current and future trends for the dried milk & whey ... · pdf filemanaged by dairy...
TRANSCRIPT
Managed by Dairy Management Inc.™
Current and Future Trends for the Dried
Milk & Whey Products Market
Veronique Lagrange, US Dairy Export Council
March 23, 2015
• Dairy ingredient trade: size of the business
• Recent trends
• Whey proteins: a case study
• Geographic demand drivers
• Functional demand drivers
• What drives value
• Consumers and proteins: US market insights
• Conditions for future growth
Agenda
2
Size of the Dairy Ingredient Trade in Value, 2014E(excludes intra EU Trade)
3
Ingredient
2014 Est. Value of
Imports* in Euros (Billion)
SMP 5,2
WMP 7
Caseins 1,6
Lactose 0,7
Whey, WPC, WPI 2,5
MPC* 0,7
Note: Total value of all reported imports in 2014--November and
December estimated. Excludes intra-E.U. trade.
Source Global Trade Atlas, Global Trade Information Services, Inc.
* May include other ingredients traded under the same H.S.
codes—see final slide for listing of H.S. codes used.
Size of the Dairy Ingredient Trade in Volume, 2014E
(excludes intra EU Trade)
4
Ingredient Volume of Imports* in mt
SMP 1.574.668
WMP 1.750.344
Caseins 218.799
Lactose 530.575
Whey, WPC, WPI 1.402.959
MPC* 199.586
Total volume of all reported imports in 2014--November and
December estimated. Excludes intra-E.U. trade.
Source Global Trade Atlas, Global Trade Information Services, Inc.
*May include other ingredients traded under the same H.S.
codes—see final slide for listing of H.S. codes used.
Evolution over past 6 years: steady growth of trade
volumes
5
Note: Total value of all reported
imports in 2014--November and
December estimated. Excludes
intra-E.U. trade.
Source Global Trade Atlas,
Global Trade Information
Services, Inc.
Year to year variations, and across markets, but steady
trends
6
Note: Total value of all reported
imports in 2014--November and
December estimated. Excludes
intra-E.U. trade.
Source Global Trade Atlas,
Global Trade Information
Services, Inc.
High protein ingredients “value-pull”: average prices
doubled in 5 years
7
Adding value to a product stream: Whey as a
case study
8
9
-
100,000
200,000
300,000
400,000
500,000
600,000
700,000
800,000
WPI
WPC80
WPC34
Sweet whey
Product Portfolio Increasingly Dedicated to Value-
added Products (40% vs. 27% ten years ago)
Source: US Department of Agriculture (USDA). Data is actual production reported (not
converted to sweet whey equivalent. Note: Excludes permeate production data.
40%
Sweet Whey Reaching Record Lows
475,000
515,000
490,000
470,000 474,000
502,656 513,639
490,105
453,525 458,895 457,583
453,097
435,916
393,777
350,000
400,000
450,000
500,000
550,000
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014P
U.S. Production Dry Sweet Whey (mt)
Dry Sweet Whey Linear (Dry Sweet Whey)10Source: USDA
WPC34 Production: Slight Rebound Driven by GUM/FOF
Demand
123,105 125,200
134,752
116,898
134,141
118,209
110,820 109,527
115,441117,670
132,556
80,000
90,000
100,000
110,000
120,000
130,000
140,000
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014(P)
U.S. Production of WPC34 (mt)
WPC34 Linear (WPC34) 11Source: USDA
38,097
48,719
59,006 61,397 66,407
69,948
83,155 85,831
92,975
108,061 113,771
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000
100,000
110,000
120,000
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014(P)
U.S. Production of WPC80 (mt)
WPC80 Linear (WPC80)
WPC80 Continues to Rise: ~x3 in Ten years
12
Source: USDA
WPI: x3 in 10 years, additional production in 2015
12,538 12,501 13,894
17,781 19,873
23,448
27,598 27,447 29,395
39,502 38,032
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014(P)
U.S. Production of WPI (mt)
WPI Linear (WPI ) 13Source: USDA
-
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
2009 2010 2011 2012 2013 2014
Volume Value
US Value of Whey Portfolio Doubled in 5 years, flat
