Opportunity remains in dairy bioactives despite departures

12-Nov-2009 - Last updated on 12-Nov-2009 at 14:07 GMT

Related tags Milk

Some companies are abandoning research into dairy bioactive ingredients because of high costs and regulatory uncertainty but market growth is still expected to be high, according to new research.

3A Business Consulting has just published a report on dairy-derived bioactive ingredients that puts the size of the market at 30, 000 MT, or $700m in value terms. Current market growth is estimated to be 10 to 20 per cent per annum and the expectation is that the market will continue to expand at a high rate.

But making accurate growth forecasts is complicated by the health claims situation in the EU and other regulatory and research uncertainties worldwide. Tage Affertsholt, managing partner at 3A Business Consulting, told NutraIngredients.com that the feedback from industry is that the very restrictive approach to health claims adopted by the European Food Safety Authority (EFSA) will hamper growth potential.

Affertsholt said: “Some companies are giving up and leaving the game to concentrate on more traditional dairy ingredients.”

Risky business

Dairy bioactive ingredients is a “high risk – reward business area”, according to Affertsholt. Investment in money and time is needed to complete the research and regulatory work necessary to get an ingredient to market and there is no guarantee that the end result will be a success.

While some companies have decided that the risks are too great, others are continuing to invest, and 3A Business Consulting predicts a continuation of high growth rates.

Improved scientific documentation is expected to be the main driver for growth. Affertsholt said good research and data on specific benefits can really transform the fortunes of an ingredient on the marketplace.

Market rewards

Affertsholt cited the milk-derived tripeptide tensVida from DSM as an example of the sort of ingredient that can bring high rewards. Winning the NutrAward this year for the most innovative, evidence-based health and nutrition ingredient, the blood pressure management product has the necessary science behind it to attract plenty of attention from manufacturers.

Once a company has completed the necessary research and regulatory work to bring a functional ingredient to market, it can reap the rewards for being a market leader. Affertsholt said those companies that stay in dairy bioactive ingredients will be the winners of the future.

Unlike some of other functional ingredients, Affertsholt said dairy based ones have the advantage of being perceived as natural and healthy by consumers.

The infant formula market is also rich in opportunity for makers of dairy bioactive ingredients as manufacturers look to develop products that are as close to human milk as possible. Affertsholt mentioned Arla Ingredients’ commercialisation of the whey protein osteopontin as an example of infant formula innovation that will help grow sales, and secure a valuable reputation for high quality science.