Cream of the crop: Strong export growth has significantly boosted the industry's performance

The Milk and Cream Processing industry has grown strongly over the past five years, despite challenging conditions in the domestic market. Rising demand for Australian milk in export markets has boosted industry earnings over the period. Industry revenue is expected to grow at an annualised 8.5% over the five years through 2017-18, to reach $2.6 billion. This includes a projected rise of 4.3% in 2017-18 as both global and domestic dairy product prices are expected to recover. Industry profitability has fallen over the past five years as processors have been forced to absorb higher operating costs.Severe price competition for milk products among the major supermarket chains has led to private-label milk products being priced at $1.00...read more.

Industry Statistics & Market Size
Revenue
$3bn
Annual Growth 13-18
8.5%
Forecast Growth 18-23
Profit
Employment
3,861
Businesses
64

Industry Threats & Opportunities

  • The industry has grown strongly over the past five years, despite challenging domestic conditions
  • Rising operating costs and retail-level price competition have reduced margins for many firms
  • Weak domestic milk price growth is projected to hamper margins over the period
  • Industry Report - Industry Key Buyers Chapter

    The Milk and Cream Processing industry is moderately concentrated. The industry's four largest players are expected to account for 67.6% of industry revenue in 2017-18. Market share concentration has decreased over the past five years, with medium-sized milk producers such as the a2 Milk Company gaining market share from the industry's largest players. Additionally, Murray Goulburn is expected to lose significant market share due to its loss of suppliers over the three years through 2017-18. However, strong competition within the industry is expected to have forced some small players to exit the industry.Global food industries are also undergoing consolidation and rationalisation. The...purchase to read more.

    Additional Insights for the Milk and Cream Processing Industry

    IBISWorld identifies 250 Key Success Factors for a business.The most important for the Milk and Cream Processing Industry are

  • Market research and understanding
  • Use of specialist equipment or facilities
  • Use of production techniques that add value to base product(s)
  • IBISWorld analysts also discuss how external factors such as Domestic price of milk and Milk production in the Milk and Cream Processing industry impact industry performance..

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    What's in this report

    What is the Milk and Cream Processing Industry?

    The Milk and Cream Processing industry primarily pasteurises and separates raw milk to make milk and cream products with varying levels of fat content. The industry excludes the manufacture of cultured buttermilk, flavoured milk (whole and skim), sour cream and yoghurt.

    Industry Products
  • Whole milk
  • Low and reduced-fat milk
  • UHT milk
  • Cream
  • Industry Activities
  • Pasteurised cream (except canned)
  • Low-fat milk
  • Pasteurised milk
  • Skim milk
  • Whole milk
  • Ultra pasteurisation milk
  • Table of Contents

    Industry Definition
    Main Activities
    Similar Industries
    Additional Resources
    Industry Statistics Snapshot
    Industry Structure
    Executive Summary
    Executive Summary
    Key External Drivers
  • Domestic price of milk
  • Milk production
  • Demand from supermarkets and grocery stores
  • Trade-weighted index
  • Milk consumption

  • Current Performance
  • Milk prices
  • Murray Goulburn
  • International trade
  • Supermarket

    milk wars

  • Production

    and demand

  • Chart: Revenue Growth

  • Industry Outlook
  • Demand opportunities
  • Price and production
  • Future challenges
  • Table: Milk and Cream Processing Industry Revenue Outlook

  • Industry Life Cycle
  • Life cycle reasons
  • Chart: Benchmarking - Milk and Cream Processing Industry Lifecycle vs The Economy

  • Supply Chains
    Key Buying Industries
  • Dairy Produce Wholesaling
  • Catering Services
  • Supermarkets and Grocery Stores
  • Convenience Stores
  • Cafes and Coffee Shops

  • Key Selling Industries
  • Dairy Cattle Farming

  • Products & Services
  • Whole milk
  • Low and reduced-fat milk
  • UHT milk
  • Cream
  • Chart: Milk and Cream Processing Industry Products and Services Segmentation

  • Demand Determinants
  • Health concerns
  • Innovation

  • Major Markets
  • Supermarkets
  • Export markets
  • Grocery wholesalers
  • Convenience stores
  • Food-service establishments
  • Other
  • Chart: Major Market Segmentation for the Milk and Cream Processing Industry

  • International Trade
    Business Locations
    Chart: Business Locations by State
    Market Share Concentration
    Key Success Factors
    Cost Structure Benchmarks
  • Chart: Cost Structure Benchmarking – Sector vs Milk and Cream Processing

  • Basis of Competition
  • Internal competition
  • External competition

  • Barriers to Entry
  • Table: Barrier to Entry Checklist for the Milk and Cream Processing Industry

  • Industry Globalization
    Lion Pty Ltd, Parmalat Australia Pty Ltd, Murray Goulburn Co-operative Co Limited, Fonterra Co-operative Group Limited,
  • Table: Lion Pty Ltd - financial performance
  • Table: Parmalat Australia Pty Ltd - financial performance
  • Table: Murray Goulburn Co-operative Co Limited - financial performance
  • Table: Fonterra Co-operative Group Limited - financial performance

  • Capital Intensity
  • Chart: Level of Capital Intensity for the Milk and Cream 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 Milk and Cream Processing Industry
    Includes:
  • Industry Revenue (2009-2023)
  • Industry Gross Product (2009-2023)
  • Establishments (2009-2023)
  • Businesses (2009-2023)
  • Employment (2009-2023)
  • Exports (2009-2023)
  • Imports (2009-2023)
  • Wages (2009-2023)

  • Table: Annual Percentage Change for Key Industry Data
    Table: Key Ratios for Industry Key Data
    Plant Sterol
  • A naturally occurring steroid compound that helps lower cholesterol.
  • Private-Label Products
  • Products that are manufactured by a company for sale under another company's brand, typically a supermarket retailer. Private-label products tend to be cheaper than manufacturers' branded products.
  • Uht Milk
  • Milk that is heated at ultra-high temperatures during processing.
  • What Our Customers Say

    Why buy this report?

    IBISWorld’s Milk and Cream Processing market research report provides the latest industry statistics and industry trends, allowing you to identify the products and customers driving revenue growth and profitability. The industry report identifies the leading companies and offers strategic industry analysis of the key factors influencing the market.

    IBISWorld industry market research reports enable you to:
    • Find out about key industry trends
    • Identify threats and opportunities
    • Inform your decisions for marketing, strategy and planning
    • Quickly build competitive intelligence
    This report on Milk and Cream Processing:
    • Provides Market Size information to assist with planning and strategic decisions.
    • Includes the necessary information to perform SWOT, PEST and STEER analysis.
    • Helps you understand market dynamics to give you a deeper understanding of industry competition and the supply chain.
    • 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 Milk and Cream 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

    IBISWorld reports on thousands of industries around the world. Our clients rely on our information and data to stay up-to-date on industry trends across all industries. With this IBISWorld Industry Research Report on Milk and Cream Processing, you can expect thoroughly researched, reliable and current information that will help you to make faster, better business decisions.

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