With raw milk prices low and demand for cheese, yogurt and other dairy foods high, America’s dairy processors are opening up their checkbooks to buy new equipment. A survey by BNP Market Research (Dairy Foods’ research arm) found that 56% of dairy processors are buying equipment this year and 60% plan to buy in 2017.
The city of Sandpoint (population 7,500) is in the skinny part of Idaho, wedged between Washington and Montana, and about an hour south of the Canadian border. Sandpoint is the seat of Bonner County which, at 1,920 square miles, is larger than the entire state of Rhode Island. When the Dixie Chicks sing of “Wide Open Spaces,” they could be referring to this part of Idaho.
Though some dairies saw sales fall last year, others reported increases. As they looked at the long-term prospects of the industry, businesses opened their checkbooks to acquire companies and to expand their processing capabilities.
Just as Dairy Foods was wrapping up its research into the 100 largest dairy processors in North America, the French dairy giant Danone announced it was buying Colorado-based WhiteWave Foods, a processor of organic dairy and plant-based beverages.
It was one of 12 food processing facilities nominated for the award. Dairy Foods invited the dairy industry to vote and help select the recipient. During a five-week period ending July 6, more than 3,500 votes were cast.
In 2015 Alibaba Group founder Jack Ma told a CNBC interviewer that the time to worry about next quarter was two or three years ago. If you are thinking today about what you are going to do in the next three months, you’ll be in trouble, he said.
The 100 largest dairy processors in North America clearly are planning ahead. They are building new plants and adding to existing ones, even though at least 30% of the companies reported lower sales in 2015 than in 2014. They are not going to let a one-year blip derail their plans for the future.
What’s for breakfast? Increasingly, it’s not a traditional meal of cereal and milk or bacon and eggs served at home. Instead, grab-and-go nutritional and performance drinks are a popular meal option. That’s a threat to dairy companies, especially those that make milk, cheese and yogurt.
In head-to-head comparisons, nutrient-dense dairy foods beat their analog counterparts. Perhaps the new FDA labeling requirements will help the dairy industry to push back against claims by plant-based products.
Rob Graves is a dairy farmer and dairy processor who owns Morning Fresh Dairy in Bellvue, Colo. He sells his white and flavored milks up and down the front range of Colorado’s Rocky Mountains. Business was good for the fourth-generation farmer. Demand was growing from home delivery customers, restaurants and Whole Foods. Graves had plans to expand the milk processing plant. That is, until yogurt got in the way.
Based in Colorado but with roots in Australia, noosa yoghurt has disrupted dairy aisles throughout the United States. Innovative flavors and see-through packaging help the product stand out on grocers’ shelves.