Shifting Landscapes: Dairy Dynamics in the US and Canada
Source: The DairyNews
In both the United States and Canada, the dairy industry is undergoing significant transformations, driven by changing consumer preferences, supply chain dynamics, and global market demands.
US Retail Giants Take Charge
Walmart, a behemoth in the US retail sector, is bolstering its milk processing capabilities with the construction of a third facility in Texas, set to commence operations in 2026. This expansion follows the inauguration of Walmart's first milk processing facility in Indiana in 2018 and a second facility in Georgia slated to open in 2025. By establishing local processing hubs, Walmart aims to exert greater control over milk production, mitigating supply chain disruptions and serving over 750 stores across multiple states, including Oklahoma and Louisiana.
Similarly, Kroger, another major US grocery chain, is doubling down on dairy processing to maintain competitive pricing. With a history of operating its own processing plants, Kroger recently announced a $70 million investment to modernize a significant dairy facility in Ohio, focusing on processing aseptic milk products. Aseptic milk undergoes ultra-high-temperature pasteurization and is packaged in anaerobic conditions, enabling extended shelf life without refrigeration—a key component of Kroger's strategy to offer long-lasting, protein-rich beverages and dairy alternatives.
Bagged Milk's Decline in Canada
In Canada, a traditional packaging format for milk—bagged milk—is facing dwindling popularity. Originating in 1967, this format, featuring three 1-litre bags sold together, has been a staple in Canadian households for decades. However, declining milk consumption, changing household sizes, and surging demand for alternative milk options are driving a decline in bagged milk's appeal. This trend signals a potential shift in packaging preferences, not only in Canada but also in countries like India, Israel, and select South American nations where bagged milk remains prevalent.
Infant Formula Dilemma
In Ontario, Canada, a controversial infant formula plant owned by a Chinese firm (Canada Royal Milk) continues to export its entire production to China, despite local shortages in Canada and the US. The absence of alternative formula plants in Canada leaves Canadian infants reliant on imports. Intriguingly, Canada boasts a surplus of solids non-fat, a key ingredient in formula production, prompting the government to allocate $333 million in the 2023 federal budget to address this surplus. Despite this, no plans for new formula plants have been announced. Notably, Canada Royal Milk received substantial funding in 2017, with the former head of the Canadian Dairy Commission, instrumental in securing investment, later joining the company's board of directors.
Walmart, a behemoth in the US retail sector, is bolstering its milk processing capabilities with the construction of a third facility in Texas, set to commence operations in 2026. This expansion follows the inauguration of Walmart's first milk processing facility in Indiana in 2018 and a second facility in Georgia slated to open in 2025. By establishing local processing hubs, Walmart aims to exert greater control over milk production, mitigating supply chain disruptions and serving over 750 stores across multiple states, including Oklahoma and Louisiana.
Similarly, Kroger, another major US grocery chain, is doubling down on dairy processing to maintain competitive pricing. With a history of operating its own processing plants, Kroger recently announced a $70 million investment to modernize a significant dairy facility in Ohio, focusing on processing aseptic milk products. Aseptic milk undergoes ultra-high-temperature pasteurization and is packaged in anaerobic conditions, enabling extended shelf life without refrigeration—a key component of Kroger's strategy to offer long-lasting, protein-rich beverages and dairy alternatives.
Bagged Milk's Decline in Canada
In Canada, a traditional packaging format for milk—bagged milk—is facing dwindling popularity. Originating in 1967, this format, featuring three 1-litre bags sold together, has been a staple in Canadian households for decades. However, declining milk consumption, changing household sizes, and surging demand for alternative milk options are driving a decline in bagged milk's appeal. This trend signals a potential shift in packaging preferences, not only in Canada but also in countries like India, Israel, and select South American nations where bagged milk remains prevalent.
Infant Formula Dilemma
In Ontario, Canada, a controversial infant formula plant owned by a Chinese firm (Canada Royal Milk) continues to export its entire production to China, despite local shortages in Canada and the US. The absence of alternative formula plants in Canada leaves Canadian infants reliant on imports. Intriguingly, Canada boasts a surplus of solids non-fat, a key ingredient in formula production, prompting the government to allocate $333 million in the 2023 federal budget to address this surplus. Despite this, no plans for new formula plants have been announced. Notably, Canada Royal Milk received substantial funding in 2017, with the former head of the Canadian Dairy Commission, instrumental in securing investment, later joining the company's board of directors.
