Dairy Derivatives Procurement Intelligence Report, 2023 - 2030 (Revenue Forecast, Supplier Ranking & Matrix, Emerging Technologies, Pricing Models, Cost Structure, Engagement & Operating Model, Competitive Landscape)

Every organization and its procurement team look forward to negotiating the best deal while procuring a set of products or subscribing to services. Rate benchmarking involves price/cost comparison of more than one set of products/services to analyze the most efficient combination that can potentially help the procurement team in getting the optimum rate.

The US has a higher milk cost compared to New Zealand because the US has a much larger population than NZ, which means that there is a greater demand for dairy products in the US. This leads to more competition for milk in the US, which drives up the price. Tariffs imposed by the US to protect the dairy industry from foreign competition, increasing the cost of dairy products from New Zealand. Transportation costs of finished dairy products from New Zealand to the US are higher than within the US due to the longer distance between the two countries. This longer distance also adds to the cost. The New Zealand government subsidizes its dairy industry, providing financial assistance to dairy farmers, which helps keep the cost of dairy products lower. In contrast, the US government does not subsidize its dairy industry, resulting in no financial assistance for dairy farmers in the US. Due to a few circumstances, China is more expensive than India for dairy derivatives. The difference in production costs is one cause that might exist. Prices may increase because of China's potential higher expenses for labor, shipping, or raw materials. Pricing in both nations may also be impacted by market forces like competition and regulatory restrictions. It's crucial to keep in mind that the market for dairy derivatives is complicated and that a variety of factors contribute to the pricing differences between China and India.

Raw material is one of the major factors in the overall costs associated while offering a product or service. Therefore, if a company is offering its services at reasonable pricing, it must decide if the focus category should be kept in-house or outsourced. Before choosing a supplier and creating a bargaining strategy, the firm that decides to outsource must comprehend the variations in the compensation structures of suppliers.

According to our research, product manager at Nestle receive a 6% - 8% higher base salary compared to the salary received by product manager working in companies such as Danon and Arla Foods. However, the year-on-year increment rate in all these companies majorly depends on the Key Result Areas (KRAs).

Organizations may find it cumbersome to continuously track all the latest developments in their supplier landscape. Outsourcing the activities related to gathering intelligence allows organizations to focus on their core offerings. At this juncture, our newsletter service can help organizations stay updated with the latest developments and innovations and subsequently assist in preventing disruptions in the supply chain. We have identified the following developments within the dairy derivatives category over the last two years:

• In Nov 2022, Freshly and Kettle Cuisine, a top producer of fresh artisanal foods for retail and foodservice consumers, have joined forces under a partnership that Nestlé and L Catterton had announced. The merged business will concentrate on providing customers across various markets and distribution channels with a huge selection of fresh food goods.

• In July 2022, to launch Pro-OptimaTM, a grade A functional whey protein concentrate (FWPC) to the market, NZMP, a Fonterra’s business, formed a joint venture with Tillamook County Creamery Association (TCAA) and Three Mile Canyon Farms in the US.

• In May 2022, a brand-new production facility at Pronsfeld Dairy in Germany was formally opened by Arla. The development represents Arla's largest dairy investment and a major factor in fulfilling the rising demand for wholesome, affordable dairy products on a global scale.