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How to Start an Evaporated Milk Production Business

Do you want to start an evaporated milk production business? If YES, here’s a complete guide to starting an evaporated milk production business with NO money and no experience. If you can successfully launch an evaporated milk production business in the right location, you may not have to struggle to get people to purchase your products.

There are readily available markets for evaporated milk no matter the part of the world you decided to start your own evaporated milk production company. This is so because loads of people consume evaporated milk every day. Despite the fact that starting a standard evaporated milk production company can be capital intensive for an entrepreneur that is just starting out, but if you are able to conduct a thorough market research and feasibility studies before launching the business, you are sure going to breakeven before most businesses that are started on a same day, within same location and under similar economic conditions.

The bottom line is that economic recession hardly affects the rate of consumption of evaporated milk. What most standard evaporated milk production companies rely on to increase sales cum revenue generation is robust distribution networks within their coverage areas. Retailers, restaurants, hotels et al are some of the key business entities that you should partner with if you want to do pretty well in this line of business.

So, if you are considering going into the evaporated milk production business, all you would need is some capital to purchase or lease/rent a suitable production facility and then equip the facility with the needed machines and equipment.

You would also need some additional capital to pay your employees at least for the first 3 months, and also to pay your utility bills. When you read through this article, you will have a clearer picture on how to go about launching the business.

20 Steps to Starting an Evaporated Milk Production Business

1. Understand the Industry

Evaporated milk is one commodity that is consumed in all parts of the world and of course those that are in the business of producing evaporated milk are known to generate sales frequently if the business is properly managed. Evaporated milk, which is known as unsweetened condensed milk in some countries, is a shelf-stable canned milk product with about 60 percent of the water removed from fresh milk. It is different from sweetened condensed milk, which contains added sugar.

Evaporated milk production companies fall under the Dairy Product industry and they are involved in the production of dairy products like pasteurized milk, cream, butter, yogurt, cheese and dry, condensed and evaporated milk. These companies supply these goods to a variety of market segments such as retailers, wholesale and food services amongst others.

The Dairy Product Production industry in the United States of America has achieved strong growth over the years, outperforming other packaged beverage production industries. Dairy producers benefited from increased per capita disposable incomes, which allowed consumers to continue purchasing industry goods. Going forward, the industry is projected to continue to grow, even though at a slower rate than the previous years.

In the last five years, the industry has experienced a slight decline in revenue primarily driven by decreases in input prices. The price of raw milk most significantly affects industry revenue. Industry operators typically benefit from higher input prices because they can pass the costs to consumers in the form of higher prices. Consumers typically purchase these goods regardless of price hikes since dairy products are a staple of the average American diet.

The Dairy Product Production industry that evaporated milk production companies are part of is a thriving sector of the economy of the United States of America and they generate over $105 billion annually from more than 1,250 registered and licensed dairy product production companies scattered all around the United States of America.

The industry is responsible for the employment of over 117,390 people. Experts project the dairy product production industry to grow at -1.2 percent annual rate. The Dean Foods, Nestle and DFA are the market leaders in the dairy product production industry.

A report published by IBISWorld shows that over the five years to 2018, industry performance had been volatile, but eventually experienced steady decline. This was due to large fluctuations in the price of raw (unprocessed) milk.

Industry revenue typically benefits from higher input prices as operators pass along costs downstream by charging higher prices for goods. The decline in raw unprocessed milk prices, and, subsequently, finished milk product prices, can largely be attributed to an even larger drop in prices of feed, which is a strong determinant of the input’s demand.

Despite the fact that there are big corporations who are into the production of evaporated milk, the fact remains that starting a small – scale evaporated milk production business has minimal barriers to entry, with relative minimal startup capital.

Some of the factors that encourage aspiring entrepreneurs to venture into evaporated milk production is that the market cuts across people of all races, culture, financial status and age. That makes it easier for entrepreneurs who are interested in the business to come into the industry at any time they desire; the entry barriers are quite affordable and any serious – minded entrepreneur can comfortably raise the startup capital without collecting loans from the bank.

Over and above, the evaporated milk production industry is a profitable industry and it is open for any aspiring entrepreneur to come in and establish his or her business; you can choose to start on a small scale servicing a community or you can choose to start on a large scale with distribution networks and several outlets in key cities all around the United States of America.

