Milk: Dried, Condensed, & Evaporated

INDUSTRIAL CODES

NAICS: 31-1514 Dry, Condensed, and Evaporated Dairy Product Manufacturing

SIC: 2023 Dry, Condensed, and Evaporated Dairy Products

NAICS-Based Product Codes: 31-15141, 31-15145, 31-15147, 31-1514A, 31-1514D, and 31-1514W

PRODUCT OVERVIEW

If we look at the composition of milk, most of it, as one might expect, turns out to be water—88 percent by weight. The water carries the nutritious contents of milk in suspension or as dissolved chemicals. The largest solid component of milk is dissolved organic sugar, lactose (4.7%). A portion of the proteins in milk, the so-called whey proteins, are also dissolved, as are milk's mineral and vitamin contents. Proteins in milk are 3.2 percent by weight. Most of these are casein, carried in suspension. Fat in milk (butter fat), represents 3.4 percent of milk's content. It is suspended as an emulsion, thus as small particles dispersed throughout the milk in such a manner that they do not settle out. Removing the water from raw milk concentrates the nutrients within it. If all the water is removed—and the milk is turned into a powder—the weight of a gallon of milk, ordinarily 8.6 pounds, is reduced to just over one pound. The drying and concentration of milk's nutrients offers cost savings in transporting the product. Removing the water also acts to preserve milk's nutrients. Water is necessary for bacterial metabolism; without it, bacteria cannot thrive. Arguments against these benefits are the costs of drying the milk, an energy-consuming process. Over time benefits have outweighed costs enough so that in 2005 approximately 5 percent of all raw milk was dried, condensed, or evaporated for storage and distributed in the form of canned, bagged, or boxed goods in consumer and in bulk quantities.

A word about terminology. The Census Bureau refers to this industry as Dry, Condensed, and Evaporated Dairy Products, a convention we adopt in this essay as well. For convenience of reference the industry will be abbreviated as DCE or as the dry milk industry despite the fact that in the actual processing of DCE products evaporation is the first process, drying is usually the second, and condensation, somewhat paradoxically, actually consists of adding something, namely sugar, to evaporated milk. Condensed milk, however, was the first product of this industry to reach the market. Sugar was added as the chief preservative after it was discovered that reduced-water milk still spoiled.

History

Milk is a very valuable but also a very perishable product so that efforts to preserve it go back into the dawn of history. The earliest and oldest method of preservation is turning milk into cheese. Humanity apparently stumbled on this method by storing milk in bags formed of the stomachs of slaughtered animals, thus bringing milk into contact with enzymes that naturally digest the protein in milk (the casein component), the enzymes being present in the tissues of the stomach lining. In making cheese, however, the proteins and some of the butter fat are preserved but milk sugars are lost; the product is also transformed from a liquid to a solid.

Although the first modern form of refrigeration was demonstrated in 1873 by Carl von Linde, effective refrigerators available to the public did not emerge until the late 1920s and did not reach high market penetration for another decade. Until that time preservation of milk was uncertain at best. For this reason, inventors in the nineteenth century sought to find ways of preserving milk. Gail Borden Jr. succeeded in discovering an effective method and thus founded a significant dairy industry.

Borden began in farming and stock raising but had a colorful career as a newspaper publisher, surveyor, a revenue collector in Texas, an inventor, and finally as an entrepreneur. The Gold Rush of 1849 alerted him to the demand for foods that would not spoil for long periods of time in the Wild West. His first effort was focused on a stable meat biscuit. He was technically successful but failed financially, turning to the preservation of milk later. He developed a method for condensing milk by boiling it in a vacuum and preserving the canned product by adding sugar. The vacuum pan, key to Borden's innovation, had been invented earlier in the process of sugar manufacturing; Borden had seen the Shakers use such a device for concentrating fruit juice in New Lebanon, New York. He filed his first patent in 1853 but struggled until 1856 before his patent was actually granted. The Patent Office initially refused him until Borden had gathered sufficient scientific testimony to prove that his method actually worked. Commercial use of the process took off at last in 1861 with the outbreak of the Civil War. The war created a significant demand for a stable product that soldiers could easily carry in the field. Condensed milk was safe and very stable. Borden became very successful. A means of preserving it had been found without turning it into a solid or refrigerating it. In the twenty-first century Gail Borden's long shadow is still present as an industry and as a major brand name in the dairy field.

