Positioning for Growth

With over 3,000 identified components, milk is one of the densest forms of nutrition that provides one with essential amino acids, encourages the growth of the human body and promotes health and wellbeing. With rising income and a wide variety of diets, there is a growing trend of nutrient-dense foods in Asia.

A report by Denmark-based research company 3A Consulting found that the consumption of dairy in Asia Pacific has been growing at 5% per annum between 2005 and 2008. The region is stated to be the single largest milk ingredients market in the world at a value of $7 billion in 2008.

To enter this potentially large market, dairy ingredient providers in Asia are developing products and ingredients that cater to local taste preferences. They are also tapping on current food trends and providing manufacturers with a point of difference in the market.

Dairy ingredient providers in Asia are developing products and ingredients that cater to local taste preferences. They are also tapping on current food trends and providing manufacturers with a point of difference in the market.

Trends in Asia

• Health and wellness
There has been a global move towards products that can boost one’s immunity and to protect him/her from ill health due to a busy lifestyle, insufficient exercise and the frequent consumption of fast food. In his annual trends report entitled 10 Key Trends in Food, Nutrition & Health 2009, publisher of New Nutrition Business Julian Mellentin cites digestive health as the key trend this year. He says products in this category make up the single largest segment of the functional foods market in Europe and Japan.

Dairy probiotics have shown to be effective in restoring and enhancing digestive health. In Japan, the market for probiotic dairy products topped $3 billion in 2005. By incorporating the bacterial cultures in one’s diet, probiotics provide benefits such as improved immune system function. There is also growing evidence that shows probiotics could prevent infants from developing allergies such as eczema (or atopic dermatitis).

Colostrum – the “first milk” produced by cows for their newborns – is also a product that could potentially see growing sales in Asia. It is a natural supplement that contains active antibodies and it provides nutritional and immunity benefi ts to health-conscious consumers.

By introducing higher levels of protein to common foods, satiety or a sense of being full can be created to control one’s appetite.

• Weight management
Even though Asia typically has lower rates of obesity when compared to Western countries, consumers are seeing weight management as an integral part of a healthy lifestyle that helps one prevent illnesses such as diabetes, stroke and heart disease.

Food manufacturers can ride on this trend by developing healthy products aimed at helping consumers to manage their weight or obesity challenges, which are normally addressed with reduced food intake and more exercise. The industry has also been focused on promoting products for specific diets, portion control and meal replacement. However, most consumers consider such products to lessen their enjoyment of food.

By introducing higher levels of protein to common foods, satiety or a sense of being full can be created to control one’s appetite without much sacrifi ce. Blundell and Dye’s research on satiety in 1998 has found that certain functional foods could help one control his/her appetite. Since then, research has shown protein, especially whey protein, to deliver a better satiety effect than other macronutrients such as carbohydrates.

In the manufacturing scene, Fonterra has introduced a functional dairy protein called ClearProtein to the market. It is a colorless and flavorless ingredient that is added to drinks such as bottled waters or sports drinks to help consumers manage their weight and maintain health and well-being.

• Clearer Labeling
Asians are demanding greater transparency in product labeling, reflecting a growing interest in the traceability and quality of food ingredients. When deciding on what to buy for their families, consumers would normally frown upon products with long lists of ingredients, especially those with scientific names.

On the regulatory front, a recent EAS report entitled Marketing Health Supplements, Fortified and Functional Foods in Asia, found that several Asian countries have either developed or are developing regulations on nutrition labeling. Countries such as Malaysia, South Korea and Taiwan now require the mandatory labeling of products, with Hong Kong enforcing this rule in July 1 next year.

• “Eating out” a way of life
One of the key challenges facing food companies today is to include healthy ingredients in convenience foods. The BIS Shrapnel report Foodservice Strategies in South East Asia 2006-2010 has found that most Asians eat out. “Generally people eat several meals or snacks a day with many of these meals consumed out of their homes,” states the report.

“People want their snacks to be as convenient, natural and healthy as possible,” adds Mellentin. This has resulted in a demand for preprepared, ready-to-eat, nutritious snacks and meals, thereby requiring manufacturers to provide flexibility in product functionality.

Dairy ingredients would enable manufacturers to deliver more protein in mainstream foods. Dairy-infused snacks such as mini pizzas, cheese bites and pastries are becoming increasingly popular in Asia as there is a growing awareness of the western cuisine, notes BIS Shrapnel.

• An aging population
As Asia faces the challenges of an aging population, dairy has assumed a significant role in addressing health risks such as osteoporosis and to satisfy changing nutritional needs. Besides beefing up on bone health, consuming protein enables the elderly to acquire adequate nutrition in order to maintain their muscle mass and stimulate muscle protein metabolism. As dairy protein is highly digestible, it is ideal for those who find digesting liquids easier than solids.

Fonterra’s functional dairy protein called ClearProtein is a colorless and flavorless ingredient that is added to drinks such as bottled water and sports drinks to help consumers manage their weight and maintain health and well-being.

Conclusion
Asia remains an important market for the dairy industry, and the functionalities of milk and new production technologies are able to fulfil the demands of new consumer food trends.

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Thriving Business

Sales in the US dairy market continue to increase despite concerns over the economy.

BY PMMI

PMMI's latest study Dairy Industry Market Research Study 2009 reveals that while the US dairy industry has been grappling with the aftermath of the economic downturn over the last two years, sales of dairy products increased by 2% last year – despite an overall price hike of 9%.

According to the International Dairy Foods Association, dairy continues to be the fourth-fastest growing grocery segment in the US – it is a $50 billion per year business of which almost 68% is dominated by 15 mega dairies (over 800 dairy cows). However, the industry also faces challenges such as uncertain availability of raw materials and price fluctuations, which are likely to intensify in the coming years.

A PMMI report says stronger dairy/vendor relationships are to be expected – about 90% of survey respondents rely upon machinery builders to train operators.

The report has found that:

• The US dairy industry anticipates a production shift to the West Coast, with industry consolidation creating more mega dairies,
• About 71% of dairy processors are likely to make capital expenditures for packaging equipment in the next 12 months; an additional 16% say they will make packaging line modifications that might require machinery investments,
• Stronger dairy/vendor relationships are to be expected: about 90% of survey respondents rely upon machinery builders to train operators; 73% want suppliers to play a more consultative role from concept stage to installation,
• Drivers to changing primary and secondary packaging demand include considerations about the most economical and environmentally-friendly materials, customer requirements and improving efficiency to address lower margins,
• Dairy processors see energy consumption important in achieving greater sustainability,
• Consumer demand for healthy, convenient and portable food is driving new packaging formats and industry segment growth.

www.pmmi.org