Danish 3A Business Consulting's survey on whey and lactose ingredients, which examines the market from commodities to value-added whey protein fractions and lactose derivatives, suggests that food makers are increasingly viewing whey and lactose products as an ideal means of achieve added value.
And within the dietary supplements / sports nutrition industry and the nutraceutical industry, whey and lactose products are building up a strong customer following.
Compared to other dairy ingredients, whey and its various fractions hold some of the most promising value for the food and dairy industries. With improved methods for extraction and purification, whey fractions can extend product development possibilities with new nutrition and functionality.
Traditionally, whey was a by-product with a negative value from cheese production; but in the 1950s the US started to add value to the by-product. Since this time the ingredient has seen a considerable rise in demand, notably on the back of the sports nutrition and functional food market which uses whey protein concentrates and isolates extensively.
Like functional foods and drinks, value-added whey fractions made their market entry in Asia, notably Japan, with penetration first targeting sports nutrition and dietary supplements, followed by infant formula and food.
The US and Europe came next in line, with ingredients firms initially targeting sports nutrition and dietary supplements. Some products such as high-end whey protein concentrate, whey protein hydrolysates and whey protein isolates are now enjoying growth rates as high as 20 per cent a year on the back of this increasing demand.
The 3A report focuses on specialised derivatives in this segment, including WPC35, WPC80, WPH, WPI, whey protein fractions1, lactose, and lactose derivatives2. The US remains the biggest market for WPC35 and WPC80 as well as for WPI, but the EU is following close behind.
As such the global WPC, WPH and WPI market is estimated at 395,000 MT in 2004 representing a value of just over $1 billion. The US remains the biggest producer at 187,000 MT followed by Europe with 159,000.
3A Business Consulting projects the positive trends identified to continue in the short and medium term with WPH and the whey protein fractions showing the greatest growth potential. Galactooligosaccharides, which act as prebiotic ingredients, are also projected to grow as has already been seen in Japan.
"I think the report will prove a valuable business tool for dairy ingredients companies in their strategic decision making in the area of whey and lactose products," said Tage Affertsholt, 3A Business Consulting managing partner.
Dairy companies Arla Foods and Milei are believed to be among the leading companies in Europe within WPC, WPH and WPI followed by Lactalis, Armor Protéines and Royal Friesland/Friesland Foods Domo. DMV international is currently investing €60 million in the area of whey proteins and is also expected to become a leading player in the future.
In North America a small selection of US companies, such as Davisco, Glanbia, Hilmar Cheese, Land O' Lakes, and Leprino seem to be dominating the market for WPC80 and WPI. Another important global player is Fonterra, which is by far the dominating company in New Zealand and Australia.
The report, entitled Global Market Analysis of Whey and Lactose Products 2004-2009, aims to provide strategic insight and detailed information on each of the products covered with regards to volumes, values, applications and growth rates.