HIGHLIGHTS: AUGUST 18, 2023
• Two ingredient events in Vietnam
• Peterson, Nyman named new USDEC board leaders
• USDEC meets industry, government officials in Peru
• Whey Protein Forum in South Korea
• USDEC members at Food Ingredients South America
• Upcoming trade shows in Southeast Asia
• Salon du Fromage offers gateway to Europe and more
• Download: most recent USDEC research reports
• Market Summary: GDT in freefall
• Ireland dairy groups criticize farmer exit scheme
• ALIC slates butter tender for “small users”
• Company news briefs: Arla Foods Ingredients, Happy Valley Nutrition, Burger King
Featured
Dual U.S. dairy ingredient events in Vietnam reach end-users and food science students
With a population of nearly 100 million and economic growth expected to average more than 6.5% annually for the next five years, Vietnam is an enticing growth market for global dairy suppliers. USDEC continued its ongoing work to raise the profile of U.S. dairy in Vietnam and drive demand for U.S. dairy ingredients with two events earlier this month.
On Aug. 3, more than 140 representatives from Vietnamese food and beverage companies attended the USDEC-hosted seminar, “Elevating Beverage Innovation with U.S. Dairy Ingredients,” in Ho Chi Minh City. A slate of speakers outlined consumer trends and how U.S. dairy ingredients could be seamlessly integrated into products that align with the local market.
Presentations highlight opportunity
Anoo Pothen, USDEC Southeast Asia’s consumer insights director, provided insights into beverage consumption behavior in Southeast Asia based on custom USDEC market research, exploring the drivers behind protein-fortified beverage demand. One of the findings: 61% of Southeast Asian consumers surveyed indicated a willingness to pay more for protein-added beverages.
Martin Teo, USDEC Southeast Asia’s technical director, food applications, provided regionally-tailored formulation ideas and product concepts highlighting the functional advantages of U.S. dairy proteins and permeate. Teo offered insights into the nutritional advantages of formulating with dairy proteins vs. other proteins and reinforced opportunities for innovation targeting people across different life stages. A key message was how U.S. dairy ingredients facilitate innovation with better-for-you products without compromising on taste.
During an extended tea break and networking session with U.S. suppliers who participated in the event, attendees had a chance to sample U.S. dairy protein-containing beverage formulations positioned to deliver on findings referenced at the seminar.
Five USDEC members presented at the seminar, highlighting beverage innovation opportunities with U.S. dairy ingredients.
Other speakers included Phuong Dang, USDEC Vietnam office lead, who shared an overview of how U.S. dairy is well positioned to support customers in Vietnam; Keith Meyer, USDEC marketing manager, Global Ingredients Marketing, who provided an overview of U.S. dairy sustainability; and Donna Berry, food scientist and owner of Dairy & Foods Communications, who highlighted a variety of commercially available products containing dairy ingredients and how manufacturers leverage dairy content to address consumer preferences.
Anoo Pothen, USDEC Southeast Asia’s director of consumer insights, outlines consumer beverage consumption trends in Southeast Asia.
Martin Teo, USDEC Southeast Asia’s technical director, food applications, explains that with U.S. dairy ingredients, better-for-you products don’t have to compromise on taste.
Student education
On Aug. 4, USDEC hosted a seminar for food science students at Ho Chi Minh University of Industry and Trade (HUIT), building on previous engagement with Vietnamese food science university students. Engaging with potential food and R&D professionals early in their careers helps further USDEC efforts to boost U.S. dairy demand.
“For the formulators of tomorrow, it all starts with building a fundamental understanding of U.S. dairy ingredients,” said Meyer. “It is knowledge they can take with them throughout their careers. Furthermore, these kinds of events convey to the trade the United States’ interest in long-term, mutually beneficial growth and industry success. We want food formulators to be confident that the United States will be there with a sustainable supply of dairy ingredients to meet any future demand growth.”
USDEC engaged with HUIT staff prior to the event, working with them on potential product concepts with U.S. dairy ingredients. At the seminar, those instructors presented their experience working with the products to the students.
In addition, Berry reprised her presentation from the earlier food and beverage seminar to emphasize the breadth of exciting possibilities for dairy ingredient-powered product development. Meyer communicated what differentiates the U.S. as the supply source of choice, committed to growth and success of food innovators around the world.
