The dairy product production industry\'s global demand and dairy prices have declined due to the global economic crisis. A decline in world income and wages and increases in unemployment and supply (predominantly from milk production in New Zealand) have also contributed to a reduction in global demand and dairy prices.

In developed countries, consumption of discretionary dairy products such as ice cream is expected to decline and consumers are expected to switch to cheaper dairy products including private labels. Consumer demand for dairy products in developing countries has declined tremendously since these products are considered more of luxuries than necessities.

Increases in soy milk consumption, declines in the population of children, and better advertising, packaging, and convenience from substitute beverages are factors that have contributed to a decrease in consumer fluid milk consumption over the past decade.

So what can dairy product manufacturers do to profitably increase milk revenue over the long term? Industry consolidation, product development, marketing, and health campaigns are potential measures they could utilize.

1. Industry consolidation can provide access to quality milk supplies at fair prices, encourage continued investment in branding and production technology, and provide production efficiency and lower per unit costs - factors that are vital to maintain and/or gain national retailer supply contracts.

2. Constant product development can result in milk sales growth. Sales of flavored milk products with new flavors and energy boosters have been rising.

3. Push and pull marketing strategies for healthier milk products such as reduced fat milk, organic milk, and value-added milk (or products with added vitamins, nutrients, or low carbs) can also increase milk sales by appealing to the health consciousness of consumers.

These strategies could also help counter consumer shifts from branded organic milk to either private label organic milk or conventional milk.

4. More health campaigns utilized to educate consumers such as young people (main consumers of dairy products) and baby boomers about the importance of calcium and milk could help increase daily milk consumption.

Dairy product manufacturers can cushion or enhance the effects of energy, raw milk, and oil price fluctuations on margin, by using the measures above. In addition to the measures above, what else could manufacturers do to generate revenue and profit growth?

Kenrick Chatman is a revenue and margin growth authority who writes articles on industry analysis and the sales process. Feel free to read about other industries by visiting his industry analysis blog. Get a totally unique version of this article from our artic