Onto the Silver Lining
The dynamic milk processing industry is meeting the demands of new demographics in China.
The third Tetra Pak Dairy Index, published in July 2010, found ageing populations, increasing urbanization and a growing global middle class to fuel the change in the dairy industry.
According to the World Bank, the world's population of 60 years and above is set to expand from around 739 million to two billion by 2050. With strong economic growth that brings prosperity, China's population is living longer. In July 2010, the Xinhua News Agency reported that China's over-60 population is rising at its fastest rate ever, growing by 7.25 million people in 2009 of a total population of nearly 165 million.
Food becomes part of a wider lifestyle choice for people as they grow older. Research from GfK Roper Reports Worldwide shows that across the globe, consuming something tasty is the second most popular indulgence in people aged over 60 years. Functional foods are becoming important for them, as products targeted at this discerning 'grey market' include fortified milk with added calcium, vitamins and minerals, and healthful treats.
While China's population growth has slowed down, it still increases by between 12 and 13 million people a year, which is almost equivalent to the population of Cambodia, and it is creating opportunities in the youth market. The nutritional benefits of milk as part of a child's healthy diet are also driving sales in the country. Children's milk (with added vitamins) now totals 365 million liters a year and constitutes 4% of the entire white milk market. The school-milk drinker base has also expanded by 20%, from 3.9 million students a day in 2008 to 4.7 million in 2009.
Today, cities are home to 3.25 billion people, and this number is expected to rise to about six billion by 2050. In China, city dwellers are set to outnumber the rural population by 2013 as they are found to drink more milk than their rural counterparts. Generally higher levels of education, prosperity and a faster pace of life among the Chinese are creating a demand for a wider range of safe milk products such as fermented yogurt drinks and lactose-reduced milk that are conveniently packaged to suit their busy lifestyles. In 2009, the volume of ultra high temperature (UHT) products increased by nearly 10%, yogurt drinks rose by 15% and pasteurized milk by 18%.
Despite the expansion of cities, 600 million people still live in rural areas. They earn less than a third and consume 10% of the liquid dairy products (LDP) their urban counterparts drink. The disparity is growing but the milk processing industry can develop this largely untapped market by educating rural consumers about the nutritional benefi ts of milk and the LDP options available.
The World Bank forecasts that the middle class will increase from 430 million in 2000 to 1.15 billion in 2030. In China, this population segment is expected to expand from 43% of the population to over 75% by 2025, delivering higher education levels, unprecedented prosperity and greater expectations of LDP. The McKinsey Global Institute also predicts that the country will be the third largest consumer market based on purchasing power by 2025.
These figures have sent dairy producers offering an array of premium LDP such as drinking yogurt, as well as fortified and flavored milk. Between 2006 and 2009, flavored milk sales in China rose by 4.7% and in 2009, premium white milk products accounted for almost 20% of total revenues within the milk market.
Products targeting the middle classes include MengNiu's long life 'Milk Deluxe,' which contains high-quality raw milk and is sold in 250ml packages. In 2009, YiLi's lactose-reduced white milk YingYangShuHua was another middle class market success story.
Due to increased consumption, the Chinese government is encouraging the dairy industry to reduce both its resource consumption and waste generation. Tetra Pak for example employs approaches such as Tetra Lactenso solutions, which customize production based on needs in order to use less water and energy and produce less product waste.
To maximize the goodness of milk, new hybrid products that combine milk with other ingredients are introduced to cater to China's diverse tastes and demand for healthy drinks. Between 2005 and 2007, this market segment had a compound annual growth rate of over 12% and it is set to double in size between 2005 and 2012.
These products combine milk with ingredients such as black beans, rice, wheat, peanuts, nata de coco, almonds and corn. Tetra Pak has for example worked with China's Bright Company on its Hi You product range, which is a drinking yogurt containing milk, coconut and fruit targeted at the middle class market. The integration of two processing lines is used to obtain product quality and performance.
Global trends, local solutions
Based on what is happening in China, Asia can learn to appreciate the global trends that impact the local market in different ways. While the conditions may differ from one market to another, milk continues to meet the needs of Asia's rapidly changing populations, and the dairy processing must be as dynamic and flexible as the markets it serves in order to thrive.
On the Milky Way
Compared to other functional ingredients and liquid milk, consumers tend to perceive functional dairy-based products as natural and healthy.
BY JENS BLEIEL, CEO, FOOD FOR HEALTH IRELAND
The nutritional advantages of milk and dairy products have been widely documented and relatively small quantities of milk can provide a substantial proportion of daily nutrient requirements for all. One of the most nutritionally complete foods available, milk provides nutrients that are essential to the growth, development and maintenance of the human body and it contains no artificial preservatives or colorings. It is rich in nutrients and has significant levels of calcium and essential vitamins and other minerals. It is also an ideal source of bioactive compounds with potential health benefits.
Despite the goodness milk offers, the per capita consumption of liquid milk and dairy in Asia is relatively low compared to Europe and the US. However, Asia's dairy demand has been expanding dramatically in the last few years. According to a 2003 report in the Journal of Nutrition, as populations in developing countries become more urbanized and incomes rise above the poverty level, more people will be adding variety to their diets by consuming more animal products.
Analysts at Leatherhead Food International predict that the average annual growth for the milk market until 2013 to be at 7.3% in Asia and 4.2% in Western Europe. By 2020, developing countries are expected to consume 177 million metric tons (mt) more milk than they did 10 years ago. This will be most evident in East Asia, particularly China. Data from the FAO on the per capita consumption of milk consumed by developing countries rose from 34% in the early 1980s to 44% in the late 1990s. While consumer awareness of dairy remains low in some emerging markets, including Asia, it is not expected to be a barrier to the long-term spread and development of dairy products. Additionally, consumers' unfamiliarity with dairy can pose problems with lactose intolerance in certain countries. Approximately 70% of the global population has low levels of lactase but not all experience lactose intolerance. The highest rates of lactose intolerance tend to be found in South America, Africa and Asia, with approximately 50% of the population affected and almost 100% in some Asian countries. While lactose activity declines with time in all populations, ethnic groups tend to lose lactase activity more quickly than other demographics.