volumes (based on value of exports, Source USDA)
14
15
Demand Drivers
Top 5 Importers,
2014E
WMP SMP WHEY, WPCs,
WPI
LACTOSE CASEIN/CASEINAT
ES
MPCs
China/
Hong Kong
670,857 mtChina
81,326 mt Hong Kong
252,840 mtChina
417,109 mtChina
84,855 mtChina
15,449 mtChina
North Asia 69,938 mt
Japan
13,510 mt
Japan
28,369 mt
South Korea
SE Asia 85,231 mtSingapore
124,727 mtIndonesia
120,023 mtMalaysia
81,800 mtIndonesia
66,468 mtMalaysia
Other Asia 23,577 mtIndia
MENA 204,310 mtAlgeria
167,739 mtAlgeria
19,374 mtMorocco
United States 86,566 mtUnited States
38,718 mtUnited States
Mexico 181,694 mtMexico
28,808 mtMexico
15,643 mtMexico
9,020 mtMexico
Latin America 135,539 mtVenezuela
EU/Other 98,832 mtE.U. 28
115,761 mtRussia
24,483 mt
E.U. 28
New Zealand 71,719 mtNew Zealand
30,847 mtNew Zealand
#1 Market for this ingredient
Top 5 Market for this ingredient
Geographic Demand Drivers
17
Functionality/ Applications Demand Drivers (examples)
China/
Hong Kong
North Asia
SE Asia
Other regions
MENA
Photos: Courtesy GEO NIRO, Getty Images, Dreamstime Inc, others 2015
Segment Demand Drivers: Nutrition (examples)
SportsMeal Replacements
Medical Nutrition
Low birth weight
Stunting Prevention
Cognitive Growth
Supplements
• Functionality and consistency of
performance
• Microbiological quality
• Traceability
• Health benefits
• Flavor
• Extended shelf-life
• IP, Organic
19
Value Drivers
Photo courtesy: DFA, USA
20
A few insights in the US consumer
Timing:
Online data collection, conducted
September 18 – 29, 2014
Sample:
In total, n=763 respondents, completing a
25-minute self-administered online survey
All respondents met the following criteria:
• Adults, age 18+, with the following
quotas set to reflect census:
• Males (50%) and females (50%)
• No household member employed in
sensitive occupations
Overall Attitudes toward ProteinPositive and remain consistent with earlier research
21
61%
59%
58%
57%
57%
55%
54%
53%
53%
52%
44%
38%
35%
28%
26%
23%
15%
11%
64%
59%
62%
59%
56%
56%
58%
55%
51%
55%
47%
46%
31%
22%
25%
18%
10%
10%
Total 2014 Total 2011
Protein and calcium work together to build a strong skeleton
Milk is a good source of protein
It is important to get protein throughout the day
Protein is associated with energy
Protein is associated with muscles
Protein is an important part of my diet
Proteins from different sources have different nutritional values
Breakfast is the most important time of day to eat protein
Foods containing protein make me feel full longer
Protein plays an important role in weight management
Products high in protein taste good
I get enough protein in my diet
I look for products containing protein
Eating too much protein is dangerous
Products with high protein content are often high in fat
I would pay more for a product with added protein
Women shouldn't eat too much protein or their muscles can get bulky
Protein is just for bodybuilders
Attitudes Toward ProteinTop 2 Box Scores; 7-point Agreement Scale
Overall Attitudes Toward Protein
Significant difference at 95% Confidence Level
74%
21%
20%
19%
13%
10%
8%
7%
7%
6%
6%
4%
3%
3%
3%
13%
5%
75%
26%
21%
16%
12%
12%
11%
6%
5%
8%
4%
3%
3%
2%
1%
9%
5%
Total 2014 Total 2011
Meat/poultry/fish/shellfish
Egg whites/albumin
Lentils/beans
Nuts (unspecified)
Milk
Cheese (unspecified)
Peanut butter
Protein bars/shakes/powders
Dairy products (unspecified)
Soy protein
Vegetables (unspecified)
Legumes
Yogurt
Peanuts
Whey protein
Other
Nothing
Significant difference at 95% Confidence Level
Unaided Awareness of
Protein Sources% All Mentions - Open End
(Unaided) Awareness of Protein SourcesVarious animal proteins remain top-of-mind sources for consumers; dairy products are mentioned at a
lower level. Unaided mentions of whey protein increased significantly (compared to 2011), though
overall awareness remains very low.
