The company has long offered a range of permeates of different grades – by-products of whey concentrate production, and consist of lactose, sugar and milk minerals – and lactose to the food industry.
However it now sees permeate and lactose as gaining more importance in the food industry, given the battle against high raw material prices. Permeates in particularly are said to help reduce costs, not least in their use as fillers in snack foods, as they are reportedly cheaper than alternatives like pure lactose, whey powder, dextrose and maltodextrin.
A spokesperson for Arla told FoodNavigator.com that permeates have been prioritized in the company’s five year strategy. The idea of the new, dedicated business unit it to spear the development of more value-added ingredients of this type.
In November 2008 it unveiled a new generation of whey permeate called Variolac 960 – a range of free flow permeates with 96 per cent lactose content – significantly higher than the percentage in standard permeate. Technical manager Soren Norgaard told FoodNavigator.com at the time that this brings a more appealing, sweeter flavour, and expands the uses of the ingredient.
Klaus Kristiensen, who will head the new business unit as business development manager, said: “Our philosophy has always been to develop new generation products that offer even more functionality than their predecessors”.
As demand has grown for whey permeates, Arla has sourced more raw materials through external partnerships.
An example of external partnerships is its agreement with Norwegian dairy firm TINE one year ago, intended to expand its capacity of whey protein concentrates through an agreement with Norwegian dairy firm TINE.
TINE had previously sold the whey generated by its cheese operations as animal feed. But a new plant refines it into whey protein concentrate for the food and nutrition industry, which commands a higher price.
Arla took on selling the TINE's ingredient to food industry customers outside Europe, which meant a ten per cent increase in the WPC it can offer to the market.
Arla Food Ingredients’ activities are divided into two areas: trading and industrial ingredients.
Trading is centered on supplying dairy commodities to the food industry, such as whole milk powder, butter and cheese.
Industrial ingredients is the home of milk-based ingredients. In addition to the new businesses unit for permeate and lactose, the company has three others: functional milk proteins, nutrition and bakery.