Food science students, instructors and USDEC staff pose for a group shot after the U.S. dairy ingredients seminar.
Peterson, Nyman step in as interim USDEC board leaders
USDEC is pleased to announce that Alex Peterson has been named interim chair, replacing Larry Hancock, who stepped down from his position to devote more time to his church. Peterson, who has served as USDEC vice chair since 2021, operates a 150-cow dairy farm in Grundy County, Missouri, and is heavily involved in U.S. dairy industry leadership. He currently serves on the Midwest Dairy Board, the board of the United Dairy Industry Association, and the Dairy Farmers of America Central Council.
USDEC also welcomes California dairy farmer Becky Nyman as the new interim vice chair, filling the spot vacated by Peterson. Nyman operates a 4th-generation, 1,200-cow dairy farm in Hilmar, California, along with her brother. Realizing the dairy industry was always at her core, Nyman rejoined the family business 12 years ago after spending a decade in market research with agribusiness and consumer packaged goods clients. She also serves on the National Dairy and Dairy Management Inc. Boards.
Both Peterson and Nyman are serving as interim USDEC leaders. Elections for permanent chair and vice chair positions will take place later this year. For more information, please contact Luke Waring at lwaring@usdec.org.
Peru trip yields collaboration opportunities and intelligence
Building on a legacy of strong relationships in Latin America, Jaime Castaneda, USDEC executive vice president, Policy Development and Strategy, and Nick Gardner, USDEC senior vice president, Sustainability and Multilateral Affairs, were in Peru this week for a series of government and private sector meetings exploring opportunities to support USDEC’s Codex work, collaborate on other international forums, gather market intelligence, and continue to push back on non-tariff barriers impeding U.S. exports to the country.
Meetings were held with vice ministers from the ministries of Commerce and Agriculture, as well as the Director General and staff overseeing the Peruvian Codex office. Castaneda and Gardner used the meetings to advocate the importance of collaborating in forums like Codex to advance science-based standards and push back on efforts often led by the EU to use international organizations to advance regional trade interests or ideological viewpoints that harm dairy trade. USDEC’s priorities and message of collaboration were well received and several discrete opportunities will be pursued as follow up in Codex and beyond.
USDEC's Jaime Castaneda and Nick Gardner with members of the La Dirección General de Salud Ambiental (DIGESA) who oversee the Peruvian Codex Office and other standard-setting functions.
The trip provided an opportunity to expand relationships with and gain intelligence from private sector stakeholders including the Gloria Co., the largest buyer of U.S. SMP with the largest dairy market share in Peru, and the Laive Co., the second largest Peruvian buyer of U.S. dairy products.
Meetings were also held with the Peru Dairy Producers Association and the Food Industry Association of Peru. These meetings explored the national policy dynamics that have led to increasingly protective regulations and congressional actions that have limited imports, particularly evaporated milk.
Castaneda began and ended the trip with a strong focus on trade policy issues of critical importance to USDEC. Castaneda met with members of Congress reviewing legislation to prevent the use of whey products in food as an ingredient, with the Peruvian equivalent of the Patent and Trademark Office to discuss common name issues and with the law firm overseeing geographical indication issues for USDEC in Peru and Ecuador.
Forum highlights dairy-protein-fortification opportunities to South Korean food and beverage makers, health professionals, media
On Aug. 8, USDEC held its eighth Whey Protein Forum in South Korea, attracting its biggest audience since the series of educational meetings began in 2021. Twenty-four R&D staffers and decision makers from Korean food and beverage companies, health professionals and media representatives and one USDEC member attended the event, which highlighted opportunities to innovate with U.S. dairy proteins and create protein-boosted products geared to local tastes.
The larger-than-average attendance for the event reflects rising Korean interest in protein in mainstream health-and-wellness foods and drinks.
An example of rising interest in protein in South Korea: A growing array of ready-to-drink protein-fortified beverages on the shelf at a Seoul 7-Eleven.
Donna Berry, food scientist and owner of Dairy & Foods Communications, was the main speaker, highlighting how Korea is not alone in growing attraction to protein. In 2022, over one in four (26%) of new product launches featuring whey protein originated in Asia, according to data from Innova Market Insights.
