Lactalis Nestle Chilled Dairy Company Ltd,
  • Table: Muller UK & Ireland Group LLP - financial performance
  • Table: Yeo Valley Farms (Production) Ltd - financial performance
  • Table: Lactalis Nestle Chilled Dairy Company Ltd - financial performance

  • Capital Intensity
  • Chart: Level of Capital Intensity for the Yoghurt & Other Dairy Product Processing Industry
  • Chart: Tools of the Trade: Growth Strategies for Success

  • Technology & Systems
    Revenue Volatility
  • Chart: Volatility vs Industry Growth

  • Regulation & Policy
    Industry Assistance
    Table: Industry Data for the Yoghurt & Other Dairy Product Processing Industry
    Includes:
  • Industry Revenue (2011-2025)
  • Industry Gross Product (2011-2025)
  • Establishments (2011-2025)
  • Businesses (2011-2025)
  • Employment (2011-2025)
  • Exports (2011-2025)
  • Imports (2011-2025)
  • Wages (2011-2025)
  • Wages (2011-2025)
  • Purchases (2011-2025)
  • Profit (2011-2025)
  • Depreciation (2011-2025)
  • Marketing (2011-2025)
  • Rent (2011-2025)
  • Utilities (2011-2025)
  • Other (2011-2025)

  • Table: Annual Percentage Change for Key Industry Data
    Table: Key Ratios for Industry Key Data
    Kefir
  • A fermented milk drink, originating from the Caucasus.
  • Own-Label
  • A product manufactured by one company and provided for offer under another company's brand.
  • Skyr
  • A culture dairy product, originating from Iceland, which is naturally high in protein and low in sugar and fat.
  • Whey
  • Whey or milk plasma is the liquid remaining after milk has been curdled and strained.
  • What Our Customers Say

    Why buy this report?

    IBISWorld’s Yoghurt & Other Dairy Product Processing market research report can be used to help you: understand market size and growth potential; major companies; draft business plans and pitch books; and conduct benchmarking and SWOT analysis. Our industry analysis highlights macro industry trends in the overall sector and micro trends faced by companies that do business in the industry. The industry report also provides key industry statistics and 5-year forecasts to anticipate future industry prospects so you can decide with confidence.

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    • Provides Market Size information to assist with planning and strategic decisions.
    • Includes the necessary information to perform SWOT, PEST and STEER analysis.
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    • Analyses key performance and operational metrics so that you can benchmark against your own business, that of your customers’ businesses, or your competitors’ businesses.
    The Yoghurt & Other Dairy Product Processing market research report includes:
    • Historical data and analysis for the key drivers of this industry
    • A five-year forecast of the market and noted trends
    • Detailed research and segmentation for the main products and markets
    • An assessment of the competitive landscape and market shares for major companies
    • And of course, much more

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