Global Whey and Lactose Markets Growing

AARHUS, DenmarkAccording to a new report on whey and lactose products from 3A Business Consulting, whey and lactose ingredients continue to show positive volume growth rates but less in value terms, although prices have recovered to a more-normal level in 2010 after a significant drop in the 2007 to 2008 period.

The extreme price increases in 2006 and first half of 2007 forced many food manufacturers to replace expensive whey and lactose ingredients with cheaper food ingredients, resulting in less demand for products. However, demand has been re-established at previous levels in 2010, assisted by lower prices and recovery of the global economy, says Tage Affertsholt, Managing Partner of 3A Business Consulting.

The report, Global Opportunities for Whey and Lactose Ingredients 2010-2014, says whey ingredientswhey powder, whey proteins and whey protein fractionsrepresent a global market value of approximately USD 5 billion in 2010 and are forecasted to reach approximately USD 6.4 billion in 2014. This corresponds to a CAGR of 4% at constant prices. Lactose, pharmaceutical lactose, permeate and lactose derivatives are worth more than USD 1.6 billion in 2010, and an estimate near USD 2 billion in 2014 resulting in a CAGR of 3%.

The report identifies the major companies in the whey and lactose ingredient industry as the leading dairy and cheese companies in the world such as Lactalis, FrieslandCampina, Fonterra, Arla Foods, Glanbia, Murray Goulburn and Hilmar. Specialty whey- and lactose-ingredient companies such as Meggle, Euroserum, Milei and Davisco also play a significant role with various speciality products. 3A notes that the worlds two largest dairy companiesNestlé and Danoneare not producers, but are major users of whey and lactose ingredients.

The report identifies several product trends. For whey, the high-end protein products WPC80, isolates and hydrolysatesare growing by double digits, but whey powder and other low-end products have stagnated. The products mainly responsible for the high-end protein growth are in nutritional sectors, particularly sports and energy nutrition products.

In the lactose product group, permeate, lactose derivative galactooligosaccharides and to some extent pharmaceutical lactose experienced high growth. On the other hand, standard lactose shows limited growth.

The EU-27 and the United States were identified are the major markets for whey products, however Asia is rapidly approaching the top spot for lactose. From 2010 to 2014, Asia, including China, will experience the highest growth in absolute and relative terms. The EU-27 and the United States are also the worlds largest producers of whey and lactose products. The United States has a stronger growth rate than the EU. The United States is number one when it comes to exports.