Wholesale bypass and consolidation decreased the number of available wholesale contracts
New York, NY (PRWEB) September 04, 2014
The Dairy Wholesaling industry wholesales a variety of dairy products including raw milk, processed milk, butter, cheese, cream, ice cream and yogurt to downstream markets such as grocery stores and food-service establishments. During the past five years, the industry has experienced wholesome growth as wholesale operators received steady demand for dairy products from downstream markets. However, not everything has been smooth; during the past five years the industry has had to contend with growing consolidation in both the Dairy Farms industry and the Dairy Product Production industry, which have decreased the number of available wholesale contracts, while increasing wholesale bypass. In all, during the five years to 2014, industry revenue is anticipated to grow.
During the past five years, an increasing number of dairy product manufacturers, such as Kraft Foods Group Inc. and Saputo Inc., expanded their operations to further include in-house wholesaling services. This trend, known as wholesale bypass, allows dairy product producers to distribute their dairy products straight from the factory to retailers, cutting out traditional merchant wholesalers. According to IBISWorld Inudstry Analyst Lucas Isakowitz, “wholesale bypass, coupled with consolidation in the Dairy Product Production industry, decreased the number of available wholesale contracts and led a number of smaller wholesaling operations to either leave the industry or become absorbed by larger existing wholesalers.” As a result of industry consolidation, the number of wholesalers is expected to decrease in the five years to 2014.
“Strong demand from downstream markets, coupled with increased competition because of wholesale bypass and upstream and downstream consolidation, will continue in the five years to 2019,” says Isakowitz. In all, revenue is anticipated to grow. To cope with wholesale bypass, dairy wholesalers are expected to continue investing in technology that improves warehousing, distribution and logistics activities, as well as communication with customers.
For more information, visit IBISWorld’s Dairy Wholesaling in Canada industry report page.
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IBISWorld industry Report Key Topics
The Dairy Wholesaling industry wholesales dairy products (except dried or canned), including butter, cheese, cream, ice cream, milk and yogurt. This industry does not include manufacturers' sales branches and offices (MSBOs) where the wholesaling and production of dairy products occur as one undifferentiated operation; revenue from such MSBO's are including under the scope of the Dairy Product Production industry (IBISWorld 31151CA).
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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