2. Conduct Market Research and Feasibility Studies

  • Demographics and Psychographics

The demographic and psychographic composition of those who drink or make use of evaporated milk cut across all genders and age group; hence the demographic composition for an evaporated milk production company is all encompassing.

The truth is that when it comes to selling evaporated milk, there is indeed a wide range of available customers, so your target market can’t be restricted to just a group of people. So, if you are thinking of going into evaporated milk production business, then you should make your target demographics all encompassing.

3. Decide What Niche to Concentrate On

It is important to state that there is no known niche area when it comes to evaporated milk production. Every player in this line of business are involved in producing dry, condensed and evaporated milk products.

The Level of Competition in the Industry

There is hardly any industry or line of business anywhere in the world where there is no competition, as a matter of fact, it is competition that brings creativity and innovation in the business world. If you are looking towards starting an evaporated milk production company, then you should brace up for competition in the industry.

The truth is that you are not expected to compete amongst evaporated milk production companies in your city, but also international and world class corporations that are also into the production of evaporated milk. Most evaporated milk production companies are leveraging on creativity in terms of packaging and marketing to continue to stay afloat in the industry.

The fact that there is stiff competition in the dairy products production industry does not hamper the performance of new entrants; most of them know how to recreate and re – strategize to reach out or attract more customers.

4. Know the Major Competitors in the Industry

In every industry, there are always brands that perform better or are better regarded by the customers and general public. Some of these brands have been in the industry for a long time, while others are best known for how they conduct their businesses and the results they have achieved over the years.

These are some of the leading dairy products cum evaporated milk production companies in the United States of America and in the globe;

  • Nestlé USA. Glendale, CA
  • Dean Foods Co. Dallas, TX.
  • Saputo Inc. Montreal, Québec.
  • Land O’Lakes Inc. Arden Hills, MN.
  • Dairy Farmers of America Inc. Kansas City, MO.
  • Schreiber Foods. Green Bay, WI.
  • Kraft Foods Cheese & Dairy Division. Northfield, IL.
  • Agropur Cooperative. Longueuil, Quebec.
  • Grupo Lala
  • Parmalat North America
  • California Dairy Incorporated
  • Darigold Inc.
  • HP Hood, LLC
  • Associated Milk Producer Inc.
  • Shamrocks Farms Dairy Division
  • Borden Dairy Co
  • Foremost Farms USA
  • Kroger Co.
  • Amalgamated Dairies Limited
  • Land O’Lakes
Economic Analysis

Starting an evaporated milk production company is not a difficult business venture but at the same time, it is a business that requires thorough economic and cost analysis if you are looking towards making profits in the industry.

Part of what you need to focus on in this line of business is how to build a standard evaporated milk production and packaging plant, a dairy farm that will supply you fresh milk, a robust distribution network, branding and of course how to maintain your machinery and to take care of your overhead before your business breaks even.

Other costs that should be considered during planning and budgeting are supply of packaging materials, and fuel and maintenance costs et al. Lastly, there are a number of permits that are required to run an evaporated milk production company in the United State of America, and of course there are also public health codes to observe.

5. Decide Whether to Buy a Franchise or Start from Scratch

Good enough evaporated milk production business is one of those businesses that sells franchise; brands that have gained huge market leverage can successfully sell their franchise. Any aspiring entrepreneur who is considering starting an evaporated milk production business have the option of either starting from the scratch or buying an existing franchise.

There are loads of factors that should be considered before choosing the option to follow. Some of the factors to consider are cost implications, your financial capacity, your vision, and your business skills and experience. If your intention of starting an evaporated milk production business is to grow beyond one city, if you want to have presence in key cities in the United States, then starting from the scratch is your best option.

But if you just want to start a business with the aim of just making profits and you don’t have the required finance and experience to build a business from the scratch, then it will pay you to buy the franchise of a successful brand in the evaporated milk production company.

Please note that most of the big and successful evaporated milk production companies around started from the scratch and they were able to build a solid business brand. It takes dedication, hard work and determination to achieve business success.

