The dairy product production industry's global demand and dairy prices have declined due to the global economic crisis. A decline in world income and wages and increases in unemployment and supply (predominantly from milk production in New Zealand) have also contributed to a reduction in global demand and dairy prices.
Demand for dairy products in developing countries has significantly declined since dairy products are considered more of luxuries than necessities. In developed countries, consumers are projected to shift to cheaper dairy products including private labels and decrease consumption of discretionary dairy products.
Increases in soy milk consumption, declines in the population of children, and better advertising, packaging, and convenience from substitute beverages are factors that have contributed to a decrease in consumer fluid milk consumption over the past decade.
For the long term, what could dairy product manufacturers do to generate profitable milk revenue growth? Marketing, health campaigns, industry consolidation, and product development are potential measures they could employ.
1. Industry consolidation can yield access to milk supplies at good prices, inspire continuous investment in product technology and branding, and provide lower per unit costs and production efficiency - measures that are significant to preserve and/or acquire national retailer supply contracts.
2. Constant product development can result in milk sales growth. Sales of flavored milk products with new flavors and energy boosters have been rising.
3. Catering to the health consciousness of consumers via push and pull marketing strategies for healthier milk products such as value-added milk (milk with added vitamins, nutrients, or low carbs), organic milk, and reduced fat milk can also increase milk revenue.
These strategies could also help counter consumer shifts from branded organic milk to either private label organic milk or conventional milk.
4. Educating consumers such as young people (main dairy product customers) and baby boomers via more health campaigns about the significance of milk and calcium could result in an increase of daily milk consumption.
By employing the factors above, dairy product manufacturers can also augment or cushion the effects of energy, oil, and raw milk price fluctuations on margin. What other factors could these manufacturers utilize to generate revenue and profit growth?
Demand for dairy products in developing countries has significantly declined since dairy products are considered more of luxuries than necessities. In developed countries, consumers are projected to shift to cheaper dairy products including private labels and decrease consumption of discretionary dairy products.
Increases in soy milk consumption, declines in the population of children, and better advertising, packaging, and convenience from substitute beverages are factors that have contributed to a decrease in consumer fluid milk consumption over the past decade.
For the long term, what could dairy product manufacturers do to generate profitable milk revenue growth? Marketing, health campaigns, industry consolidation, and product development are potential measures they could employ.
1. Industry consolidation can yield access to milk supplies at good prices, inspire continuous investment in product technology and branding, and provide lower per unit costs and production efficiency - measures that are significant to preserve and/or acquire national retailer supply contracts.
2. Constant product development can result in milk sales growth. Sales of flavored milk products with new flavors and energy boosters have been rising.
3. Catering to the health consciousness of consumers via push and pull marketing strategies for healthier milk products such as value-added milk (milk with added vitamins, nutrients, or low carbs), organic milk, and reduced fat milk can also increase milk revenue.
These strategies could also help counter consumer shifts from branded organic milk to either private label organic milk or conventional milk.
4. Educating consumers such as young people (main dairy product customers) and baby boomers via more health campaigns about the significance of milk and calcium could result in an increase of daily milk consumption.
By employing the factors above, dairy product manufacturers can also augment or cushion the effects of energy, oil, and raw milk price fluctuations on margin. What other factors could these manufacturers utilize to generate revenue and profit growth?
About the Author:
Kenrick Chatman is a sales and bottom line growth authority who writes articles on industry analysis and business development. Feel free to read about other industries by visiting his industry analysis blog. Visit the Uber Article Directory to get a totally unique version of this article for reprint.
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