Evaporated milk production, the concentration of milk and its preservation without using sugar, was pioneered by John Baptist Meyenberg, an immigrant from Switzerland. He discovered that better pasteurization of milk alone could preserve concentrated. He founded Helvetia Milk Condensing Company in 1885. Later this company became Pet Incorporated. Meyenberg left the company early because of disputes over product quality; soon after, however, he became associated with E.A. Stewart, the founder of Carnation. Louis Latzer, who soon followed Meyenberg as the president of Helvetica, is credited with perfecting the evaporated milk process. Henri Nestlé, a Swiss chemist, developed the process for producing powdered milk in 1869 and thus pioneered the production of milk chocolate, which used the powder as an ingredient. The corporate successors of these pioneers still dominate the industry as discussed below.

Manufacturing Methods

The product class under consideration in this essay breaks into three major categories: evaporated, condensed, and dried milk. The first two categories remain liquid but with much lower water content. Condensed milk is evaporated milk which has been fortified with additional lactose. These products reach the customer in cans. Dried milk reaches the market in powdered from. Dried milk must first be evaporated before it is dehydrated to a powder. Gail Borden's invention solved a fundamental problem that plagued those who attempted to preserve milk by reducing its water content—damage done to the milk in heating it. The water in milk can be boiled away, of course, but under normal atmospheric pressure the amount of heat required to boil away the water will cook the milk. But if milk is heated in a vacuum, thus at less than atmospheric pressure, it comes to a boil at a much lower temperature, thus around 104 to 113 degrees Fahrenheit (F). Milk's boiling point is higher than that of water (212° F) because it contains sugars. At a temperature of approximately 108 degrees F, water will boil away but the milk will not cook or taste, later, as if it had been. A vacuum can be created in a closed vessel by pumping air from it.

The fat content of all three major products of this industry can be and is preselected by the producer. In order to produce a uniform product that has precisely the content printed on the product's label, all milk intended to be evaporated, condensed, or dried is initially adjusted for fat content by passing through a skimming or centrifuging system in which the butter fat level is automatically standardized to the selected level. The next step is pasteurization of the milk; it is heated to 161 degrees and held at that temperature for approximately 15 seconds. Pasteurization kills off all pathogens that may be present and also preheats the milk. The milk is then introduced into a vacuum chamber. Steam circulating through a heat exchanger heats the milk. The presence of a vacuum in the chamber causes the milk to boil at a low temperature, while most of the water in the milk is drawn from the chamber as vapor. The concentrated milk, with a solids content of 30 to 40 percent (versus that of raw milk at 12%), is drawn off. The finished product is then homogenized and stabilizer in the form of potassium phosphate is added and the milk may be fortified with Vitamin D before it is canned. Homogenization is a process whereby milk is forced through tiny openings under pressure. Fat particles in the milk are reduced in size sufficiently so that they stay suspended in the milk rather than rising to the top.

If the producer is making dried milk powder as the final product, evaporation is followed by a dehydration process. The evaporated milk is still a liquid, albeit more viscous than ordinary milk. Hot air and milk are both sprayed into a chamber in such a manner that they mix turbulently. As tiny droplets of milk tumble in the hot air, they give off their residual moisture, fall to the bottom of the dehydration chamber, and are conveyed out for final sifting and packaging. Some of the milk solids will move with the hot air as it circulates. These are removed in bag houses or cyclones. If in drying, the particles are kept very small, often achieved by using hot drum driers, the resulting powder will dissolve in liquid very rapidly, producing instant milk.

Condensed milk is evaporated milk in which additional sugar has been dissolved to serve as a preservative. The source of the sugar may be cane or lactose. Approximately 40 percent by weight of condensed milk is sugar.

