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.
Consumers in developed countries are expected to trade down to cheaper dairy products such as private labels and to reduce consumption of discretionary dairy products such as ice cream. In developing countries, dairy products are considered more of luxuries instead of necessities and as a result demand for these products has declined tremendously.
For the past ten years, consumption of consumer fluid milk has decreased due to factors such as better convenience, advertising, and better packaging from substitute beverages, an increase in soy milk consumption, and a decrease in the children population.
What measures could dairy product manufacturers employ to profitably increase milk revenue in the long term? They could use product development, marketing, health campaigns, and industry consolidation.
1. Consolidation within the dairy product production industry can encourage continuous investment in branding and production technology, access to quality milk supplies at generous prices, and enhance production efficiencies - factors that are important to maintain and/or acquire national retailer supply contracts.
2. Continued product development can result in increased milk sales. Flavored milk products with new flavors and energy boosters have been increasing.
3. Pull and push marketing strategies for healthier milk products such as organic milk, reduced fat milk, and value-added milk (milk with added nutrients, vitamins, or low carbs) can also result in milk sales growth by catering to the health consciousness of consumers.
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.
Dairy product manufacturers can cushion or enhance the effects of energy, raw milk, and oil price fluctuations on margin, by using the measures above. In addition to the measures above, what else could manufacturers do to generate revenue and profit growth?
Consumers in developed countries are expected to trade down to cheaper dairy products such as private labels and to reduce consumption of discretionary dairy products such as ice cream. In developing countries, dairy products are considered more of luxuries instead of necessities and as a result demand for these products has declined tremendously.
For the past ten years, consumption of consumer fluid milk has decreased due to factors such as better convenience, advertising, and better packaging from substitute beverages, an increase in soy milk consumption, and a decrease in the children population.
What measures could dairy product manufacturers employ to profitably increase milk revenue in the long term? They could use product development, marketing, health campaigns, and industry consolidation.
1. Consolidation within the dairy product production industry can encourage continuous investment in branding and production technology, access to quality milk supplies at generous prices, and enhance production efficiencies - factors that are important to maintain and/or acquire national retailer supply contracts.
2. Continued product development can result in increased milk sales. Flavored milk products with new flavors and energy boosters have been increasing.
3. Pull and push marketing strategies for healthier milk products such as organic milk, reduced fat milk, and value-added milk (milk with added nutrients, vitamins, or low carbs) can also result in milk sales growth by catering to the health consciousness of consumers.
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.
Dairy product manufacturers can cushion or enhance the effects of energy, raw milk, and oil price fluctuations on margin, by using the measures above. In addition to the measures above, what else could manufacturers do to generate revenue and profit growth?
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