6. Know the Possible Threats and Challenges You Will Face

If you decide to go into evaporated milk production business today, one of the major challenges you are likely going to face is the presence of established brands in the dairy products production industry both in the United States of America and from other parts of the world.

Some other challenges and threats that you are likely going to face is economic downturn; if the economy is in bad shape, evaporated milk production companies usually struggle to maintain their old customers or even welcome new customers. So also, unfavorable government policies can also hamper the growth of your company. There is nothing you can do as regards these threats and challenges other than to stay positive that things will work well for you.

7. Choose the Most Suitable Legal Entity (LLC, C Corp, S Corp)

If you have plans to launch an evaporated milk production business, the legal entity you choose will go a long way to determine how big the business can grow; some evaporated milk production companies design their business for neighborhood market, some for city wide market, while others for national market via franchising.

You have the options of either choosing a general partnership, limited liability company, or even a sole proprietorship for your evaporated milk production business. Ordinarily, sole proprietorship should have been the ideal business structure for a small – scale evaporated milk production business especially if you are just starting out with a moderate startup capital in a small neighborhood and just into manufacturing ready-to-drink evaporated milk.

But if your intention is to grow the business and have distribution networks spread across the United States of America and other countries of the world via franchising, then choosing sole proprietor is not an option for you. Limited Liability Company or even general partnership will cut it for you.

Setting up an LLC protects you from personal liability. If anything goes wrong in the business, it is only the money that you invested into the limited liability company that will be at risk. It is not so for sole proprietorships and general partnerships. Limited liability companies are simpler and more flexible to operate and you don’t need a board of directors, shareholder meetings and other managerial formalities.

These are some of the factors you should consider before choosing a legal entity for your evaporated milk production business; limitation of personal liability, ease of transferability, admission of new owners and investors’ expectation and of course taxes.

If you take your time to study the various legal entities to use for your evaporated milk production business with the ability to sell franchise and open chains of distribution networks all across the United States of America, you will agree that limited liability company is the most suitable. You can start this type of business as limited liability company (LLC) and in future convert it to a ‘C’ corporation or ‘S’ corporation especially when you have the plans of going public.

Upgrading to a ‘C’ corporation or ‘S’ corporation will give you the opportunity to grow your evaporated milk production business so as to compete with major players in the industry; you will be able to generate capital from venture capital firms, you will enjoy separate tax structure, and you can easily transfer ownership of the company.

8. Choose a Catchy Business Name from the ideas Below

When it comes to choosing a name for your business, you should be creative because whatever name you choose for your business will go a long way to create a perception of what the business represents. If you are considering starting your own evaporated milk production, here are some catchy names that you can choose from;

  • Holden® Dairy Product Company, LLC
  • Sean Dean® Dairy Product Company, LLC
  • Milk Way® Evaporated Milk Production Company, Inc.
  • Cow Life® Dairy Product Company, Inc.
  • East Coast® Dairy Product Company, Inc.
  • Stay Alive™ Evaporated Milk Production Company, Inc.
  • Creamy Zest© Evaporated Milk Production Company, Inc.
  • Clear Star™ Dairy Product Company, LLC
  • Snow White© Evaporated Milk Production Company, Inc.
  • Cassandra Butler© Evaporated Milk Production Company, Inc.

9. Discuss With an Agent to Know the Best Insurance Policies for You

In the United States and of course in most countries of the world, you can’t operate a business without having some of the basic insurance policy covers that are required by the industry you want to operate from. So, it is important to create a budget for insurance and perhaps consult an insurance broker to guide you in choosing the best and most appropriate insurance policies for your evaporated milk production company.

Here are some of the basic insurance covers that you should consider purchasing if you want to start your own evaporated milk production company in the United States of America;

  • General insurance
  • Health/Medical insurance
  • Liability insurance
  • Workers compensation
  • Overhead expense disability insurance
  • Business owner’s policy group insurance
  • Facility/Building insurance

10. Protect your Intellectual Property With Trademark, Copyrights, Patents

If you are considering starting your own evaporated milk production company, you may not have any need to file for intellectual property protection. This is because the nature of the business makes it possible for you to successfully run it without having any cause to challenge anybody in court for illegally making use of your company’s intellectual properties.