Inputs and Outputs

Although this essay deals with dried, condensed, and evaporated milk, inputs to the industry are, more broadly speaking, dairy products. These may be milk, less then milk, or more than milk. In butter and cheese manufacturing, for example, whey is a major by-product. Whey carries proteins and minerals as well as milk sugars in solution, but is definitely less than milk. Whey is frequently evaporated, dried, additionally processed to separate the lactose elements, and then sold as a dry ingredient to the food or the animal feed industries as an additive. Milk itself may be whole, low-fat, or skim milk and, in these forms, may be sold as a powder or as a canned product. In either form it may be intended as a fortified formula for infants, as a coffee whitener, as the source of reconstituted fluid milk, or as an ingredient in cooking or candy formulations. The milk in milk chocolate, for instance, is typically powdered milk. The product may also be more than milk. Approximately 10 percent of the products of this industry are ice cream mixes containing all of the content of finished ice cream but with all water removed, thus milk or yogurt, sugar, stabilizers, egg whites, and flavorings.

The industry's largest output category is dried, powdered products and mixes, representing about 43 percent of shipments. Canned products are 22 percent of dollar output. Concentrated products moving in bulk quantities, either powdered or semi-liquid, account for 6 percent of shipments, ice cream mixes for 10 percent, and dairy product substitutes for 19 percent. The dairy substitutes, although carried as part of this industry by the Census Bureau—and considered part of it by the industry itself as well—may not carry much dairy content at all. These products are predominantly corn-based formulations; they may contain milk proteins but rarely contain lactose as a source of sugar.

MARKET

In 2005 this industry had shipments of $9.59 billion in the United States. Thus it was larger, but in the same general size-category as ice cream (which shipped $9.01 billion in product). Of the major industries that rely on cow's milk as a foundation, however, the DCE category has had the least growth over all. In the 1992 to 2005 period, for instance, Milk and Butter as a single industry grew at a rate of 2.4 percent per year, Cheese at 3 percent, and Ice Cream at 4.2 percent per year. DCE was last with an annual growth rate of 1.9 percent, just a shade over total population growth in the same period which was 1.3 percent per year.

The explanation of this industry's performance rests on multiple and interacting factors, among them changes in the underlying dairy industry, not least its governmental support structures, the structure of the dried milk industry itself, the complexities of modern marketing and product development trends, consumer anxieties and fashions, and gradually shifting lifestyles that may or may not continue into the future.

Trends in the dairy industry have been significantly influenced by: (1) declining dairy herds, (2) substantially growing average output of milk per cow which has been due in part to the introduction of a manufactured growth hormone (resisted by the public), and (3) political pressures to remove milk subsidies (resisted by the dairy industry and its powerful lobbies). These factors have caused milk prices to rise and to fluctuate much more wildly than ever before after passage of the 1996 Farm Act. To some extent growth in the major dairy industries reflects the advance of milk prices in traditional product categories for which direct alternatives are few. The public is thus obliged to pay the higher prices. Provisions of the 1996 Farm Act which projected elimination of milk subsidies were later revised. Reaction to the use of the growth hormone have resulted in its elimination in large portions of the U.S. dairy herd. But changes in subsidy structures have taken place and volatility in milk pricing has continued since the mid-1990s.

Large portions of dried milk products are based on by-products of butter and of cheese manufacturing, namely the occurrence of whey. Disposing of whey is a cost for butter and cheese producers who, consequently, are less inclined to pass on increased milk costs to those willing to process whey into milk solids. Butter and cheese, incidentally, are also the only two dairy products which have enjoyed growing, rather than declining, per capita consumption. The consequence is that the costs of a portion of DCE's raw materials have not increased. Dried, condensed, and evaporated products have also exhibited declining per capita consumption—more than milk but less than ice cream. At the same time they are more basic nutritional products and more difficult to sell in highly differentiated forms. In the ice cream industry flavors are extremely important. In the fluid milk category producers endeavor to sell more milk by offering it in flavored brands and as snack drinks. Dips and flavored yogurts also provide producers opportunities to upgrade commodities into branded specialties. Such opportunities are fewer in the dried milk industry. These competitive forces have kept prices from immediately reflecting the swings in fluid milk prices.

