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Innova: Future dairy pathways

Milk and dairy food makers around the world are increasingly turning to innovation and new product development in order to escape increasing pressure on margins for basic milk and cheese products. [This article was published in the October 2008 issue of Innova].

 The UK food industry consultancy group, Food From Britain, recently published a report into the world market for dairy products and the pressure for innovation, entitled Innovation in the Dairy Market. Mireille Pierrevelcin, the research executive at FFB who prepared the report, says that the UK has been doing particularly well in terms of innovative new products, with cheese in particular seeing one of its best years ever in 2007.
She observes: “There is a high demand for new varieties of cheeses, in particular regional and local variants. In the wider dairy market, demand for healthier dairy products, functional foods and low fat foods have all been exploited to create innovative new products.”

Going special

 UK regional and specialty cheeses have been doing well in France and also in the US, where a focus on the artisanal nature of much UK cheese production has gone down extremely well, apparently.
Worldwide, according to FFB research, the dairy market was worth £134.2 billion in 2007, an increase of 5.5% over the previous year. But, as has been noted, there is a major problem with commoditisation in the main market areas, milk, cheese and butter. Hence the drive to create innovative value-added products.
Innovation tends to be focused on the following areas:
• New packaging formats;
• Healthier dairy products (i.e. low fat);
• Functional foods (i.e. dairy drinks with cholesterol-lowering plants sterols);
• Green and/or ethical products;
• New products (i.e. new cheese flavor variants or local recipes);
• New product benefits (i.e. spreadable butters);
• New routes to market (i.e. home delivery).
ImageSome products will incorporate two or more of the above at the same time. For example, the Welsh dairy farmers co-operative Calon Wen launched organic milk packaged in a plastic bag or pouch more than a year ago, in July 2007. Initially sold through selected Waitrose supermarkets, Calon Wen was introduced into Tesco supermarkets early in 2008. Calon Wen, incidentally, means either White Heart or Pure Heart in Welsh.
The technology behind Calon Wen’s milk in a pouch is not new in a worldwide sense – in fact, the product has been on sale in Canada for more than 20 years. Canadian manufacturer Glo Pak started taking it round UK dairies a couple of years ago.
Milk in bags or pouches is also widely sold in South Africa and India. Bags used to be popular in Brazil, but are apparently losing out to cartons, and have recently been introduced in Australia, New Zealand and the US.
Not to be outdone, another UK supermarket chain, Sainsbury’s, has also launched a milk-in-a-bag using a similar ‘bag in a jug’ technology.
With both Calon Wen and Sainsbury’s, consumers buy a reusable plastic jug. The milk bags fit inside, the consumer pulls a tab and clicks the lid in place and the milk is ready to pour. Calon Wen claims the Glo Pak system uses 75% less plastic than conventional plastic bottles.
Milk in a bag is not new to the UK, and there have been at least two previous attempts to launch it, one six years ago and one back in the 1970s. But the latest attempts follow the recognition that market conditions had changed, and that interest in organics and in reducing packaging waste means UK consumers are now ready to consider buying their milk in something other than a plastic bottle, cardboard carton or glass bottle.

Hip to be square

Another packaging innovation for milk has been launched in the US by Wal Mart’s Sam’s Club division – square plastic milk jugs. The jugs, which hold a gallon of milk, have spouts in one corner which are flush with the top of the container, while means more square jugs can be stacked and transported in a standard truck than conventional milk jugs, and without the need for milk crates.
It may not sound that exciting initially, but Wal-Mart claims an extra 9% can be fitted into the same delivery trucks, with additional cost and environmental savings from eliminating the need to wash crates.
Another eco-friendly solution to packaging milk could be the classic glass bottle, which can be re-used time and time again. Unfortunately, such re-use necessitates the existence of a whole chain of related services, including bottle collection, washing and sterilising and delivery back to the production plants for refilling.
While such chains may once have existed in many countries for dairy products, and while they still exist in some countries for other liquid products, notably beer, it is only in the UK that the re-usable glass milk bottle is really still hanging on.
It is also only in the UK that such a sizeable – effectively, nationwide – home delivery network still exists.

