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Functionality belying whey commodity concerns - analyst

By Neil Merrett , 30-Mar-2009
Last updated on 31-Mar-2009 at 13:02 GMT2009-03-31T13:02:00Z

Demand for whey-derived functional food and drinks claiming nutritional benefits remains undimmed despite an overall fall in sales last year for the dairy commodity, says an industry analyst.

Although Asian concerns over melamine contamination in milk-based products had hit global demand for whey and lactose in 2008, the market for branded goods that play up the functionality of these ingredients was said to have remained buoyant, according to Proteus Insight.

The analyst, which specialises in milk products, says the Asian markets that have been a central driver for global whey and lactose consumption in recent years posted a 10 per cent fall in 2008 volumes over the previous year.

“The impact of the melamine scandal in China had a significant impact on demineralised whey consumption as overall infant formula powder consumption declined by up to 20 per cent on 2007,” stated Proteus in its most recent report into the ingredients.

Despite whey and lactose’s position in the commodities market, the analyst suggested that the industry’s attempts of playing up use of more functional forms of the products in branded goods had been more successful.

Although Proteus predicts that Asian demand for whey and lactose is likely bounce back and become a major global market for the product again, a spokesperson for the group said that some stability was being provided by functional foods.

The whey ingredients industry stated last year that targeting its goods to final product makers such as Kraft Foods in attempts to play up any health or functional consumer benefits would be a key focus up to 2011.

With dairy companies increasingly looking to make use of functional ingredients, the whey industry believes it has to do more to court leading food manufacturers to boost acceptance and, more crucially, sales of its products.

Speaking following the most recent International Whey Conference held in Paris during October, Dan Meyer of the American Dairy Products Institute (ADPI) said multinational manufacturers needed to show greater awareness of the ingredients’ potential health benefits.

Although Proteus claimed that it didn’t expect a major chocolate manufacturer to redesign its packaging to make a big deal of using whey in a commodity sense to offer a particular taste, there were already some signs of functional promotion.

“Sports nutrition, adult and infant nutrition [products] already play this up to an extent,” stated the group spokesperson. “Multinational’s like Powerbar [can been seen doing this] with whey products that are still maintaining a buoyant price compared to the commodity side.”

Outside of difficulties for whey commodities used to replace milk on Asian markets, the segment in Europe is thought to have stayed stable by comparison.

However, difficulties may yet occur is milk prices continue to fall, leading to the possibility of culled herds that could hit the market, stated the analyst.

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