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Dairy Wholesale

Dairy Wholesale

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Executive summary

The Dairy Wholesaling industry has experienced stable revenue growth over most of the five years to 2022 as a result of both increasing per capita disposable income and per capita dairy consumption. However as industry performance is heavily dependent on commodity prices and retailer practices, the growing trend of vertical integration between manufacturers and retailers has heightened external competition, raised barriers to entry and restricted the expansion of traditional merchant wholesalers. Consequently, many industry operators have struggled to remain relevant within the supply chain, resulting in the departure of numerous dairy wholesalers. Despite these challenges, industry revenue is expected to increase an annualized 1.8% to $99.5 billion over the five years to 2022, including an increase of 3.4% in 2022 alone.
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Each report includes:

industry revenue;

industry profit;

industry margin;

industry employment;

industry major players;

industry key external drivers;

industry product & structure segmentation;

industry key trends;

industry Life Cycle;

industry Geographic Breakdown;

industry Key Success Factors;

industry Key statistics for previous years;

forecast of industry Key statistics for the next 5 years;

Reference Wordlist

BARRIERS TO ENTRY
High barriers to entry mean that new companies struggle to enter an industry, while low barriers mean it is easy for new companies to enter an industry.

CAPITAL INTENSITY
Compares the amount of money spent on capital (plant, machinery and equipment) with that spent on labor.
IBISWorld uses the ratio of depreciation to wages as a proxy for capital intensity. High capital intensity is more than $0.333 of capital to $1 of labor; medium is $0.125 to $0.333 of capital to $1 of labor; low is less than $0.125 of capital for every $1 of labor.

CONSTANT PRICES
The dollar figures in the Key Statistics table, including forecasts, are adjusted for inflation using the current year (i.e. year published) as the base year. This removes the impact of changes in the purchasing power of the dollar, leaving only the "real" growth or decline in industry metrics. The inflation adjustments in IBISWorld’s reports are made using the US Bureau of Economic Analysis’ implicit GDP price deflator.

DOMESTIC DEMAND
Spending on industry goods and services within the United States, regardless of their country of origin. It is derived by adding imports to industry revenue, and then subtracting exports.

EMPLOYMENT
The number of permanent, part-time, temporary and seasonal employees, working proprietors, partners, managers and executives within the industry.

Colloquial Terminology

ELECTRONIC DATA INTERCHANGE (EDI)
Enables the instant electronic transfer of data between customers and wholesalers.

MANUFACTURERS' SALES BRANCHES AND OFFICES (MSBOS)
A direct distribution link from an industrial dairy plant to downstream markets, which reduces demand for traditional merchant wholesaler activity.

RADIO-FREQUENCY IDENTIFICATION (RFID)
Technology that enables noncontact reading and real-time data collection and lasts longer in difficult conditions that would cause regular bar codes to deteriorate.

Details

Industry profit, measured as earnings before interest and taxes, has been volatile as it is closely linked to supply and demand factors such as the price of milk which determines how much products wholesalers can buy from its suppliers. However as the price of milk is set to increase 4.3% over the five years to 2022, this has resulted in purchasing costs rising in the period. While this has helped raised industry revenue in the period as operators can pass these costs in the form of higher prices to its downstream markets, it still pressures operators to turn a profit since they have to buy these products at a higher cost. As a result, industry profit is set to account for 1.4% of revenue in 2022, a decrease from 2.0% in 2017.

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