But if you just want to protect your recipe, your company’s logo and other documents or software that are unique to you or even jingles and media production concepts, then you can go ahead to file for intellectual property protection. If you want to register your trademark, you are expected to begin the process by filing an application with the USPTO.

11. Get the Necessary Professional Certification

Before you can be permitted to operate an evaporated milk production company in the United States of America, you are expected to apply and obtain certain certification or permits. You are supposed to get clean health certificate; you are expected to have undergone dairy extraction training as well as obtain food handlers certificate.

You can also check up with your state or city to know if you will require a professional certification before you can be licensed to run your own evaporated milk production business. But you can be rest assured that the industry is highly regulated and you are expected to meet the required standard as stipulated by the regulating establishment bit at local and national levels.

12. Get the Necessary Legal Documents You Need to Operate

The requirements for running an evaporated milk production company vary widely from country to country, state to state and from city to city. For instance in Toronto, Canada, some of the requirements for evaporated milk production business include business and liability insurance, a food and drinks handler certificate, and a health inspection certificate especially for the cows that are going to be milked in the facility.

The essence of having the necessary documentation in place before launching a business in the United States of America cannot be overemphasized. It is a fact that you cannot successfully run any business in the United States without the proper documentations.

If you do, it won’t be too long before the long hand of the law catches up with you. These are some of the basic legal documents that you are expected to have in place if you want to legally run your own evaporated milk production business in the United States of America;

  • Business and liability insurance
  • Commercial Vehicle Operator’s Registration for distribution truck
  • Food and drinks handler certificate
  • Appropriate driver’s licenses for drivers
  • Assistant’s licenses for assistants
  • Health inspection Certificate
  • Proof of ownership, proper identification and vehicle license
  • Depot, commissary or service support facility meets vending unit operation needs
  • Copy of license for the service support facility and/or a recent inspection report
  • Tax Payer’s ID
  • Fire certificate
  • Plant insurance
  • Certificate of Incorporation
  • Business License
  • Business Plan
  • Non-disclosure Agreement
  • Employment Agreement (offer letters)
  • Employee’s Handbook
  • Operating Agreement for LLCs

13. Raise the Needed Startup Capital

It is often said that money is the blood of any business, so raising startup capital is perhaps one of the major concerns for entrepreneurs as it can be challenging raising capital to launch a business idea. Your idea must be workable and promising for you to secure finance from financial institutions or from angel investors.

The first thing to put in place before sourcing for startup capital for your business is to draft a detailed business plan. With a good business plan, you can easily convince investors to invest in your business. The truth is that no bank can give you a loan if you don’t have a good and workable business plan. Besides, investors will not take you seriously if you don’t have a business plan.

Here are some of the options you can explore when sourcing for startup capital for your evaporated milk production company;

  • Raising money from personal savings and sale of personal stocks and properties
  • Raising money from investors and business partners
  • Sell shares to interested investors
  • Applying for loan from your bank
  • Pitching your business idea and applying for business grants and seed funding from donor organizations and angel investors
  • Source for soft loans from your family members and your friends

14. Choose a Suitable Location for your Business

When it comes to choosing a location for your evaporated milk production company, there are key questions you should answer and key factors that must be considered. You are expected to choose a location that is easily accessible especially as it relates to your distribution network and supply of raw materials. Affordability, availability of labor and safety are also some of the factors that you should consider.

Despite the fact that evaporated milk is consumed by all and sundry, it is important to choose a location that will give you economy of scales; a location that will give you leverage to favorably compete in the industry as a new entrant.

It cannot be overemphasized that the location you chose to launch your evaporated milk production company is key to the success of the business, hence entrepreneurs are willing to rent or lease a facility in a visible location; a location where the demography consists of people with the require purchasing power and lifestyle.

If you make the mistake of renting or leasing a facility for your evaporated milk production company in a not too visible or hidden location simply because it is cheap, then you must be prepared to spend more in promoting the business.

It is important to note that a business facility in good location does not come cheap hence you should be able to allocate enough fund for leasing / renting in your budget. If you are new to the dynamics of choosing a location for your business, then you should feel free to talk to a business consultant or a realtor who has a full grasp of the city and perhaps country you intend starting your evaporated milk production company.

