British and European milk producers may be feeling the pain from sluggish domestic demand and lacklustre prices, but things are set to change dramatically over the next decade.
On the face of it, the abolition of milk quotas across the EU in April 2015 might be expected to cause a further slump in prices. However, milk markets are becoming increasingly global, and demand from emerging markets looks set to outstrip any growth in supply from established ones over the next 10 years, driving up prices and promoting increased production, according to the latest Tetra Pak Dairy Index report.
Overall, global demand is expected to rise by 36% by 2024, says Tetra Pak, with most of that growth in the emerging markets of China and other Asian countries, Latin America and Africa. Closer to home, changing habits such as skipping breakfast and on-the-go snacking (especially among younger consumers) will remain a challenge, so innovative new products will be needed to drive more modest growth in established markets.
“The outlook for the global dairy industry remains extremely strong, particularly for companies that are able to tailor their operations to serve both the booming demand in developing markets, and address the need for exciting new products among consumers in mature geographies,” said Dennis Jönsson, president and chief executive of Tetra Pak Group, at a webinar to launch the new report.
The research predicts that eliminating EU production quotas will help to unlock growth of 11% in raw milk production between 2012 and 2023. In fact, producers have already started to ramp up production in the run-up to next year, with Austria, Germany, Denmark, Poland and Cyprus all accepting fines from the EU for exceeding their quotas for 2012/2013.
However, a lack of European processing capacity is a big potential obstacle between the raw milk producers and consumers at home and abroad, according to Jönsson: “Rapid investment in additional processing capacity is a real requirement The European Commission reported in May 2014 that processing capacity in Europe was operating at saturation point.”
In the short term, unpredictable factors such as the weather and other commodity prices mean milk prices will remain volatile in the UK and Europe. However, Jönsson maintains that the longer-term trend can only go one way: “While prices have dropped for most of 2014 so far, this is not expected to be a sustained trend. Prices are predicted to continue to increase over the next 10 years as demand booms.”
Some major investment in processing is already happening. For instance, the Tetra Pak report highlights last year’s decision by Irish processor Glanbia to build a new ultra-high temperature (UHT) facility in Monaghan to produce long-life liquid milk and cream for export to emerging markets. The plant has already started to manufacture a range of standard and fortified UHT milk and cream products, including export versions of Glanbia’s Avonmore milk brand.
Against this backdrop, maximising the capacity of existing dairy installations is also a key priority, according to Dr Martijn Fox, food process scientist with Dutch research organisation NIZO food research: “The driver for process improvements is most often capacity, with other benefits like saving energy and improving yield happening at the same time.”
Process bottlenecks (Return to top)
For example, exports beyond the EU often take the form of powdered dairy products, with the final spray-drying step typically being the process bottleneck that limits the throughput of the production line. By the time the product reaches the spray dryer, it has already had water removed so that it comprises around 50 to 55% dry solids in the case of straightforward milk powder. “It’s still a fluid but it’s starting to get fairly thick,” says Fox.
Crucially, increasing the dry matter in the feed of a spray dryer from 50 to 51% enables processors to boost drying capacity by 4%, as well as reducing energy consumption in the dryer by 3%. However, the viscosity of the feed needs to be closely controlled and carefully matched with the design of the dryer nozzles or the viscous liquid won't be successfully atomised.
NIZO’s work takes a two-pronged approach. First, the team determines the viscosity experimentally as a function of factors such as solids content, temperature, pH and mineral addition, among others. Second, NIZO’s spray-drying pilot plant is used to optimise the process by trialling an array of different nozzles and process conditions during a series of test runs. “The advantage of this set-up is that we can change the conditions very quickly,” says Fox.
While maximising capacity may be the main priority now, the Tetra Pak research predicts that global milk scarcity will become a big issue over the next decade. With this in mind, boosting yield and minimising waste will become even more important both through the supply chain and once products reach the consumer.
At the University of Reading, a three-year project into blending higher-fat Jersey milk with the more usual Holstein milk for Cheddar cheese making has demonstrated improved yields of up to 35% more cheese per litre, without requiring changes to the cheese-making process.
According to the researchers, Jersey milk includes many more, smaller protein micelles. This provides a greater total surface area to capture the milk’s larger butterfat globules and the result is higher output. Financial modelling showed that as much as 9.75p additional profit per litre can be achieved, while taste tests found no adverse impact on quality.
Back at NIZO, processing and quality specialist Arjan van Asselt focuses on preventing losses during product changeover and cleaning. This impacts on both yield and waste reduction. “Some big dairy installations do mainly bulk products but often a specific production unit is held responsible for all the specialities, like cheeses or infant formulas. These units, along with speciality companies, may make many varieties in short production runs, perhaps on-demand. In my experience, every company we’ve worked with will have at least a 10 to 20% possibility to reduce losses, not because they’re not doing very well, but because it’s something that must be constantly optimised.”
He recommends reviewing product losses at least every six months, because processes will be changing constantly in order to optimise them in other ways. Using modelling tools, the team can find the best-case product losses and compare those with what the production unit is achieving.
Review production losses (Return to top)
Van Asselt claims the key to success is accurate measurement and monitoring throughout the process: “Sensors and data acquisition are getting cheaper and cheaper, so analysing a continuous stream of data is getting easier. Companies can normally look at overall product loss themselves, but we can help determine where it's come from.”
Another way to tackle product losses during cleaning is to reduce the need for cleaning in the first place. NIZO and a consortium of partners have been investigating the use of ultrasound to prevent fouling, making heat exchangers essentially self-cleaning and allowing processors to extend the length of production runs. The original idea was to design a bolt-on device that could be used on existing plate heat exchangers to generate vibrations that prevent proteins and microbial contaminants from sticking to the walls.
Fox reckons they’ll need to double the run time between shut-downs for the project to be work commercially. “We see a value in it and we’re trying to prove it right now,” he says. “We have good indications that it works and we see a decline in biofouling rates. What we have to do is finish our measurements. We’ll continue on that over the next few months, then we hope to continue with partners to develop a commercial device.”
Boosting shelf-life (Return to top)
Techniques to boost shelf-life offer another way to combat waste, even after the product reaches consumers. For example, GEA Westfalia Separator announced last year that its membrane-based Prolong process for extended fresh life milk achieves at least 21 days.
More recently, Tetra Alsafe for extended shelf-life milk production allows products to continue to circulate at refrigeration temperatures, even if there’s a hold-up on the filling line. The improved temperature control promises big increases in shelf-life, although the specific gains depend very much on the conditions elsewhere in the supply chain.
Alan Stack, beverage customer team manager at Tetra Pak says: “In all factories the product will be stationery for periods of time due to filling equipment stoppages. The pipeline between the aseptic vessel and the filling line is typically long and passes through areas where the temperature is well above the required maximum of 4°C. This increases the risk to product quality.
“The new Tetra Alsafe for ESL overcomes this problem by keeping the product circulating, maintaining the temperature and thus helping to guarantee its extended shelf-life. The result is a more robust system and, while the final shelf-life will depend on conditions within the entire supply chain, in the UK a life of around 65 days is likely to be economically attainable.”