The Dairy Council in April 2010 said Chinese and Japanese lose 80- 90% of lactase activity within three to four years after weaning, Jews and Asians lose 60-70% over several years post weaning and white Northern Europeans may take up to 18-20 years for lactase activity to reach its minimal expression.
Recent market analysis by Danish food and drink industry consultancy 3A Business Consulting indicates that the global market for dairy-derived functional extracts continues to expand at a healthy rate of 10-20% year on year. Barring the potential issue of lactose intolerance, this growing market can take advantage of the fact that, when compared to other functional ingredients and liquid milk, consumers tend to perceive functional dairy-based products as natural and healthy.
Mining for bioactive gold
The global dairy industry needs to gain a better understanding of the chemical and physical properties of milk to maintain the public's perception of milk as beneficial to their health. This would also add value to traditional products to alleviate global issues such as obesity. Food for Health Ireland (FHI), an organization created by four research institutions, four dairy companies and funded by the Irish Government, is taking a research approach to the development of functional foods.
Using milk as the source material, its research team extracts fractions to potentially provide a pipeline of, as yet, uncharacterized bioactive substances. FHI's research platform, known as Intelligent Milk Mining, focuses on the systematic deconstruction of milk to find nutritional solutions to health issues such as obesity, diabetes, immunity/infection, heart health and infant development.
Initially focusing on the extraction of proteins, the program combines recent advances in milk genomics and proteomics research in search for bioactive peptides that have, until now, been hidden within the complex milk protein structure. Exploiting the recent publication of the bovine genome, this bioinformatics data is used with traditional methods of enzymatic hydrolysis and fermentation by food-grade lactic acid bacteria to deconstruct milk more efficiently, as well as to exhaust the potential for novel bioactives.
To achieve the maximum benefits from identified bioactive peptides, it is essential to isolate them and characterize their structures, functions and expression profiles. This identifies the bioactive amino acid sequence of interest and establishes the method of action. Furthermore, the characterization of bioactive peptides can lead to the development of encapsulation methods and the formulation of tasty, functional food products. Besides safety, bioavailability and efficaciousness of the compounds, they also need to ensure effective human delivery and suitability for general consumption.
FHI's links to four dairy processing companies Carbery, Glanbia, Kerry Group and Dairygold have provided the organization a commercial outlook and expertise to complement its research program. With commercial success in mind, it studies the influence of the bioactives on the physiochemical, the sensory properties of the final product and its potential in certain market segments.
Evidence suggests that consuming milk and dairy products provides us with more than just dietary calcium. Milk is found to be an excellent source of essential minerals and vitamins to maintain bone health, immunity, healthy organ function and general human health and well-being. Enhancing beverages, juices and cereal bars with naturally-derived dairy bioactive compounds can also therefore help to solve some of Asia's most pressing health issues.
Improve the nutritional profile of dairy products with functional ingredients.
BY STEPHEN COPE, FOOD TECHNOLOGIST, DANISCO (UK)
Driven by consumer demand, food and beverages that offer health and nutritional benefits are growing fast in the market today. Consumers also view food both as a cause and solution to 'lifestyle' related health issues.
Functional foods have of late attracted much attention in the industry. While there is no one universally accepted definition for the term 'functional food' or 'functional ingredient', companies have generally described them as "foods and supplements providing health benefits beyond those associated with basic nutrition".
The functional digestive product claims used today include 'probiotics', 'prebiotics' and 'dietary fiber'. Probiotics and prebiotics affect the bacterial population in the gut, especially the colon. The former are live cultures that survive the stomach acids and change the composition of the colonic micro flora. On the other hand, prebiotics are fermented ingredients that encourage changes in composition and/or activity of the gastrointestinal micro flora that benefit one's health and well-being.
Dietary fiber is found to help maintain health and prevent diseases. Fiber-rich diets may help to reduce the risk of obesity, colon cancer and heart disease, as well as to minimize the occurrence of constipation, irritable bowel syndrome, diverticulosis and other digestive disorders.
According to GNPD, the number of new product launches with 'functional digestive' claims in the dairy industry has increased over the last 15 years (see Table 1), with a slight decrease in 2009.
Interestingly, these claims were mainly used on spoonable yogurt and drinking yogurt products. This leaves room for products with digestive health benefits in other dairy applications areas such as milk and dessert products.
Danisco's specialty carbohydrates can for example be easily incorporated into dairy products, resulting in improved nutritional profiles. They can either be used alone or in dairy applications to offer products with digestive health benefits. The finished products often do not contain added sugar, have reduced calorie, are low glycaemic, and allow product innovation in more health categories, but without compromising on product taste, appearance, flavor, texture and mouth feel.
Consider the factors listed below when selecting a functional ingredient for a food application.
The ingredient should be suitable for a particular food application. It should not have a negative impact on color, taste, texture and flavor of the product. It should also be permitted for use in the food.
The dosage required by the product for digestive benefit has to be low enough to facilitate the incorporation of an adequate amount into food. The ingredient has to be well tolerated for a safe, maximum daily consumption of the food.
Consider the stability of the product during its shelf life when deciding on the dosage for a digestive benefit. The ingredient should be stable over various pH and processing conditions, and in a range of dairy products.
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- MANH HUNG PHAM
- tETRA PAK CHINA
- JENS BLEIEL
- FOOD FOR HEALTH IRELAND
- STEPHEN COPE