Lifestyle changes have favored the purchasing of ready-to-eat meals, eating out, or sending out for food. Regular, formal meals in which one or both parents prepare meals and all member of the family sit down together to enjoy them are giving way to grabbing meals on the go. This way of life diverts attention from cooking at home. The dried milk industry is principally a supplier of food ingredients rather than finished meals or handy snacks. Not surprisingly it does not display the growth pattern of a category like cheese nearly half of which is incorporated in fast foods, prepared foods, and all manner of snacks.

The Census Bureau divides the DCE industry into five major components of which the largest is dry milk, whey, and mixtures, representing 43 percent of total shipments in 2002, the last year for which data were available at time of writing. The largest subcategories under this segment were nonfat dried milk products intended for human consumption and infant formula (31% and 29% of the segment respectively).

Canned or packaged products, including evaporated and condensed milk products, were 22 percent of the total. The two leading subcategories here were liquid infant formula and UHT milk (30% and 20% of the segment). UHT stands for ultra heat treated milk. Such milk is held for 1 second at 275 degrees Fahrenheit, a temperature at which spores in milk are killed off. UHT milk can be stored on shelves at room temperature for six to nine months. UHT milk is referred to as shelf-stable. The category has had great success in Europe but U.S. consumers have been lukewarm toward this method of distribution.

The last three segments are dried milk and whey products distributed in bulk, 6 percent of industry shipments, dried ice cream and sherbet mixes, 10 percent, and dairy product substitutes, 19 percent. A small proportion of bulk shipments (10% of the segment) is intended for animal feeds, for example, pet foods. The three largest subcategories in the ice cream mix category are regular, low fat, and yogurt (47%, 17%, and 13% of the segment respectively). Coffee whiteners represent a major category of dairy substitutes (27% of the segment).

KEY PRODUCERS/MANUFACTURERS

Based on data published by the Census Bureau as part of the 2002 Economic Census, 160 companies participated in this industry in that year. They operated 214 establishments; of these 119 had twenty or more employees. Five years earlier the industry had 168 companies, 213 establishments, and 122 larger establishments (20-or-more employees), suggesting that structural change in this industry had been minimal.

The second- and third-largest segments of this industry—canned milk and dairy substitutes—have the best-known national brands. The leading producer of condensed and evaporated milk products is Carnation, owned by Nestlé S.A. since 1985. Carnation, originally Pacific Coast Condensed Milk Company, had been founded in 1899 by E.A. Stewart, a grocer in Kent, Washington. Early in the company's history, Stewart saw the name Carnation used by a brand of cigars and adopted it for his product; he thought it a poor name for stogies but a great name for milk. Stewart was an able promoter and built his brand and company well. An early company slogan, introduced in 1907, was "Carnation Condensed Milk, Milk from Contented Cows." The campaign ran for years and even inspired a radio show, The Contented Hour. By the time Nestlé acquired Carnation for $3 billion, the company had revenues of $3.4 billion and a strong presence in canned and powdered milk products, breakfast foods, dairy substitutes, and pet products.

Pet Incorporated, the renamed Helvetica Milk Condensing Company, continues to be a major factor in the canned and dried milk segments. The company was acquired by J.M. Smucker in 2004. In an illustration of consolidation within the food industry, Pet had first been acquired by Pillsbury, Pillsbury by International Multifoods, and Multifoods by Smucker.

The original Borden brand of evaporated and condensed milk is represented in the twenty-first century by Eagle Family Foods, Inc., a company started in 1997 by Borden Chemical employees and two investment groups, GE Asset Management and Wartburg, Pincus. Borden Chemical Inc., now owned by Apollo Management Inc., is the lineal descendant of Gail Borden's original nineteenth century enterprise. The company became a chemicals producer over time and sold off its dairy and food interests in the late 1990s, including its canned milk operations to Eagle. Borden, through a subsidiary, BDS Two, Inc., continues to own and to license to others the original Borden brand names also used by other companies in the milk business. In 2004, fleshing out its operations, Eagle Family Foods acquired Milnot Corporation, the nation's largest private label producer of canned milk products. At its start-up Eagle also acquired the Cremora line of non-dairy creamers from Borden; it subsequently sold this product line to Dean Foods, the nation's largest milk processing company. Dean Foods also began in the dried milk industry as Dean Evaporated Milk Company.