Home delivery

This is not to say that home delivery is not available in other countries. Indian dairy products company Verka launched a home delivery service in June this year. In Baltimore, Maryland, South Mountain Creamery started home delivery a few years back to service demands from consumers wanting more environmentally friendly and hormone-free milk. In Illinois, the Oberweis Dairy has been doing home delivery since it opened in 1915. In Japan, milk is delivered to city-centre homes daily in glass bottles.
However, no other country seems to have the concept of the traditional milkmen delivering the “daily pint” quite so engrained into the national psyche as in Britain.
There has been significant change, however, according to Edmund Proffitt, processing manager for Dairy UK, who says that 20 years ago, 70% of UK milk was delivered to homes by milkmen. “Today, home deliver accounts for 10% of total milk consumption – but that still means 7,000 milkmen delivering on a regular basis to 3.5 million UK households.”
The UK’s milkmen no longer restrict themselves to milk or even dairy products, though. Dairy UK says there are a total of 115 different products in total that can be ordered via milkmen (not all necessarily from the same one) including obvious ones such as butter, cheese, eggs, bread and juices, but extending to more arcane items such as garden compost.
Most – 83% – of milk delivery rounds still use returnable glass bottles, and the average “trippage” (the number of trips each bottle makes) has increased from around 11, 10 years ago to 20 today. Unfortunately, while just under half (44%) of all home milk deliveries in the UK are still carried out using the traditional electric milk cart, the rest have had to convert to ordinary diesel vans – because of the fall in the number of deliverymen, rounds have got bigger and the electric carts simply cannot cover the distance before needing recharging.

Find a milkman

The environmental credentials of the traditional home delivered pint of milk in a reusable glass bottle have not escaped environmentally-conscious consumers, however, and there are beginning to be signs of an increased uptake in home deliveries. Dairy UK is helping promote this interest in traditional milkmen via a very modern channel, the internet; it has created a site, Findmeamilkman.net, where UK consumers can type in their postcode and see if they fall within a milkman’s round.
Incidentally, in Japan, there is a sizeable home delivery network for the yogurt-based probiotic functional food product Yakult, which turns up on consumers’ doorsteps on a regular basis courtesy of an army of 50,000 Yakult ladies – a sort of cross between Express Dairies and Avon calling.
Yakult, incidentally, is largely responsible for creating the functional milk-based drink sector of the dairy products market. However, it appears to have been something of a victim of its own success, and also of a reluctance to change its basic formula and proposition. While rival brands have added a wide range of different formulations offering different benefits – such as Benecol, with its plant sterols which cut cholesterol levels – Yakult has remained almost completely the same as when it was launch. About the only change to the flagship line – so far at least – has been the addition of a lower sugar version, although certain products such as the one pictured from Japan are further fortified with ingredients such as vitamin E.

Going exotic

Flavoured milks have been popular in many countries for a long time, but producers have begun to experiment with more exotic flavours recently. Obviously, what constitutes “exotic” will vary widely in different countries and with different ethnic groups. So mango flavoured milk would be regarded as run-of-the-mill in India, for example, but in the UK, where it has recently been launched, it is seen as an exotic, tropical flavor.
The growing anti-high fat, salt and sugar food movements in the European and North American markets have given a boost to single-serve low fat flavoured milks, which have now been introduced by many fast food restaurant chains and food retailers such as McDonald’s and Starbucks. While there is justifiable concern over levels of sugar in some flavoured milks, research has suggested that for children, the presence of some sugar is more than made up for by the increase in calcium intake.
In India, ready-to-drink flavoured milks account for the lion’s share of the national milk market, and there is fierce competition between Indian dairy companies and co-operatives.

Regulatory issues

Looking again at concerns over health, it is significant that the European Union has in recent years been modifying some of the regulatory framework governing the formulation of dairy products and, perhaps more importantly, how they can be marketed.
For example, it used to be the case that any use of the word “butter,” or of visual cues referring to butter, could only be used for products that had a minimum of 80% butterfat. That has now changed, which has led to the development of a whole range of lower-fat spreads which include butter in combination with some form of vegetable oil.
ImageWith milk, the European Union has changed its regulations on marketing in an attempt to stimulate the development of new, lower-fat and so healthier milk products.
The regulations used to say that milk could only be marketed as whole or full-fat, semi-skimmed or skimmed. Milks which fell outside these three bands – for example, milk with 1% fat, which is more than the old regulations allowed for skimmed milk, but lower than the old definition of semi-skimmed, or milk with 2% fat, which is higher than semi-skimmed but lower than full-fat – could not be sold as milk. Instead, they had to be called things like “1% fat drink containing milk.”
Now, a whole range of new categories for milk products has opened up, and companies have responded by launching a range of new drinks.
In the US “1 per cent milk” is widely accepted by consumers, while in the UK, Scottish dairy company Wiseman’s Dairy launched its brand, “The One,” in 2004. The One contains 1% fat, and so under the old EU regulations could not be called milk, but had to be referred to as a “milk drink.” Dairy industry experts believe that consumers who have become accustomed to semi-skimmed milk (with 1.5% to 1.8% fat) should adapt relatively easily to 1% milk, receiving relatively little difference in taste.
Again, people who drink full-fat milk – 3.5% fat or more – may well find the switch to a 2% milk relatively easy.
Food manufacturers are also looking at incorporating milk with different levels of fat into their products, including cheeses, sauces, ready meals and dairy-based sweets and desserts.

