US dairy exporters have a huge opportunity to tap rising demand in a $23bn global market for medical nutrition products in emerging nations such as China as well as mature markets like Japan, according to US Dairy Export Council (USDEC).
Kristi Mika Saitama, export ingredients marketing told DairyReporter.com that US dairy exports in 2011 grew 30% year-on-year to $4.82bn and attributed this to a growing world population, and also growing middle classes in key emerging markets such as China and Southeast Asia.
She told this website:“When we look at some of our core markets Southeast Asia grew 4%, the Middle East grew 12%, Mexico 16%, China 19%. So it’s not just the products growing, but regions growing as well across the board.”
“In 2011 Mexico became our first ever $1bn dollar export destination – our exports there topped $1.17bn last year.”
Explaining growth drivers for US dairy exporters, Saitama said consumers were looking for products that catered for all life stages, from recombined milk products for young children in Southeast Asia, for instance, through to health and wellness products (such as whey- and milk protein ingredients) catering for different adult demographics elsewhere.
“So products for weight management, fitness and an active lifestyle. And looking to the future, the 65+ population is really growing, and we’re going to need new nutritional solutions to combat chronic diseases, for instance, and lifestyle changes as populations age,” Saitama added.
‘Year of the dragon’ population spike
Discussing principle markets for dairy-based ingredients for senior nutrition products, Saitama said: “The US is one of the largest markets for medical nutrition products, and Japan as well with its ageing population.
“But in the longer term China is also an opportunity, because even if the population there of 65+ is under 8%, compared to 22% in Japan, that’s still over 100m consumers because the population base is so large. It’s a huge market for the future.”
USDEC said in its February ‘Year in Review’ report that ongoing food safety issues and an inability to raise domestic production quickly and cheaply enough meant native Chinese producers could not meet increased demand.
Meanwhile, US dairy exporters had gained a competitive edge in recent years, by engaging with customers in key markets (via USDEC) to explain product benefits, Saitama explained.
“In the past year we’ve had seminars in both Japan and Korea, highlighting the latest nutritional benefits of whey protein, specifically focused on some new studies regarding weight management. We’ve put that information into the hands of decision makers so that they can develop products that meet the needs of consumers.
In the past when we were a relative newcomer on the export stage, we were really simply taking the chance to introduce the US dairy industry to customers overseas. Now we can take a much deeper approach of really engaging with overseas customers regarding product innovation ideas.”
Rising US milk supply
One dairy export success story for the States was whey protein, Saitama said (450,479 tonnes) with roughly two thirds of whey produced in the country shipped overseas, fuelling growth of about 38% since 2006, although USDEC’s ‘Year in Review’ reveals that export volumes were flat in 2011, given growing US demand.
She said: “The US is particularly well positioned for growth – because we have a rising milk supply, and everything from sweet whey through to high protein concentrate products (WPC 80, WPI). Our large portfolio really makes us quite unique.”
And the markets for such products? “You could divide markets maybe into two broad strands, emerging market populations eating more bread, confectionery, end use sectors where whey protein is valued from a functionality perspective.
“Then there are other sectors such as the US and Japan where health and nutrition has been a key driver, although that is probably a bit over-simplified.”
Where whey had led, cheese (29% export growth to 200,000+ tonnes: 2011) and milk powder (457,312 tonnes) could follow since they had “huge export potential”, Saitama said. “We can make these a much larger proportion of our production that is exported overseas in the future.”
The quality of US ingredients meant that the nation’s dairy industry had a competitive advantage, she added:“We have a tight, multilayered system of checks and balances that ensures that we as a dairy industry are consistently supplying a quality and wholesome product to world customers.”