This classification covers establishments primarily engaged in the wholesale distribution of dairy products such as butter, cheese, ice cream and ices, and fluid milk and cream. This industry does not include establishments primarily engaged in pasteurizing and bottling milk. Establishments primarily engaged in the wholesale distribution of dried or canned dairy products are classified in SIC 5149: Groceries and Related Products, Not Elsewhere Classified.
Dairy Products (except Dried or Canned) Wholesalers
By 2003 there were 2,767 firms engaged in the wholesale of dairy products, employing some 45,450 workers and generating total sales of $17.2 billion. The late 1990s and early 2000s were marked by brisk consolidation, with the bulk of the dairy industry's distribution and wholesaling activities closely associated with the major dairy cooperatives.
The structure of the wholesale milk industry is somewhat different from that of other wholesale food product operations. In most metropolitan areas, local milk producers make it unnecessary for wholesalers, either chain store or affiliate, to operate their own fluid milk facilities. Instead, distributors arrange with one of the local milk companies for their fluid milk sales. These local producers are responsible for supply and delivery to stores. They also are in charge of producing private-label milk and milk products, which they distribute directly to the retailer.
In rural areas, when local sources are not available, wholesalers usually handle fluid milk through their own distribution centers. These wholesalers may be full-service wholesalers, providing dairy products and complete lines of grocery and non-grocery products. Besides the food products themselves, full-service wholesalers provide assistance to the retailer in advertising, merchandising, and procuring products they may not warehouse.
The retailer-owned wholesaler may also provide fluid milk to a number of outlets. This type of wholesaler represents the efforts of a number of retailers to join forces (sometimes under a common name) to operate their own warehouses and shipping lines. The cooperative effort makes it possible for retailers to obtain merchandise at the lowest possible cost. In addition to providing lines of food products, the retailer-owned wholesaler also supplies group advertising, merchandising, and other services.
Ice cream, butter, and cheese may be handled by retailer-wholesalers, full-service wholesalers, or, in the case of some premium...