Dried milk and whey production is closely associated with cooperatives or dairies engaged in cheese production. Among the largest participants in this business is Dairy Farmers of America (DFA), the nation's leading cooperative. DFA operates seven plants across the country in which it produces what it labels shelf-stable products, dehydrated products, and ingredients for the food industry. Another leading producer is Leprino Foods Company, a major producer of Italian cheese varieties. Leprino produces several distinct dried whey and lactose products for the food industry. Abbott Laboratories is a leader in dried baby formulas under the Similac brand name. Two other top producers are Foremost Farms USA, a Wisconsin-based cooperative, cheese maker, and supplier of non-fat dry milk, buttermilk powder, dried whole milk, and whey and lactose products and Associated Milk Producers Inc., a manufacturer of instant milk. Associated Milk Producers is a cooperative of 4,000 dairy farmers in the Upper Midwest.

MATERIALS & SUPPLY CHAIN LOGISTICS

Production of evaporated and condensed milk takes place as close to the occurrence of milk as possible because transportation of milk solids is more economical than transporting water to distant sites where it will be removed. Whey-based dehydrated products are made in conjunction with cheese production which, in turn, takes place near milk production centers. Most of the milk (89%) is produced in 23 states. Three states—California, Wisconsin, and New York—account for 40 percent of all milk. Production plants tend to be clustered in California, in Minnesota and Wisconsin, in the North East, in Illinois and Ohio, and in Texas. Evaporation and drying plants are often located in close vicinity to cheese production plants.

DISTRIBUTION CHANNEL

Distribution systems in the dairy industry as a whole, the dried milk industry included, take complex forms because the chief raw material of the industry, milk itself, occurs on farms. The average dairy herd is around 99 cows. Milk is thus initially aggregated at processing centers. Large dairy farms perform some of the processing themselves while smaller operations transport milk immediately after its acquisition to centers. Dairy cooperatives are major players in the industry. Some have dairy farms, others dairies, and yet others have both as their members. Large cooperatives are active both in the distribution, processing, and manufacturing of dairy products. Finally, these products are moved directly to retailers or reach the final customer as food ingredients incorporated by the entire spectrum of the food processing industry.

Evaporated and condensed milk products follow retail distribution channels in which large chains purchase directly from the producers and small groceries obtain their products through wholesale merchants. The wholesalers may be corporations or dairy cooperatives.

Powdered products intended for the consumer market follow the same channel. Substantial portions of dried products, however, are sold by producers to other companies in the food processing business as ingredients. Manufacturers offer branded but bulk-packaged goods to any company. Frequently, however, the producer and buyer negotiate long term relationships under which the producer supplies the food company on a continuous basis with a specially-engineered product or mix of products. In turn then the DCE product reaches the consumer as part of prepared food, bakery, candy, soup, and other lines through the regular retail channel.

Ice cream mixes may reach the ultimate consumer as a product sold by an ice cream shop which reconstitutes the mix, freezes its product on site, and sells it as cones or as packaged ice cream made from dried mixes but distributed through the retail grocery channel.

Many dairy substitutes, although included in the DCE industry, are not strictly-speaking dairy products. They will often contain milk solids but have—as most coffee whiteners have, for example—corn products as their chief ingredients. Producers of these products incorporate milk solids (typically proteins only) obtained from dried whey producers.

KEY USERS

Key users of evaporated and condensed milk are people who cook and bake, the motivation for buying the product often arising from reading recipes that call for such milk as an ingredient. The product category has been around since the nineteenth century and its characteristics are well known, not least the high sugar content of condensed milk and the high butter fat content of evaporated whole milk. Recipe writers can thus specify a product and accurately predict outcomes based on product uniformity. Not surprisingly, many food company sites on the Internet offer their visitors recipes in which their products are specified as ingredients by name. Analogously, powdered milk is a preferred baking ingredient in households that do not routinely consume fluid milk. Powdered milk can be stored for extensive periods of time and is handy when the baking recipe calls for milk.

