Dairy firms should focus on added-value products
Simon Bates, communications director at trade association Dairy UK, said that developing value-added products would not only provide the best long-term returns but also free firms from relying on the short-term peaks and troughs of the commodities market.
Manufacturers are already developing added-value products in the cheese sector by studying the potential for reduced fat and ‘light’ options for established brands, said Bates.
Technological investment is paying off in the improved quality of lighter cheeses and spreads, he added.
Lighter cheese is the market’s fastest growing sector, rising by about 20% year-on-year, said Will Sanderson, corporate affairs director at dairy co-operative, Milk Link.
Health and nutritional products
UK dairy co-op First Milks chief executive, Kate Allum said growing interest in health and nutritional products has fuelled demand for whey protein to manufacture sports bars, energy drinks and high-protein yogurts.
To exploit this opportunity, Milk Link had joined forces with sports nutrition firm Volac to build a £12M whey processing facility at Milk Link’s Taw Valley Creamery, which was completed last July, said Sanderson. The facility can separate whey into whey protein concentrate and permeate powder.
Permeate powder can be used in a wide variety of products such as bakery items and ready meals. Filtered whey concentrate is ideal for sports nutrition products, he added.
First Milk had launched a joint venture with leading New Zealand dairy co-op Fonterra to produce a whey concentrate for the European market, Allum said.
Allum added that the strong potential of the UK dairy sector was revealed by European firms’ interest in British acquisitions.
Arla and Müller
“I believe that international companies like Arla and Müller coming into the British market demonstrates that they see development potential in the British dairy industry.
“We have perfect conditions for producing milk and lots of product areas that we can develop further.”
German yogurt manufacturer Müller’s £279.5M bid for dairy giant Robert Wiseman was accepted last month.
Speaking last month, Julian Wild, food group director at law firm Rollits, told FoodManufacture.co.uk: “Muller have been finding life a bit hard in the UK, with management changes over the last year not helping. So it certainly doesn’t surprise me that it is looking at ways of growing its business.”
Wild expressed surprise at the bid, however, due to the competitive nature of the UK liquid milk sector, describing the move as “a pretty ambitious plan”.
“I am surprised that anyone would be rushing to get into the UK liquid milk market as it is a very competitive and tough place to be,” he added.
“But Müller already knows the dairy sector very well. As it stands, the market is largely private label, so perhaps it feels it can attach a brand to the sector.”
