Got Milk? – Mapping the Dairy Supply Chain in Developed Markets

Introduction

Scope

Objectives of Global Briefing (1)

Objectives of Global Briefing (2)

Supply Chain Comprised of Three Primary Tranches

The Cost of Milk Collection, Processing and Retail Distribution

Key Findings

Regional Analysis

Production Costs Account for Largest Part of Retail Prices

Highest Returns Found in Processing Tranche

Health and Wellness Drives Processor Costs and Returns

Dairy Farmers Generally Most Sensitive to Price Fluctuations

Country Analysis

Spanish Retail Milk Market Increasingly Polarised

Supply Chain Costs for Long-Life/UHT Milk in Spain

Spanish UHT Milk Breakdown of Transport Costs

Spanish UHT Milk Costs from Processor to Retailer

Spanish UHT Milk Costs at the Final Retail Point of Sale

Spanish Retailers Derive Greatest Benefit Along Supply Chain

French Retailers Imposing Will on Overall Supply Chain

Supply Chain Costs for UHT Milk and Plain Yoghurt in France

Quantifying Efficiency Savings for French Private Label Dairy

Breakdown of French Retailers’ Turnover for Dairy Products

French Private Label Milk Ultimately Proves More Profitable

Discounters Dominate German Milk Retail Distribution

Supply Chain Costs for Processed Fluid Milk in Germany

Waste Collection an Added Cost to German Milk Processing

Consolidating Retail Landscape for UK Fluid Processed Milk

Supply Chain Costs for Processed Fluid Milk in the UK

Breakdown of UK Milk Farming Production Costs

Can Greater Efficiencies Offset Rising UK Production Costs?

Bigger is Better: Larger Farms Maximise Economies of Scale

Size of Farm Also Impacts UK Milk Processing Costs

HDPE Bottles Dominate UK Milk, But Times Are Changing

Dairy Crest Offers Benchmark on UK Milk Processing Returns

Petrol Prices Drive Up UK Transport/Distribution Costs

UK Retailers See Biggest Gross Margin Increase for Milk

Private Label Milk Retail Prices: France, Germany, Spain, UK

Key Trends and Developments

Milk Farmgate Prices Have Seen Extreme Volatility

Farmgate Prices Recovering Since Nadir of Mid-2009

Can Fair Trade Milk Counter Farmgate Price Volatility?

Cooperatives Offset Farm Price Volatility, Maximise Profits…

…But Do They Really Achieve This?

Future Prospects

Economic Growth Gathering Pace in 2010…

…Or is Talk of Economic Recovery Still Premature?

Oil Prices and Energy Costs

Mounting Labour Costs

Cattle Feed

Cattle Feed and Commodity Prices

Consumer Demand for Milk

Global Milk Consumption on the Rise

Distribution Favours Super/Hypermarkets

Impact of the Abolition of EU Milk Quotas

Final Conclusions

Supply Chain Cost Projections for Milk in Western Europe

Highest Returns Remain in Processing Tranche

Returns Relative to Retail Price by Tranche, 2009 vs. 2015

Outlook for Milk Supply Chain 2011-2012

Outlook on Consumer Behaviour

The Way Forward for Manufacturers

Report Definitions

Data Parameters and Report Definitions

Definitions