Industry Analysis & Industry Trends
Firms in the Milk and Cream Production industry have endured difficult conditions during the past five years. Highly volatile dairy prices and heavy discounting of milk prices by supermarkets have squeezed industry revenue and profitability. The industry has also been affected by changing consumer preferences, as consumers have shifted away from full-fat milk in favour of low-fat and skimmed alternatives. These conditions have resulted in consolidation activity among industry participants.
Milk processors have found themselves in an unfavourable position, caught between discounting supermarkets and protesting farmers, for much of the past five years. Exacerbated by supermarkets selling cheap milk to compete for customers, processors have been forced to cut farm-gate milk prices... purchase to read more
Industry Report - Industry Key Buyers Chapter
The Milk and Cream Production industry is highly concentrated. The industry is dominated by dairy farmer cooperatives, both domestic and international. Own-label brands are estimated to account for about 85% of liquid milk sales. Producers have been attempting to increase the share of branded products, since they offer higher margins and foster a sense of loyalty among consumers.
The top four players are estimated to account for 90.7% of industry revenue in 2015-16. The remaining market share comprises primarily of a large number of smaller operators operating on a more local basis. The collapse of the Dairy Farmers of Britain cooperative, which went into receivership in June 2009, means concentration has increased since 2009-10. Con.. purchase to read more