Declining milk consumption has been partly to blame for the economic difficulties facing the dairy industry.

Exactly, how did it come to this?

Forbes magazine is out with an article entitled, “How the milk industry went sour, and what every business can learn from it.”  To see the article, click here.

According to the article, the dairy industry has nobody to blame but itself.

Essentially, the article points out, the dairy industry has focused on cows and production efficiency instead of consumers.

The article cites the emergence of niche markets that fell into the laps of competing beverage manufacturers, along with the failure to come up with convenient packaging for on-the-go consumers.

The article says the industry should have defined itself as a “dairy-based nutrition provider” rather than a milk business.

“Other companies, such as United Parcel Services and IBM, successfully stepped back and defined what businesses they were in to create value-added services that built on their core products,” the Forbes article said. “UPS is not just a package shipper; it’s a logistics manager.”

The article concludes by saying the industry needs to do “some serious soul-searching.”

Dairy Herd Management has written about this problem for a number of years, including this recent editorial and this story from 1999.