School milk

Another EU initiative which has prompted the development of new milk-based products aimed at children in particular has been the extension of the European School Milk Scheme to a whole range of dairy products beyond basic milk.
The scheme, which is aimed at increasing the consumption of healthy dairy products by children, and so improving their intake of many important vitamins and minerals, used to involve a subsidy to countries to distribute free milk in schools.
However, after representations from many member states, it has been extended to include certain fermented milk products with fruit or fruit juice, plain fermented milk products, such as yoghurt, buttermilk, kephir etc., and a wide range of cheeses.
It also now allows for the EU-subsidy to be applied equally for full-fat, medium-fat or low-fat products.
Furthermore, it has been extended to secondary schools in addition to nursery schools, other pre-school establishments and primary schools (countries previously had the option of including secondary schools, and many did not do so).
In the 2006/2007 school year, the equivalent of 305,000 tons of milk was distributed in schools in 22 Member States, with support from EU subsidy totalling more than EUR50 million. With the new and simpler rules and a wider range of more interesting products available, the EU expects participation in the scheme will increase significantly.

Valio markets double effect dairy drink

Valio has developed a product family with a unique double effect on cardiovascular health. Valio Evolus double effect contains both cholesterol lowering plant sterol and blood pressure lowering milk protein based peptides produced using a Valio patented method. Lower cholesterol and blood pressure maintain blood vessel elasticity while high cholesterol, elevated blood pressure and stiffening blood vessels are all considered cardiovascular disease risk factors. Valio Evolus double effect will be available in Finland in September superseding Valio’s former Evolus product family.
Elli Siltala, Marketing Manager at Valio told Innova that a quantitative survey into the product found that 80% of those questioned were very interested in purchasing the product because of the dual effects it has. She admitted that there is consumer skepticism does exist when it comes to making a lot of claims on a product but did not believe that this would be detrimental to this launch. The type of consumer likely to purchase this product is also often looking to address both eleveated blood pressure and cholesterol issues.
“There are a lot of functional food products which are making a lot of claims but are not clinically proven. Our company’s ethics demand that things are clinically proven. We are promoting a combination as the type of consumers who have elevated cholesterol or blood pressure often have the other as well.” The company has applied to the European Food Safety Authority (EFSA) to carry the “blood pressure lowering” and “promoting arterial elasticity” claims on products. Evolus double effect contain cholesterol lowering plant sterol which scientific evidence was approved to be strong enough by European Food Safety Authority for the stated health claim that “plant sterol lowers cholesterol.”
“Valio Evolus double effect is a prime example of Valio’s R&D expertise in action. We have succeeded in developing a tasty product family, based on solid research, that combines two qualities significant to Finnish public health. Around a half of Finnish adults have elevated cholesterol values and about one third suffer from elevated blood pressure. I believe that Evolus double effect will become a success story outside Finland, too,” said Siltala.
Clinical studies on Valio Evolus double effect in relation to blood pressure were conducted by Valio in co-operation with health care organisations and universities. The product’s maximum effects are achieved in just 5–7 weeks when a sufficient daily dose is taken regularly.
The Valio Evolus double effect product family includes strawberry and orange-pineapple yoghurts, yoghurt-based daily dose drinks (raspberry and apple-pear), and fermented milk. All products are low lactose or lactose free. A daily dose sufficient to affect blood pressure and cholesterol can be obtained from two glasses of fermented milk (3 dl), two cups of yoghurt or one bottle of daily dose drink, and contains 2 grams of plant sterols and 4.2 mg of peptides.
Thus far Valio is only in a planning stage for an international launch of this product, but Siltala did note that the company usually follows a Finnish launch with an introduction into one of its subsidiary markets. These include Sweden, the Baltic States, Russia, Belgium, the US and China.

About the Innova Database

Based in Holland, the Innova Database was designed by leading food and beverage professionals for leading food and beverage manufacturers, and is widely recognised as a leading source of new product tracking, trends, and innovations available anywhere, at any price. Key companies around the globe rely on the Innova Database to inspire their marketing teams, power up their innovation process, keep tabs on their competitors, and track new technologies.

FOODStuff SA has an agreement with Innova to regularly publish articles from its monthly, member-only journal, Innova. See http://www.innovadatabase.com for more details.

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