22
Similar to protein, top perceived benefits associated with whey protein include building/ maintaining muscle and providing energy
throughout the day. Many also cite whey protein’s ability to help achieve a balanced diet, maintain healthy bones & joints, and
prevent muscle loss during aging.
23
Benefits Whey Protein Can Provide(% Mentioned, Multiple Mentions)
44%
44%
43%
41%
41%
38%
37%
37%
35%
35%
35%
34%
33%
30%
20% 30% 40% 50% 60%
Helps build and maintain muscle
Helps you achieve a balanced diet
Helps maintain healthy bones and joints
Helps give you energy throughout the day
Helps prevent muscle loss during aging
Helps give you more endurance/stamina when exercising
Helps you stay active as you get older
Helps speed up metabolism and burn more calories naturally
Helps muscles recover more completely/quickly after exercise
Helps keep you from feeling hungry between meals
Helps prevent bone loss during aging
Helps you improve core strength
Helps increase lean muscle mass, definition not bulk
Helps you burn fat and lose weight
2014 Total
Perceived Benefits Provided by Whey Protein
• Affordability
• Non-dairy substitutes
• Local production/self-
sufficiency
• Consumer concerns,
misconceptions
• Supply chain, tariff and non-
tariff trade barriers
• Regulations: labeling,
restrictive marketing codes
24
What Could Slow Dairy Trade Growth?
• Production technologies,
innovation in manufacturing
• Health policies: intake
recommendations (seniors,
PLW, malnourished)
• DIAAS Protein Quality Score:
dairy 25-30% superior to soy,
other non-dairy sources
• New health findings:
microbiome, cognitive
development, role of Type II
minerals, etc.
25
What will secure dairy’s position?
Sources: Deglaire A & Moughan PJ. (2012). Animal models for determining amino
acid digestibility in humans – a review. Brit J Nutr, 108 (Suppl S2); 273-81. FAO
(2013). Food and Agriculture Organisation of the United Nations. Dietary protein
quality evaluation in human nutrition. Report of the Expert Protein Consultation.
Rome, 2013.
26
Questions?
27
Product* HS Code HS Description
Whole Milk Powder 0402.21 and 0402.29 Milk and cream in powder, granules or
other solid forms, of a fat content, by
weight, exceeding 1.5% (sweetened
and unsweetened)
Skim Milk Powder 0402.10 Milk and cream in powder, granules or
other solid forms, of a fat content by
weight not exceeding 1.5%
Milk Protein Concentrate 0404.90 Products consisting of natural milk
constituents, whether or not containing
added sugar or other sweetening
matter, with up to 90% protein
Whey and Whey Protein
Concentrate
0404.10 Whey and modified whey, whether or
not concentrated or containing added
sugar, with up to 80% protein; includes
whey permeate
Whey Protein Isolate 3502.20 Milk albumin, including concentrates of
two or more whey proteins, with greater
than 80% protein
Lactose 1702.11 and 1702.19 Lactose and Lactose syrup
Caseins 3501.10 and 3501.90 Casein and Caseinates
*These labels cannot be considered exact, due to overlap of product categories and the presence of reporting
errors. For example, Milk Protein Concentrate is especially elusive because countries classify it in different
ways, some placing it under 3504.90 or 3501.90, ‘Caseinate’.
