Dairy Products

Payment Behaviour Analysis: Dairy products Sector

This report presents a detailed analysis of payment behaviour within the Dairy products sector, based on a sample of 16 companies. The data reveals a remarkably consistent payment culture, characterised by a strong central tendency. The average payment time stands at 36.6 days, aligning almost perfectly with the median of 36 days. This proximity between the mean and median suggests a symmetrical distribution with minimal skew, indicating that payment practices are standardised across the sector. Furthermore, the standard deviation of 11.4 days is relatively low, implying that volatility is contained and financial controllers within this industry tend to adhere to similar payment schedules. Consequently, suppliers trading with this sector can reasonably predict cash flow outcomes, as the risk of extreme deviation from the 36-day norm is minimal.

When we analyse the distribution and quartile data, it becomes evident that the Dairy products sector favours a 'Moderate' payment speed. A significant majority of the companies (62.5%) settle their debts within the 31-45 day window. The interquartile range spans only 12 days (from 31 to 43 days), reinforcing the view that this sector operates within a tight, predictable band. Whilst there is a cohort of 'Fast' payers (18.8%) settling within 30 days, an equal percentage falls into the 'Slow' category (46-60 days). Notably, the analysis highlights a complete absence of companies in the 'Very Slow' or 'Critical' categories (61+ days). This is a positive indicator of sector health, suggesting that liquidity issues or deliberate delaying tactics are not systemic problems amongst these businesses.

Despite the stability in company-level averages, it is crucial to realise that invoice-level performance shows slightly more variance. Specifically, 46% of invoices are paid within 30 days, which is a higher proportion than the company averages might suggest. However, the prevalence of late payments remains a metric to monitor, standing at 27.9%. Although no companies fall into the critical risk category—with the slowest payer recorded at 54 days and the fastest at a commendable 8 days—suppliers should still account for the fact that roughly one in four invoices may settle beyond agreed terms. The absence of outliers beyond 90 days signals a low credit risk environment, where bad debt exposure is significantly minimised compared to more volatile industries.

Geographically, the sample shows a distribution that does not centre heavily on the capital, with only one company located in London. Instead, there is a stronger presence in the South West (4 companies), followed by Yorkshire and The Humber and the North West (3 companies each). This regional spread suggests that the payment behaviour observed is not merely a reflection of London-centric corporate policies but is representative of broader regional practices. In summary, the Dairy products sector demonstrates a mature and reliable payment profile. Whilst it does not specialise in rapid settlement, it offers stability and predictability, allowing supply chain partners to organise their ledgers with a high degree of confidence.