Industry update: dairy exports set to soar

Largely reliant on production levels and price, Australia’s milk and cream pro­cessing industry is estimated to have grown by an average rate of 1.3% per annum in the five years ending June 2007.

As the second largest segment in the milk industry, yoghurt has increased by approximately 8% per annum over the past two years with sales growth being attributed to product innovation in the areas of packaging, flavour, probiotic cul­tures, low-fat varieties, drinking yogurts and snack yoghurts.

The dairy segment is becoming increas­ingly focussed on health conscious con­sumers with concerns over the high fat content of dairy-based foods having an adverse effect on demand for products like cream.

Technological advances in ultra-filtra­tion techniques combined with increased consumer demands for healthy, low-fat products have seen a growth in reduced-fat or low-fat milk products as opposed to traditional fresh full-cream milk products.

A number of companies now produce a full range of milk products, offering vary­ing levels of fat content, enhanced calci­um content, extra vitamins and mineral fortifications.

This trend has also been fuelled by the rise in popularity of milk substitutes such as soy milk, which poses an increasing threat to the industry.

Innovation and growth areas

Product innovation has been a major focus and area of growth for the dairy sector in recent years.

Dairy Australia invests approximately $10 million a year on research and devel­opment in manufacturing, including cur­rent research projects looking at UHT and shelf life, cheese and starter cultures, milk components and their interactions, and bioactivity.

In recent years there has been growth in flavoured milk and yoghurt varieties, pack­aging formats, and products that meet specific consumer demands such as extra-frothing milk for cappuccinos.

Innovation is expected to increase to maintain the dairy industry’s profit margins.

Although the perishable nature of fresh dairy products like milk, cream and yoghurt makes export difficult, techno­logical innovations including refrigerat­ed transport and the increased longevity of milk are expected to increase exports to emerging markets such as Asia and the Middle East.

While the industry currently exports over half of the cheese produced annual­ly, this is expected to increase as both Asia and the Middle East are consuming greater amounts of cheese.

Despite health concerns contributing to downstream consumer demand for cheese, there has been an increase in demand for cheese from fast food outlets as more meals are being consumed away from home.

Industry at a glance: cheese manufacturing

Industry revenue: $1314.5 million (1.7% growth)

Export revenue: $823.7 million (7.2% decline)*

Import revenue: $111.8 million (3.3% growth)*

Major players: Murray Goulburn Co-operative, Australian Co-operative Foods, Fonterra Co-operative Group

*Estimated figures source: IBISWorld

Subscription

If you would like to receive FOOD Magazine’s weekly e-newsletter, subscribe here.

If you would like to receive FOOD Magazine, subscribe here.

Leave a Reply

Your email address will not be published. Required fields are marked *