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Developments in Consumer/Customer Needs Related to Whey Based Products. Richard Field, Orrani Consulting. Agenda. Introduction Today’s Topic Consumer Needs ‒ What NPD Tells Us Customer Needs ‒ Industry Perspectives Case Studies Conclusions. Worldwide since 1993. - PowerPoint PPT Presentation
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Developments in Consumer/Customer Needs Related to Whey Based Products
Richard Field, Orrani Consulting
1
Agenda 1. Introduction
2. Today’s Topic
3. Consumer Needs ‒ What NPD Tells Us
4. Customer Needs ‒ Industry Perspectives
5. Case Studies
6. Conclusions
2
Confidential Dairy Industry Consulting & Market Research
− Global trade/industry/key player/key issue analysis
− Countries, categories, channels & customers
Typical Whey Project Customers
EquipmentManufacturers
Whey Processors
Whey TradersWhey End-
Users
Dairy Industry Organizations
Investors in Whey Processing
Government Departments / Export Boards
Worldwide since 1993
3
Whey − a Highly Valued Protein
Consistent role in new product protein citations
H1 - 2011
H2 - 2011
H1 - 2012
H2 - 2012
H1 - 2013
H2 - 2013
0%10%20%30%40%50%60%70%80%90%
100%
18% 16% 17% 17% 18% 17%
Textured Vegetable Protein
Pea Protein
Vegetable Protein Hydrolysate
Whey Protein
Soybean Proteins
Wheat Protein
4
Successful in Growth Markets
Asia key in new product label protein citations for whey
2009 2010 2011 2012 2013 20140%
10%20%30%40%50%60%70%80%90%
100%
39%35%
41% 40%36%
42%
34%35%
33% 33%37%
35%
13% 18%16% 15% 15%
13%
Middle East & AfricaLatin AmericaEuropeNorth AmericaAsia Pacific
5
Opportunities for Whey In Multiple Segments
Dairy
Baby Food
Snacks
Bakery
Desserts & Ice Cream
Other Beverages
Chocolate Confectionery
Meals & Meal Centers
Sauces & Seasonings
Processed Fish, Meat & Egg Products
Soup
Sugar & Gum Confectionery
Savoury Spreads
Hot Beverages
Side Dishes
Sports & Energy Drinks
Breakfast Cereals
0% 2% 4% 6% 8% 10% 12% 14% 16% 18%
Includes concentrates, mixes, sports shakes &
smoothies
Whey Protein's Role in Food/Beverage NPD, 2011-2014
6
Consumer Needs – Key Claims, % All Launches inc. Whey Protein
7
No Add
itives
/Pre
serv
ative
s
Low/N
o/Red
uced
Alle
rgen
Micr
owav
eabl
e
Ease
of U
se
Low/N
o/Red
uced
Fat
Seaso
nal
Prem
ium
Low/N
o/Red
uced
Tra
nsfa
t
Babie
s & T
oddl
ers
(0-4
)
Slimm
ing
0%
4%
8%
12%
16%
2009 2010 2011 2012 2013 2014
Baby Food Claims ‒ % All Launches inc. Whey Protein
8
Brain
& N
ervo
us S
yste
m
Diges
tive
Prebi
otic
Bone
Health
Imm
une
Syste
m
Vitam
in/M
iner
al F
ortif
ied
Low/N
o/Red
uced
Alle
rgen
Low/N
o/Red
uced
Sug
ar
Organ
ic0%
10%20%30%40%50%60%
2009 2010 2011 2012 2013 2014
Customer Needs ‒ Industry Perspective
Ideal Supplier? Strategic Focus, Customer Focus, Partnership-oriented, Innovative, Reliable, Responsive
Pricing? Competitive Price, Cost In Use, Transparency, Visibility
Product Offer? Product Range, Quality (Product, Packaging), Functionality, Traceability, Sustainability
Wider Capabilities? Assured Supply, Availability, Technical Support,
In-market Presence, Effective Supply Chain
Wanted! Partners who are Competitive, Flexible, Customer Focused9
Case Study: Sustainability
• An increasing focus for some major dairy buyers (multiple drivers)
• Multiple interpretations: Environmental Social Economic Traceability
• Multinationals initial focus ‒ cocoa, palm oil, horticulture >> dairy
• Challenges for dairy/whey (% in formulation? GHG myth! Sourcing?)
• “Chain of custody” now part of whey processors’ marketing
10
Case Study: WPC34/Infant Nutrition
• Growth in infant nutrition contrast edible & animal feed/milk replacers • Growth despite high lactose %, formulation challenge (vs WPC80)• + points vs WPC80: lower fat, lower cost on a pure protein basis • General industry shift up whey protein value chain
• Europe > WPC80• US > WPC34 IF grade + WPC80
“The US industry used to be all about scale/volume/throughput but it has moved to value add, improving filtration processes to get a
consistent mineral profile”
11
Case Study: GOS/Infant Nutrition • A clear success story with take-up especially in infant nutrition• Limited buyer options: lead supplier, few other serious players• Chinese producers using imported lactose!• New entrants − downward pressure on prices and margins• HMOs…potential for usage to start to erode GOS usage?• Has industry been swift enough to identify demand trends?
“The US industry has been asleep at the wheel with GOS (the HMO threat is)… the penalty for coming to the market much too late”
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Conclusions • Multiple market opportunities ‒ demand growth, new applications,
new geographies
• Successful whey suppliers have aligned with key customer needs ‒ Product, Commercial Offer, Service, Business Approach
• Continued success demands an increasingly customer-centric ethos and more market awareness than ever ‒ no falling asleep at the wheel!
13
