Blog: Dean BestWhy innovation is a dilemma in dairy

Dean Best | 23 January 2008

Dairy needs innovation. That was the message as the leading lights in the industry headed to London yesterday (22 January) to discuss the challenge – and the opportunity – rising obesity presents to the dairy sector.

Dairy consumption is, at best, stagnant in some of the world’s key markets – due in part to the misguided belief among consumers that milk, cheese and yoghurt will make you fat.

Consumers from London to Los Angeles are consuming less dairy than nutritional experts believe is necessary for a balanced diet. Dairy consumption in the US, for example, has marginally declined over the last 30 years.

Campina MD Martien van der Hoeven believes the key to encouraging more of us to eat dairy is innovation. Others in the industry agree. Dr Cindy Schweitzer, technical director for the Global Dairy Platform, said new products containing less fat or products containing extra calcium - which reduces the storage of fat - have resonated with consumers. More innovation, all agreed, was needed.

But how easy will dairy processors find it to innovate after a year in which commodity costs reached sky-high levels? In times of financial constraint, the bottom line becomes of greater concern and R&D budgets – with their up-front cost and only the potential of long-term gain – can get slashed.

Perhaps consolidation holds the key. There has been plenty of that in the sector in recent months. In the UK, First Milk and Milk Link have agreed to merge; in Australia, suitors are circling Dairy Farmers. And van der Hoeven’s very own Campina is set to jump into bed with fellow Dutch dairy firm Friesland Foods.

With concern over rising obesity levels reaching fever pitch, dairy does need to invest in innovation – and consumer education – to thrive. However, will it only be the companies who get bigger that prosper?


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