Countdown to the integration of ten new member states in Europe this May begins under the aegis of the Irish presidency. For manufacturers, a clear understanding of the marketplace in these countries will be vital to pitching the right message, tackling new consumers and driving sales growth.
As manufacturers and ingredients companies look to new income sources, dairy companies are fast turning whey into value-added food ingredients for the food industry. According to the report from UK company Zenith International eastern Europe is already being developed by local and international companies, but opportunities are still very much out there, with sweet whey demand top of the list.
"Compared with established west European markets, demand for whey products in the East European accession states remains underdeveloped. However, the rate of progress over the past three years has been impressive, particularly in the production of sweet whey powder, which has increased by 30 per cent since 2000 to nearly 111,000 tonnes in 2003," explained Zenith Market consulting manager John Meropoulos.
Traditionally, whey was a by-product with a negative value from the cheese production but today sophisticated technology for manufacturing highly valuable whey derivatives has upped profitability from cheese production. High value-added whey derivatives are already important food ingredients for industries ranging from infant formula to medical foods.
The new report - Whey Products in East Europe - examined four main whey product sectors - sweet whey, demineralised whey, whey protein concentrates and whey protein isolates - analysing both the supply and demand for these throughout the EU accession countries of Poland, the Czech Republic, the Baltic States, Hungary, Slovakia and Slovenia.
In terms of whey products usage, Poland accounted for half the regional total in 2003, driven by the country's chocolate confectionery industry, with international companies such as Masterfoods, Nestlé and Cloetta Fazer all producing locally. The food processing industry in the Czech Republic was the next largest user, accounting for an 18 per cent share.
"In the EU accession countries, growing output of ripened cheese across all markets has led to substantial rises in the amount of liquid whey being processed, with many local companies developing export markets for sweet whey powder in the Middle East and Asia. Euroserum of France was among the first international companies to realise the potential, setting up local processing facilities in Poland and the Czech Republic," added Meropoulos.
The whey processing sector in East Europe is expected to undergo significant further changes over the next few years as local companies begin to expand their product offering, writes the report. A notable drive into functional food ingredients with added-value, such as whey protein isolates, is likely to be a major part of the landscape.
"Sweet whey powder, particularly from Poland and the Czech Republic, has been a mainstay for dairy processors in the region over the past five years. However, EU accession and increasing demand for more functional food ingredients in West Europe is likely to result in local Polish and other East European whey processors investing in new technology to produce more added value products such as whey protein concentrates in the future," concluded Meropoulos.
The growing global production of cheese has generated ever-growing quantities of whey solids and to maximise the overall profitability of cheese and whey solids, the food industry is constantly on the look out to find new ways of process innovative high value-added whey derivatives - a trend equally applicable to both the protein and lactose part of whey solids.
A report published by Zenith last year clearly showed sweet whey powder to be the largest sector in West Europe, responsible for three quarters of total volume.This was followed by demineralised whey, an important ingredient in both chocolate confectionery and infant formula.
According to the report, in 2002 consumption in the region edged up to nearly 770,000 tonnes for sweet whey, demineralised whey, whey protein concentrates (WPC) and whey protein isolates (WPI).
France, Germany and the Netherlands dominate whey production in western Europe, with the main whey processors located in these countries. The Dutch appear to have the greatest liking, accounting for more than 30 per cent of European consumption in 2002 - albeit that the Dutch animal feed sector is the main customer. Next on the list, food processing industries in France and Germany were responsible for 25 per cent and 15 per cent of the market respectively.
French companies like Euroserum are important in the sweet category, while Dutch company Borculo Domo is active in the demineralised category. According to the report, in WPC and WPI, Milei, Arla Foods and BBA Lactalis are each increasing their focus on added value products. Major dairy companies dominating the scene are Australian company Fonterra, Dutch DMV, French group Lactalis and Irish company Glanbia. A number of more specialised companies are also very active, these include Davisco, Armor Proteines and Tatua.
For further details of reports, click here.