Families with babies and small children are key users of infant formulas produced by this industry, the products used for their convenience in use, ease of storage, and their scientifically formulated nutritional and vitamin content. The food industry—including the food service industry—is a key user of DCE products. These are deployed as standard ingredients in every conceivable baked product, many ready-to-eat meals, as sweeteners, as sources of protein, as additives to sauces, and as ingredients in candy. Dried products specially formulated for fat, sugar, and protein content—and arriving in uniform composition day after day—are preferred to raw inputs that may exhibit much more variance over time and in different seasons. Coffee drinkers—and the lactose intolerant—are key users of dairy substitutes formulated to deliver the taste and texture of dairy products but with lactose or fat removed for those intent on watching their diets.

ADJACENT MARKETS

Dried, condensed, and evaporated milk products are offered primarily for the ultimate consumer's convenience. The obvious alternatives to such foods are the fresh varieties—fluid milk, butter milk, yogurt, sour cream, and sugar. The negatives of using fresh products are the advantages of reaching for dry or concentrated alternatives: more space, refrigerated space, is required and, even with refrigerator room available, the product must be consumed more expeditiously than dry milk products with naturally longer shelf life.

RESEARCH & DEVELOPMENT

Research efforts directly or closely related to dried, condensed, and evaporated dairy products fall into several categories, the major thrusts being product improvement from a health perspective, an intense examination of whey proteins from various angles, conceptualization and testing of alternatives to milk preservation and extension of the life of dried products, and new product development.

Milk products contain cholesterol and cholesterol is associated with the hardening of arteries and consequently heart disease. Removing or minimizing cholesterol in dairy products or enabling the body to keep it from the blood stream are targets of research. One company for instance, as reported in Dairy Foods, Origo Biosciences, is working on a dietary antibody that binds to cholesterol in the human digestive system and thus keeps it out of circulation. Development of a such an anti-cholesterol agent or factor that could be added to dairy products is Origo's developmental aim. Origo envisions the antibody sold as an ingredient of whey-protein concentrates. The market for food products specifically formulated to fight heart disease is valued at $3 billion per year, according to Dairy Foods, and growing

Research on whey proteins is of intense interest to the dairy industry generally. In that whey products typically reach the market in dry form, breakthroughs in this area are of direct relevance to the DCE industry. Research is directed to the bio-chemistry of whey proteins to discover potential pharmaceutical applications, nutritional benefits, and their flavor-enhancing properties. The entire dairy substitute category could benefit, for instance, by a better understanding of which milk proteins specifically produce the unique flavor experiences that milk products provide. Extracting such chemicals from whey and making them available to dairy substitute producers could create new markets for whey.

As reported in Food Engineering, work is underway at Cornell University to study how carbonation might be used to preserve raw milk for extended periods of time without refrigeration—opening significant export markets for milk producers. Carbon dioxide acts as an anti-microbial agent and work is aimed at exploring this potential development of raw milk. Pasteurized and concentrated milk (evaporated to remove some moisture) is best suited for this potential application. If such R&D eventually proves successful, the United States, a large milk producer, may find larger export markets for milk. Work is also pursued to prolong the shelf life of dried milk.

New product development is a major thrust in dairy as a whole and in whey-utilization particularly. One example, illustrating both trends, is reported by Lori Dahm in Dairy Field. Dahm reports on the development of clear whey-drinks for athletes by Glambia Foods Inc. that deliver a high amount of protein in a clear, thirst-quenching liquid.

CURRENT TRENDS

Two trends—and somewhat contradictory trends at that—dominate the dairy industry and also the smaller segment of it. The first is to emphasize the health-enhancing character of milk, nature's miracle food; the second is a collective attempt to reposition milk in the public consciousness. If the industry could have its way, milk would stop being a commodity and turn into a diverse, indeed an infinite, array of unique, branded specialty products. These trends arise from equally contradictory realities in today's society.

