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    Dairy Foods & BeveragesIngredients for Dairy Processors

    State of the Dairy Industry: Inflation remains a key dairy trend

    Dairy Foods presents its 2023 State of the Industry report.

    Game Field

    Opening image courtesy of gleitfrosch / iStock / Getty Images Plus.

    November 29, 2023

    We just can’t wait for the 2024 Olympic Summer Games, scheduled to take place in Paris, France, from July 26 to Aug. 11, 2024, to arrive. So, it’s fitting that when thinking about themes for our annual State of the Industry report, Dairy Foods just had to present a sports theme. In the next several pages of in-depth reporting, find out which dairy categories are scoring touchdowns, which are methodically moving the ball toward the first-down marker, and if any are getting stuffed at the line for a loss.

    Like the past year, one major theme affecting the cost of food and beverages is inflation. For the 12 months ending Aug. 13, the consumer price index (CPI) rose 3.7% compared to the prior year. Overall, food CPI ticked up by 4.3% year over year, according to the U.S. Bureau of Labor Statistics. All of these figures are higher than the U.S. Federal Reserve’s goal of inflation rising 2% annually.

    Yet, on a positive note, the index for dairy and related products decreased by just 0.4% in August compared to July, which could bode well for inflation cooling in the dairy industry in the coming months. Looking ahead, economists expect overall CPI to rise 2.5% in 2024, much closer to the Federal Reserve’s target, according to both the Survey of Professional Forecasters and a Wall Street Journal survey.

    Despite the lower recent inflation figure, dairy was certainly affected by inflation during the past year in many categories. This resulted in dollar sales increasing across many segments, while unit sales dropped for the period ending Aug. 13. Dairy milk, plant-based milk, non-fruit drinks, processed cheese, cream cheese, creams/creamers, margarine/spreads, sour cream, yogurt, ice cream/sherbet and frozen novelties all can be characterized under this umbrella, according to Chicago-based market research firm Circana.

    Bucking the trend and enjoying both dollar sales and unit sales growth — a definite positive sign — were natural cheese, butter blends, cottage cheese, and whipped toppings, Circana data reveals.

    Read on as we examine the milk, cheese, cultured dairy, ice cream/frozen novelties, butter and non-dairy beverages categories in-depth. Dairy Foods’ annual State of the Industry report also provides a full review of both the ingredients and exports’ segments of the dairy industry.

    We hope the 2023 State of the Industry report provides plenty of useful information as we get set for the holidays and the upcoming New Year. 

    milk category
    Milk suffers a knockdown

    The dairy category is in no way down for the count, however.

    ice hockey
    Natural cheese scores a hat-trick with diverse flavors, types and textures

    Shredded cheese tallies $6.6 billion in dollar sales with no signs of slowing down.

    gymnist
    Cultured dairy category scores near perfect 10

    Yogurt, cream cheese, cottage cheese “flipping” competition on its head.

    football
    Ice cream/frozen novelties stay cool under pressure

    Category sees dollar sales rise, unit sales fall in most segments.

    tennis ball
    Butter category continues to see smooth sales

    Both the refrigerated butter and butter blends have strong years.

    soccer ball hits net
    Non-dairy continues to perform well

    Coffee, tea and sports nutrition continue to be hot sellers.

    pickleball
    Demand for functional ingredients that bolster health trending upwards

    Probiotics, chickpeas score big on the ingredients’ wellness scale.

    basketball
    Lower dairy prices should drive global demand

    Southeast Asia exports should grow

    Sargento celebrates 70th anniversary

    Sargento CEO Louie Gentine joins Dairy FoodsTV to talk about the company’s success, what its future growth prospect look like, and how it celebrated its 70th anniversary. Also, be sure to look for a story about this topic in the December issue of Dairy Foods.

    LET'S TALK DAIRY

    PROVA Inc.

    Episode 33 — Ethically sourced ingredients hold a special place for PROVA

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    KEYWORDS: state of the industry

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