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As dairy production costs rise, industry urged to embrace alternatives

By William Dodds

- Last updated on GMT

Milk production costs in the EU are expected to rise by 30% by 2040. Credit: Getty / Johnny Greig
Milk production costs in the EU are expected to rise by 30% by 2040. Credit: Getty / Johnny Greig
A new report has explored the opportunities for the dairy industry to tackle rising costs by investing in plant-based and fermentation-made dairy.

The study, entitled ‘The 2040 EU Sustainable Dairy Landscape: Corporate Transition in Traditional and Animal-Free Dairy’ and authored by consultancy firm Bright Green Partners, found that by 2040 milk production costs in the EU are expected to rise by 30%.

Meanwhile, Rabobank has predicted a 20% decline in traditional dairy production in Northwest Europe by the same year.

The study also projected that plant-based milk could be 10% cheaper than cow’s milk by 2040.

Such a change will occur, the report claimed, as the result of anticipated governments measures designed to reflect the environmental impact of the dairy industry.

In response, Bright Green Partners has urged manufacturers to invest in improvements to the taste and nutritional value of dairy alternatives.

It also highlighted the potential of milk made through precision fermentation. This process works through by using organisms such as yeast to produce real dairy proteins such as whey and casein,

As innovations are made and production is scaled up, the cost of precision fermentation is expected to come down.

Concluding the report, Bright Green Partners pointed at two main opportunities for adaptation available to the dairy industry – moving to reduce the environmental impact of their operations and using existing infrastructure to develop plant-based and fermentation-made products.

‘Dairy sector as we know it is set to be transformed’

Reacting to the findings, Helen Breewood, research and resource manager at the Good Food Institute Europe, said that the report was effective in setting out the “unique opportunities” ​facing manufacturers.

“Dairy companies have to use their industry expertise and ready-made supply chains to position themselves as winners in the growing alternative dairy market,” ​Breewood continued.

“The dairy sector as we know it is set to be transformed over the coming years and plant-based milk and precision fermentation have a crucial role to play in complementing more sustainable dairy farming. There is huge potential for those companies who choose to innovate and invest now – while those who fail to act risk being left behind.”

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