Milk continues to be—and likely will remain—what it has always been: a standard, staple, food product largely identified with childhood and youth. At the same time, milk's cholesterol content on the one hand, implicated in growing obesity, and its sugar content on the other, linked with the growing incidence of diabetes, have somewhat tarnished the product's image. The promotion of the product as a traditional nutrient goes hand in hand with modifying milk by reducing its fat content. Despite these efforts, the public, voting with its dollars, consumes more cheese and butter every year and buys more regular ice cream than the low-fat kind.

At the same time, changing lifestyles are transforming the manner in which many people take in food. The concept of three square meals a day, typically eaten in a family group, is fraying. Casual eating, often on the run, is becoming common. The increasing tempo of daily life produces a demand for easy-to-consume or easy-to-fix meals. Snacks that deliver a higher amount of genuine nutrition fit this mode. Milk, with its high levels of nutrition, is an ideal component of such snacks. Milk in concentrated forms is an ideal raw material for food formulators. The industry's promotional efforts are thus aimed at the traditional ways of seeing milk and on promoting its benefits as a casual product for people in constant motion. This trend is also supported by the fact that margins on commodities are always low and on highly differentiated products always high. Corporations therefore try to sell as much dairy tonnage as possible in branded, differentiated, and "prepared" forms as possible.

Dried, condensed, and evaporated dairy products have shown only modest growth because, along with fluid milk itself, they have the least opportunity for differentiation. Whey products are sold as ingredients. Dried milk is a cooking—ingredient. Canned milk is just a well-preserved milk product. Not surprisingly, therefore, interest in this industry is in developing products from these ingredients. Those can be sold more effectively at higher margins than the actual output of the industry.

TARGET MARKETS & SEGMENTATION

As already noted under Key Users above, the major markets for DCE products are consumers and food processors. In the consumer category two major markets are cooks and bakers and parents with infants. Food processors divide into three segments. The largest of these are food companies that purchase dried products for incorporation in a vast variety of prepared meals and baked products aimed at consumer markets. Pet food producers represent a small segment. Ice cream producers represent a larger specialty segment; these companies, typically, are relatively small producers who find it more economical to buy powdered mixes rather than raw milk.

RELATED ASSOCIATIONS & ORGANIZATIONS

American Dairy Association & Dairy Council, Inc., http://www.adadc.com

American Dairy Products Institute, http://www.adpi.org

International Dairy Foods Association (IDFA), http://www.idfa.org/about/index.cfm

National Milk Producers Federation, http://www.nmpf.org

BIBLIOGRAPHY

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"The Carnation Story: From Contented Cows to Carnation." Nestlé S.A. Available from 〈http://www.verybestbaking.com/products/carnation/history.aspx〉.

"Condensed Milk: A New Era in Milk Production." Borden's Milk Factory. Available from 〈http://www.southeastmuseum.org/html/borden_s_milk.html〉.

Crowley, Carolyn Hughes. "The Man Who Invented Elsie, the Borden Cow." Smithsonian. Available from 〈http://www.smithsonianmagazine.com/issues/1999/september/object_sep99.php〉.

Dahm, Lori. "Powerful Protein: Whey continues to expand its value beyond dairy." Dairy Field. January 2007.

Darnay, Arsen J. and Joyce P. Simkin. Manufacturing & Distribution USA, 4th ed. Thomson Gale, 2006, Volume 1, 80-84.

"Evaporation and Dehydration." University of Guelph, Dairy Science and Technology. Available from 〈http://www.foodsci.uoguelph.ca/dairyedu/evapdehyd.html#evap〉.

Higgins, Kevin T. "Carbonation as a Market Disrupter." Food Engineering. October 2005.

Lazich, Robert S. Market Share Reporter 2007. Thomson Gale, 2007, Volume 1, 67-78.

Reed, O.E. "Gail Borden." University of California, UC Davis. Available from 〈http://drinc.ucdavis.edu/borden.htm〉.

Wattiaux, Michel A. "Milk Composition and Nutritional Value." University of Wisconsin-Madison, Babcock Institute for International Dairy Research and Development. Available from 〈http://babcock.cals.wisc.edu/downloads/de/19.en.pdf〉.

see also Cheese, Ice Cream, Milk & Butter