Most importantly, before choosing a location for your evaporated milk production company, ensure that you first conduct a thorough feasibility studies and market survey. The possibility of you coming across similar business that just closed shop in the location you want to open yours can’t be ruled out.

15. Hire Employees for your Technical and Manpower Needs

When it comes to starting an evaporated milk production company, you should make plans to build a standard evaporated milk plant. A standard evaporated milk plant includes refrigerated tank trucks, pasteurizers, evaporating machine/steamer, milk extractor, stirring tank, bottling / canning machines, a mini lab and good drainage system. So, you are expected to put all this equipment and machine in place and also purchase standard distribution trucks.

Although you can get fairly used of the above listed equipment and machines, but it is advisable to go for new and latest machines and equipment that can serve you for a long time especially if you have the finances to make the purchase. Even if you don’t have the required amount, you can enter an agreement with the suppliers to spread the payment over a period of time.

As regard acquiring a facility, if you have the required finance, it is to your advantage to acquire a property or lease a facility to be used for your evaporated milk production plant; it usually gives you the freedom to design the facility the way you want to it to be. But if you are low on cash, then you don’t have any option other than to rent a facility.

When it comes to creating a workforce structure for your evaporated milk production company, then you should look towards getting qualified and competent people to fill the following roles; Chief Executive Officer (Owner), Plant Manager, Human Resources and Admin Manage, Quality Control Manager, Lab Technician, Merchandize Manager, Sales and Marketing Manager, Accountants/Cashiers, Production Workers/Machine Operators, Distribution Truck drivers, and Cleaners.

You will need a minimum of 15 – 20 staff members to successfully run a small scale but standard evaporated milk drink production company.

The Services Delivery Process of the Business

The production of evaporated milk starts with the raw milk being transported from the dairy farm to the plant in refrigerated tank trucks. At the plant, the milk is tested for odor, taste, bacteria, sediment, and the composition of milk protein and milk fat. The composition of protein and fat is measured by passing the milk under highly sensitive infrared lights.

The next step is that the milk is channeled through filters and into the pasteurizers. At this point, the milk is quickly heated in one of two ways. The High Temperature Short Time method (HTST) subjects the milk to temperatures of 161 °F (71.6°C) for 15 seconds. The Ultra High Temperature (UHT) method heats the milk to 280°F (138°C) for two seconds.

Basically, these two methods increase the milk’s stability, decrease the chance of coagulation during storage, and decrease the bacteria level.

The next step is that the warm milk is channeled to an evaporator. Through the process of vacuum evaporation, (exposing a liquid to a pressure lower than atmospheric pressure) the boiling point of the milk is lowered to 104-113°F (40-45°C). As a result, the milk is concentrated to 30 – 40 percent solids. Also, the milk has little or no cooked flavor.

Thereafter, the milk is then homogenized by forcing it under high pressure through tiny holes. This breaks down the fat globules into minute particles, improving its color and stability. Pre-measured amounts of a stabilizing salt, such as potassium phosphate, are added to the milk to make it smooth and creamy. This stabilization causes the milk to turn a pale tan. The milk is passed under a series of ultraviolet lights to fortify it with Vitamin D.

Lastly, the milk is channeled into pre-sterilized cans that are vacuum-sealed and then packaged for distribution. Please note that the milk is taste-tested by the quality control department for freshness before it leaves the dairy farm and again when it arrives at the processing plants.

16. Write a Marketing Plan Packed With ideas & Strategies

It is an established fact that running a business requires that you should be proactive when it comes to marketing your goods or services. If you choose to launch an evaporated milk production company, then you must go all out to employ strategies that will help you attract customers or else you will likely struggle with the business because there are well – known brands that determine the market direction for dairy product production industry.

People will purchase your evaporated milk if they know that they are going to get the best and of course value for their money. Your marketing strategy should center on quality, and pricing, and above all excellent customer service. The truth is that if you are able to put the above stated in place, you won’t struggle to retain your old customers and at the same time win over new customers.

Businesses these days are aware of the power of the internet and which is why they will do all they can to maximize the internet (videos/YouTube) to market their services or products. In other words, a larger percentage of your marketing effort will be directed to internet users.

