The new WHEY BOOK 2016 on whey and lactose products from 3A Business Consulting demonstrates, how whey and lactose ingredients continue to show higher volume growth rates than the general food and food ingredients market, despite the state of the global economy and the global dairy markets.
The WHEY BOOK 2016 covers the global market in terms of whey and lactose production, trade and demand, new product launches, investments, mergers and acquisition and a market outlook towards 2020.
“It is tempting to say that demand for whey and lactose just keeps growing at least in volumes, irrespective of the relative poor performance of the global economy and th e state of the dairy industry”, says Tage Affertsholt, Partner of 3A Business Consulting.
For the forecast period 2016-2020, the assessment is that the whey industry altogether will be able to keep up with demand, giving large investments undertaken by the industry in recent years in capacity and technology, and by better utilization of the liquid raw material available. “Generally supply and demand is not forecast ed to be significantly out of balance, however some significant investments undertaken do p rovide short term imbalances,” says Affertsholt.
Whey powder and whey proteins represent a global market value of approx. $4.9 billion in 2015, significantly down compared to 2013 given the relatively low global prices for the last 2 years, although showing clear signs of recovery in 2016. Given constant prices, the market value is forecasted to reach approx. USD 6.1 billion in 2020, corresponding to an average annual value growth towards 2020 of 4%. Lactose, pharmaceutical lactose and permeate powder markets are globally worth $1.6 billion in 2015, a figure estimated to exceed USD 1.9 billion in 2020 and likewise implying an average annual growth of 4% over the forecast period at constant prices.
The major players in the whey and lactose ingredient industry are the leading dairy- and cheese companies in the world such as Lactalis, FrieslandCampina, Fonterra, Arla Foods, Saputo, Glanbia, Murray Goulburn, DMK/Wheyco, Leprino, Agropur/Davisco, Sachsenmilch, Savencia/Armor Proteines, Sodiaal/Euroserum and Hilmar. Specialist whey and lactose ingredient companies such as Milk Specialties Global, Meggle, Milei, Volac, Carbery, and Dairygold also play an important role in the global market place. The world’s two largest dairy companies - Nestlé and Danone - are rarely actual producers; they are however major end-users of whey and lactose ingredients, e.g. for infant formulas. Further, many FMCG companies such as the Coca Cola company, expand their product portfolio to new product ranges including protein fortified soft drinks.
“The protein trend is really a global mega - trend playing into the hands of the whey industry,” says Affertsholt, and this will be illustrated in the report through new products launched with claims of high protein content.
The report shows several clear product trends. For whey, the high-end protein products - WPC80, isolates and hydrolysates – have been growing by double-digit figures, whereas whey powder and other low-end products are stagnating. The nutritional sectors infant formula, sports nutrition, clinical nutrition, healthy aging etc. are the drivers for the strong growth in the high-end protein ingredients. Another trend is the ongoing consolidation of the industry, exemplified with the Agropur acquisition of Davisco and the Fonterra strategic alliances in Europe.
EU-28 and the US are both the largest producers and major markets for whey products, whereas Asia has become the major market for permeate powder and is reaching for the top spot for lactose, currently held by the EU. The Asian region including China is expected to show the highest demand growth for the 2016-2020 period. Growth in production of high-end protein products i.e. WPC80, WPI and WPH is mainly driven by the US, whereas growth in WP, DWP and lactose production is expected to originate in the EU. In terms of export, the EU and the US are by far the key exporters globally, while China is dominating in terms of whey and lactose imports.