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Dairy Permeate Versatility Meets Food Industry and Consumer Demands, Outlook Remains Strong

New product tracking data unveiled at USDEC webinar for Chinese manufacturers confirms sharp growth trajectory for this versatile dairy ingredient

U.S. Dairy Export Council Logo

News provided by

U.S. Dairy Export Council (USDEC)

Aug 17, 2020, 18:23 ET

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ARLINGTON, Va., Aug. 17, 2020 /PRNewswire/ -- As consumers demand better-for-you options across categories, manufacturers are turning to dairy permeate as an attractive, multifunctional ingredient. Much of permeate's growing popularity can be attributed to its versatility and cost effectiveness in delivering benefits such as flavor extension, nutritional minerals as well as sodium reduction.

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New products with dairy permeate are expanding and diversifying globally, reaching an all-time record in 2019.
New products with dairy permeate are expanding and diversifying globally, reaching an all-time record in 2019.
Opportunity awaits: The versatility of dairy permeate meets both food industry and consumer demands.
Opportunity awaits: The versatility of dairy permeate meets both food industry and consumer demands.

During a webinar held August 14, 2020 for Chinese food and beverage manufacturers, the U.S. Dairy Export Council (USDEC) reported that global food and beverage new product introductions containing permeate have climbed sharply over the past decade, consecutively achieving new records in recent years. According to an analysis of tracking data from the Innova Market Insights' Innova Database and as outlined in a new infographic snapshot, new product introductions containing permeate reached an all-time high of 531 products in 2019. This was up 11% over 2018 and double the number of introductions in 2015.

"The global trends show why permeate is a strategic business opportunity for product formulators looking for functionality and value," said Annie Bienvenue, vice president, global ingredients technical marketing services for USDEC. "It's aligned with consumer and category trends, leaves room for even more potential and limitless opportunities in China as a market completely new to permeate in food applications, alongside other growth markets for permeate around the world." 

The Innova tracking data further revealed that permeate usage is expanding and diversifying globally, with launch share notably rising in Latin America, Asia and the Middle East as these regions discover the advantages of permeate. The geographic split for 2019 was exactly 50/50 with North America and Western Europe accounting for one-half and the rest of the world the remaining half. This contrasts with prior years where the majority of launches were in the early adopting regions of North America and Western Europe, specifically 58% in 2018 and 63% in 2015. On a country level, the United States continued to lead the way as the top market for new product introductions with permeate, with one in five products launched in the USA, Brazil, United Kingdom, France and the Philippines round out the top five markets respectively.

Companies continue to lean on permeate in a range of formulations because of its benefits—from browning and mineral content to its additional ability to deliver salty flavor enhancement.

While permeate is used and tracked as an ingredient across many categories, bakery leads with a 28.2% share of new product launches using permeate in 2019, or one in four products launched. Confectionery ranks second at 15.1%, followed by hot drinks at 12.4%, dairy at 12.2% and snacks at 7.7%. These categories have all seen growth from 2014 to 2019.

A deeper dive into applications using permeate reveals:

  • Baked goods such as cookies, breads, muffins, crackers and toaster pastries have continuously maintained the number one spot for the past five years, recording a 17% CAGR from 2015 to 2019.
  • Confectionery such as candy, compound chocolate and chocolate treat pieces have experienced a 32% CAGR from 2015 to 2019.
  • Hot Drinks are a large segment for permeate use, with a 5% CAGR from 2015 to 2019.The broader, diverse beverage category includes permeate use in hot cocoa, malts, fermented beverages, drinking yogurt, hot and iced coffee, etc.
  • Dairy foods, such as soft serve ice cream, are also a popular category, with a 19% CAGR during the same period.
  • Snacks are an emerging and promising category with a sharp upward trajectory over the past five years recording a 93% CAGR from 2015 to 2019. It includes corn, rice and potato-based snacks as well as finger foods, appetizers and more.

"U.S. suppliers have invested in research and development efforts to optimize permeate flavor and functionality in a variety of food and beverage applications and can also provide customers with technical and new product ideation support as delivered through the recent webinar in China," said Kristi Saitama, vice president, global ingredients marketing for USDEC ."We are excited that the world increasingly sees permeate as an attractive ingredient solution, and look forward to customers' new creations." 

The United States leads the world in permeate production with an estimated volume of 523,200 metric tons in 2019, a 16% increase from 2014. U.S. permeate production is projected to continue to increase over time, as new facilities come online, enabling a stable, quality supply.

To better understand U.S. permeate proliferation, it is helpful to see how it is linked to other high quality ingredients. A coproduct from the manufacturing of whey/milk protein concentrate (WPC/MPC), permeate is a high-lactose, mineral rich, dairy ingredient produced through the removal of protein and other solids from skim milk or whey using physical separation techniques. Innovating with this extremely versatile ingredient further builds upon U.S. dairy's strong sustainability story by utilizing every drop of value milk has to offer.

Visit ThinkUSAdairy.org for more information on permeate nutrition, functionality and applications, and to:

  • Download a new infographic snapshot on global permeate introductions
  • Download an overview of milk and whey permeate
  • Visit the product prototype database

About U.S. Dairy Export Council
The U.S. Dairy Export Council® (USDEC) is a nonprofit, independent membership organization that represents the global trade interests of U.S. dairy producers, proprietary processors and cooperatives, ingredient suppliers and export traders. USDEC aims to enhance U.S. global competitiveness through programs in market development that build global demand for U.S. dairy products, resolve market access barriers and advance industry trade policy goals. As the world's largest producer of cow's milk, the U.S. dairy industry offers a sustainably produced, world-class and ever-expanding portfolio of cheese varieties as well as nutritional and functional dairy ingredients (e.g., skim milk powder, lactose, whey and milk proteins, permeate). USDEC, together with its network of overseas representatives around the world, also works directly with global buyers and end-users to accelerate customer purchasing and innovation success with quality U.S. dairy products and ingredients.

SOURCE U.S. Dairy Export Council (USDEC)

Related Links

https://www.thinkusadairy.org

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