These are some of the marketing ideas and strategies that you can adopt for your evaporated milk production company;

  • Introduce your evaporated milk production company by sending introductory letters alongside your brochure to restaurants, hotels, retailers, households and other key stake holders throughout the city where your evaporated milk production company is located and distributed.
  • Advertise on the internet on blogs and forums, and also on social media like Twitter, Facebook, LinkedIn to get your message across
  • Create a basic website for your business so as to give your business an online presence
  • Directly market your products
  • Engage in road shows in targeted communities from time to time to promote your evaporated milk production company
  • Join local evaporated milk production company associations for industry trends and tips
  • Advertise our business in community based newspapers, local TV and radio station
  • List your business on yellow pages ads (local directories)
  • Encourage the use of word of mouth marketing (referrals)

17. Work Out a Reasonable Pricing for your Services & Products

One key factor that will help you sell your evaporated milk at rock bottom prices is to own your dairy farm. The truth is that you stand the chance of cutting cost dramatically if you extract raw milk from your dairy farm. Another strategy that will help you retail your evaporated milk at the right price is to ensure that you cut operational cost to the barest minimum and channel your efforts towards marketing and promoting your brand name.

Aside from the fact that this strategy will help you save cost, it will also help you get the right pricing for your products. You can also try as much as possible to work with independent contractors and marketers; with that, it will help you save cost for paying sales and marketing executives.

18. Develop Iron-clad Competitive Strategies to Help You Win

The availability of different sizes of evaporated milk, your business process and of course your pricing model are part of what you need to stay competitive in the industry. Another possible competitive strategy for winning your competitors in this particular industry is to build a robust clientele base.

Over and above, ensure that your organization is well positioned, key members of your team are highly qualified and your product can favorably compete with the some of the best in the evaporated milk production line of business.

19. Brainstorm Possible Ways to Retain Clients & Customers

When it comes to business, no matter the industry that you choose to pitch your tent in, one of the easiest ways to increase customer retention and perhaps attract new customers is to produce results and satisfy your customers always. If your customers are satisfied with your products, they can hardly source for alternative products.

Statistics has it that one of the major reasons why clients source for alternative products is when there is a drop in quality or hike in price. Ensure that you offer your customers incentives if you want to retain them and of course continue to generate repeated sales from them and also to attract new customers.

Part of what you need to do to achieve this is to track progress, results or outputs with the aim of improving on them quickly as the case demands. When it comes to managing your customers, and building loyal clientele base, you should purchase a customized CRM software.

With a customized CRM system, you can easily stay in touch with your clients (you can carry out quick surveys, you can introduce new products and prices to them without any hitch, you can felicitate with them on their birthdays and other anniversaries, you can keep track of their progress, you can send bulk sms and customized emails and above all, you can easily receive compliant and feedback from them).

20. Develop Strategies to Boost Brand Awareness and Create a Corporate Identity

If you are in business and you are not deliberate about boosting you brand awareness and communicating your corporate identity, then you should be ready to take on whatever the society portray your business to be. One of the secrets of larger corporations is that they are willing to spend fortunes to boost their brand awareness and to continue to communicate their corporate identity the way they want people to perceive them.

If your intention of starting an evaporated milk production company is to grow the business beyond the city where you are going to be operating from to become a national and international brand by opening chains of distribution network and franchising, then you must be ready to spend money on promotion and advertisement of your brand.

Here are the platforms you can leverage on to boost your brand awareness and create corporate identity for your evaporated milk production company;

  • Place adverts on both print (newspapers and food and drink magazines) and electronic media platforms
  • Sponsor relevant community based events/programs
  • Leverage on the internet and social media platforms like Instagram, Facebook, Twitter, YouTube, Google + et al to promote your evaporated milk production company – brand
  • Install your Billboards in strategic locations all around your city or state
  • Engage in roadshows from time to time in targeted neighborhoods to create awareness of your evaporated milk production company – brand
  • Distribute your fliers and handbills in target areas
  • List your evaporated milk production company in local directories / yellow pages
  • Advertise your evaporated milk production company in your official website and employ strategies that will help you pull traffic to the site.
  • Position your Flexi Banners at strategic positions in the location where your evaporated milk production company is located.
  • Ensure that all your staff members wear your branded shirts and all your vehicles and trucks/vans are branded with your company logo.