The use of whey and lactose ingredients in finished products will not be significantly set back by a shifting retailer focus towards budget-priced private label goods, according to one global dairy analyst.
Proteus Insight, which analyses the global cheese and whey markets, said that a recent slowdown in demand for the products, both as commodities and added-value ingredients, was not expected to become a long-term trend.
In a recent report into the whey and lactose product market, Proteus said that by the end of 2008, falling global demand from feeds suppliers looking for milk replacers and processors seeking added-value benefits from whey had led to falling prices.
In the EU, the analyst said that between early 2008 and 2009, falling demand for whey and lactose led to prices declining respectively from €600 and €560 per tonne to €450 and €330 per tonne.
A spokesperson for the analyst told FoodNavigator.com that despite the falls in value, whey and lactose products were here to stay in product formulation, even with retailer pressure on manufacturers to provide more budget-focused finished products.
“At the commodity end within food manufacturing using whey as a milk powder replacement, now is as good a time as any to incorporate [the ingredients] - whether destined for private or branded label goods,” stated the spokesperson. “At the specialist functionality end, the global downturn should not have as significant an impact since most of these products are still at an early adoption phase targeting specific products like infant nutrition, adult nutrition, etc.”
Global price issues
Despite this predicted resilience in the private label push, Proteus claimed that whey and lactose still faced some challenges ahead, particularly in regard to the impact of global pricing on ingredient processors.
The analyst pointed to a large number of multinational ingredients groups that had made major investments in recent years across Europe only to find depressed pricing in the current market as a particular concern.