As with her presentation at USDEC’s dairy ingredients health and wellness seminar in Japan (see Global Dairy eBrief, 8/4/23), Berry highlighted real commercial examples of dairy-protein-fortified foods across multiple mainstream product categories, like cookies and baked goods, snacks, beverages, “permissible indulgence” desserts, relaxation products and soup (an idea she noted after seeing large soup sections during tours of Korean supermarkets with USDEC staff prior to the seminar).
“One of our goals for the Forum is to demonstrate that dairy protein is not just a Western concept but also holds potential in multi-faceted Asia-friendly applications, further reinforcing protein innovation opportunities with U.S. dairy proteins for mainstream health-and-wellness foods,” said Kristi Saitama, vice president, Global Ingredients Marketing, who also presented at the event. “We not only shared product inspirations from Japan, China and Southeast Asia but also explained how companies were promoting and merchandising the products at point of sale.”
Donna Berry (standing, front right) highlights Nightfood Sleep-Friendly Frozen Dessert (made with MPC) during her presentation at the Whey Protein Forum in Seoul.
Berry advised attendees on the benefits of including on-pack messaging to attract interest on the store shelves. Prominently listing specific proteins—like dairy, milk or whey—beyond the ingredient list will help signal to consumers that they are choosing a product made with a nutritionally high-quality, complete source of protein containing all the essential amino acids.
This was the second and final Whey Protein Forum of 2023; the first took place in May (see Global Dairy eBrief, 5/26/23). The Korea Food Forum (KOFRUM), working with USDEC, established the Forum in 2021 to communicate reliable, science-backed information about dairy protein’s health and nutritional benefits to Korean media and consumers.
Media coverage and more to come
USDEC expects the August Whey Protein Forum will continue to pay dividends. In addition to nine food trade media journalists covering the event itself, Berry participated in a group media interview before the Forum highlighting messages about health and wellness opportunities for U.S. dairy proteins in Korea. Watch upcoming issues of Global Dairy eBrief for further press coverage of the Forum.
USDEC will continue emphasizing U.S. dairy ingredients potential in Korea on Oct. 13 when the Korean Nutrition Society holds its annual conference in Seoul. USDEC will host a U.S. dairy protein-centric session focused on healthy aging and sarcopenia at the event.
USDEC members engage with buyers at South American food ingredients trade show
The Food Ingredients South America (FISA) trade show is the biggest food ingredients show in South America. This year, FISA took place in São Paulo, Brazil, Aug. 8-10, and attracted 210 exhibitors—much more than the previous two times it was held in 2022 and 2019.
The show was not only noticeably larger but also busier than in prior years, said Terri Rexroat, USDEC vice president of Global Ingredients Marketing. USDEC members who exhibited this year had a productive time, she added.
About 10 members exhibited at the show, including seven at the USDEC booth, which served as a centralized (and busy) meeting place for U.S. suppliers and South American ingredient end-users.
The USDEC South America office contacted more than 100 current and prospective customers in advance of FISA to invite them to the USDEC booth to engage with members and staff. That preliminary groundwork paid off, with more than three-quarters of those contacted coming in for meetings, many of them pre-scheduled.
In total, including meetings that developed organically during the show, members met with 181 prospective customers at the USDEC booth and were consistently engaged with a mix of existing clients and new leads. In addition, most of the participants from the July USDA mission from Brazil to IFT in Chicago visited the USDEC booth at FISA.
The majority of FISA attendees hail from Brazil.
USDEC member representatives from Agri-Dairy, BTG Ingredients, Erie Foods, Idaho Milk Products, James Farrell & Co., Milk Specialties Global and Proliant Dairy Ingredients and USDEC staff at the USDEC booth at the Food Ingredients South America show in São Paulo, Brazil.
Events
Upcoming trade shows in Asia to showcase local-friendly innovation with U.S. dairy
As also noted in the July 28 issue of Global Dairy eBrief, USDEC will be exhibiting at the Food Ingredients (Fi) Asia Thailand trade show (at booth #E-21) Sept. 20-22 at the Queen Sirikit National Convention Center (QSNCC). Then from Oct. 4-6, USDEC will be exhibiting with a booth (#1-153) at the Health Ingredients (Hi) Japan trade show at the Tokyo Big Site Exhibition Centre.
