The Dairy Industry Is Facing Challenges, And The Trend Of Cost Reduction And Efficiency Increase Is Obvious

With the release of the third quarter financial reports of major dairy enterprises, the industry trend is more clearly displayed in front of the public. Faced with the severe situation of declining performance, dairy enterprises have taken measures to seek new growth points in difficulties.

According to new data from the National Bureau of Statistics, in the first half of 2024, the domestic milk output will reach 18.56 million tons, with a year-on-year growth of 3.4%, which shows the steady growth of milk supply. However, at the same time, the output of dairy products of large-scale dairy enterprises declined by 3% year on year, and the growth rate of milk output was higher than that of consumption, reflecting the sluggish growth of market demand and the increasing pressure on dairy products inventory. In the first three quarters, although the total milk output reached 29.02 million tons, it decreased by nearly 30000 tons year-on-year, down 0.1%, further intensifying the contradiction between supply and demand in the industry.

Judging from the operating data of dairy enterprises, the reduction of revenue has become an important feature that cannot be ignored at present. Yili Dairy's revenue in the first three quarters of this year was 88.733 billion yuan, down 8.61% year on year. Bright Dairy and New Dairy were also not spared. The former's revenue was 18.413 billion yuan, down 10.89% year on year; The latter's revenue was 8.15 billion yuan, a slight increase of 0.54% year on year, but the growth rate was far lower than expected.

The losses of upstream dairy enterprises are even more shocking. The net profit of western animal husbandry in the third quarter dropped 96.34%, with a loss of 42 million yuan; During the same period, the net profit of manors and ranches declined by 577.87%, with a loss of 118 million yuan. In the semi annual report, Yoran Farming, Aoya Group, China Shengmu and other upstream dairy enterprises also suffered huge losses, with losses of 331 million yuan, 636 million yuan and 144 million yuan respectively. These figures not only reveal the difficult situation of upstream dairy enterprises, but also reflect the pressure faced by the entire dairy industry chain.

Facing the performance crisis, dairy enterprises have taken measures to deal with it. On the one hand, efforts should be made to reduce costs and increase efficiency and improve profitability by optimizing production processes, reducing raw material costs, and improving product added value. On the other hand, we will actively adjust the product structure and increase the research, development and promotion of high-end and functional dairy products to meet the increasingly diversified needs of consumers. At the same time, dairy enterprises also strengthened cooperation with e-commerce, new retail and other channels to expand sales channels and enhance brand influence.

However, the implementation effect of these measures is not satisfactory. Under the dual pressure of fierce market competition and changing consumer demand, dairy enterprises still need to continue to explore and innovate in order to find a new way out in the predicament. In the future, with the acceleration of industry integration and further upgrading of consumer demand, the dairy industry may usher in more profound changes. Only by following the market trend and constantly improving their competitiveness, dairy enterprises can be invincible in the fierce market competition.