At both shows, USDEC plans to engage with food and beverage manufacturers about the advantages of sourcing and using U.S.-origin dairy ingredients while also inspiring health-and-wellness food and beverage innovation opportunities with U.S. dairy ingredients, especially dairy proteins. This includes showcasing and sampling local-friendly USDEC prototypes featuring nutritious, versatile and sustainably-produced U.S. dairy ingredients.
While there is no dedicated member exhibit space within the USDEC booth for either show, members are welcome and encouraged to invite customers to visit the USDEC booth or—if attending in person—stop by themselves and meet with USDEC staff. Additionally, any members in Bangkok for the Fi Asia Thailand show, whether exhibiting or not, are invited to participate in USDEC’s pre-show U.S. Dairy Supply Workshop taking place Sept. 18 at The Okura Prestige hotel.
For more information, please contact Keith Meyer at kmeyer@usdec.org.
Salon du Fromage offers opportunities to engage with cheese buyers from Europe and around the world
The 2024 Salon du Fromage cheese and dairy products show represents an opportunity for U.S. cheese suppliers looking to sell into the European Union and beyond. Taking place every two years in France, the show welcomes professionals and experts in cheese from around the world and across the retail, manufacturing, foodservice and importer/distributor sectors.
While it is francocentric, the 2022 edition attracted attendees from 46 countries with 18% of visitors coming from outside of France. Organizers expect around 250 exhibitors and 8,500 visitors for the 2024 edition, which takes place Feb. 25-27 at the Paris Expo Porte de Versailles.
USDEC will not be sponsoring an official booth at the show, but we did want to pass along the information to members who might be interested in participating. Click here to download a four-page packet about the show, including information on booth space, exhibitors and attendees. Or go to the Salon du Fromage website.
In addition to the exhibition itself, Salon du Fromage offers educational sessions exploring cheese trends, tasting workshops and the Coup de Coeur Competition that awards the best products at the show (based on criteria including originality, appearance, taste and texture).
If you are interested in exhibiting at the show or have additional questions, please contact Alex Parker (aparker@usdec.org), who will connect you with the show organizers.
Strategic Insights
In case you missed it: Download USDEC market research
USDEC’s Strategic Insights department has released a series of research reports and market snapshots in recent months. This proprietary research is free and available exclusively to members. To download, click on the respective report title.
- U.S. Dairy Brand Health Consumer Assessment: Is the country of origin influencing consumer purchasing decisions? How do international consumers perceive U.S. dairy products? This study addresses these questions and provides insight into how the U.S. dairy industry can build reputation and market presence globally.
- U.S. Dairy Brand Health Buyer Assessment: This study provides insights into how U.S. dairy is perceived through the lens of current and prospective international buyers in key export markets.
- Market Snapshot: Southeast Asia: Southeast Asia is a strong market for U.S. dairy exports with potential for future growth. Positive perceptions of U.S. dairy among consumers and customers, coupled with a growing population, make the region primed for continued expansion.
- Market Snapshot: South Korea: South Korea is the United States’ fifth largest dairy export market and is poised for continued growth moving forward. With strong cheese demand, particularly in foodservice, Korean consumers are increasingly incorporating dairy into their daily lives.
- Assessing Corporate Strategies of Non-U.S. Dairy Exporters: This research identifies strengths and weaknesses of U.S. dairy competitors at a corporate level to identify opportunities for U.S. exporters and to provide deeper insights into the evolving global dairy landscape.
Please contact sidepartment@usdec.org with any questions, comments or research requests.
Market Summary
GDT in freefall
The Global Dairy Trade (GDT) Price Index plummeted 7.4%, dropping to its lowest level since November 2018. Milk powder and butterfat saw declines across all contract periods. The average winning WMP price plunged 10.9% and now sits at its lowest price (US$2,458/MT) in more than five years. The WMP price is down 18% over the past two auctions alone.
SMP dropped 5.2% to US$2,333/MT, the lowest price since January 2019 and the seventh auction decline in a row.
Butter fell 3.0% to US$4,539/MT and AMF dropped 5.3% to US$4,452/MT.
Futures markets heading into the auction predicted declines for WMP, SMP and butter, but not to this degree. In the case of milk powder, Fonterra Co-operative Group announced late last week that it was adding 20,000 MT of WMP and 5,000 MT of SMP to its 12-month forecast, contributing to buyer malaise. But ongoing bad economic news out of China remains one of the key headwinds.
Just prior to the auction, a new round of economic reports out of China showed consumer prices dipping into deflationary territory, another warning sign of deeper economic challenges. Additional reports showed debt troubles in China’s property sector, slowing imports and exports, and weak consumer spending growth.
Furthermore, prior to the auction, Fonterra lowered its projected farmgate milk price for the 2023/24 season, with the midpoint dropping a full NZ$1.00 from NZ$8.00 per kgMS to NZ$7.00 per kgMS. The company attributed the move to a surplus of fresh milk in China that’s being turned into WMP, limiting the co-op’s WMP shipments to its biggest buyer.
This week, post-auction, Fonterra lowered the price again, with the mid-point falling to NZ$6.75 per kgMS.
The only positive movement on the GDT came in cheddar. After four consecutive declines, the average winning cheddar price rose 5.8% to US$4,127/MT. Strong demand from the Middle East drove the gain.
Despite the cheese gain and improved demand from the Middle East across most product categories, there are no signs that markets will turn around anytime soon. (Company reports; Bloomberg, 8/15/23; Reuters, 8/9/23; Wall Street Journal, 8/9/23)
Irish dairy groups slam farmer exit scheme
Irish dairy farmer and processor organizations submitted comments to Ireland’s Food Vision Dairy Group sharply criticizing the group’s proposed voluntary dairy exit scheme and warning that it would be significantly damaging to rural economies and the dairy farming sector. The scheme, which would likely reduce the country’s dairy herd by an estimated 200,000 head over three years, is part of the Irish government’s plan to meet emission reduction targets mandated by the EU.
The Irish Farmers Association (IFA) and Irish Co-operative Organisation Society (ICOS) both rejected the plan for the damage it would do to the dairy farm sector. The IFA laid out many objections, including carbon leakage (the idea that other countries with higher-emission dairy farming systems would simply replace lost Irish production leading to a net gain in emissions).
Dairy Industry Ireland (DII), the nation’s dairy processor group, criticized many aspects of the proposals, including expectations of reduced Irish milk output and the fact that its members would be left holding the bag for processing capacity investments made to handle increased post-quota milk flows.
The Irish Creamery Milk Suppliers’ Association was the least critical but said it would only support the scheme if it met certain “red line” conditions, including no cap on the number of dairy cows at the farm level or in the country as a whole.
Both ICOS and DII called instead for government support to farmers and processors for emissions-reduction technologies to meet the climate challenge.
The scheme is still in the review stage and faces strong pushback from industry stakeholders. (Agriland, 8/11/23, 8/10/23; Financial Times, 8/10/23)
ALIC schedules “small user” butter tender
Japan’s Agriculture and Livestock Industries Corp. (ALIC) announced an SBS butter tender for “small users,” defined as end-users such as bakeries and confectioners with less than 20 employees. The tender is for 100 MT and is slated for Aug. 31. For more information, contact USDEC’s Japan office at usdecjapan@marketmakers.co.jp or (011) 81-3-3221-6410.
Company News
Arla jumps into lab-based proteins
Arla Foods Ingredients (AFI) inked a partnership with biological solutions company Novozymes to jointly develop protein ingredients using precision fermentation technology. The collaboration will initially focus on creating products for disease-specific medical nutrition, with expansion into other market segments expected in the future.
“Collaborating with Novozymes fits perfectly with our ambition to explore alternative nutrition platforms and complement our portfolio of dairy and whey solutions,” AFI Group Vice President Henrik Anderson said. (Company reports)
Company news briefs
Administrators for aspiring New Zealand-based infant formula manufacturer Happy Valley Nutrition have recommended that the board vote to liquidate the company (see Global Dairy eBrief, 7/7/23). … Turkey-based quick-service restaurant operator TFI Tab Food Investments (parent company of Burger King (China) Investment Co.) plans to open 200-300 Burger King outlets in China per year moving forward. The company already runs more than 1,400 restaurants in 150 Chinese cities. … New York-based scoop shop Van Leeuwen Ice Cream is opening its first international outlet in Singapore through a partnership with Singapore-based lifestyle and food and beverage group Caerus Holding. (USDEC China office; USDEC Southeast Asia office; Dao Insights, 8/8/23; Stuff.co.nz, 8/4/23)
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