Like all sectors of the food industry, the dairy market is always changing. According to Dairy Foods' 2015 State of the Industry Report, sales of products like whole milk and butter are on the rise, while demand is declining for products like skim milk and ice cream. Consumers are buying more natural and less processed cheeses. And though the yogurt market remains strong, spoonable yogurts may be reaching their peak.
To get more insight on the dairy sector from a processing standpoint, we asked Mark Litchfield for his thoughts on the industry overall, with special emphasis on separators, his area of particular expertise.
Litchfield is the Director and Head of Dairy Separation Sales at GEA North America. As such, he oversees new equipment and services for the 1,500 separation units GEA has installed in dairies across North America. His team's major areas of operation include whey processing, cheese equipment, fresh cheese products, yogurt, liquid dairy, specialty-ingredient dairy, butter, and egg processing. Litchfield joined GEA in 2004 after working as a food processing engineer at several international locations, including his native New Zealand.
While Litchfield's focus is on dairy separation, he emphasizes that GEA as a whole offers many more products and services. A Germany-based engineering company that operates in 65 countries, GEA provides a wide range of equipment and services in the food and beverage, chemical, and pharmaceutical industries. In terms of food processing, GEA offers everything from flow components and evaporators to packaging technology and refrigeration equipment.
Here are the major challenges Litchfield sees the dairy sector tackling today:
- Maximizing product value
- Managing bacteria levels
- Extending shelf life
- Addressing changes in milk and butter consumption
- Predicting what's next
Maximizing product value
According to Litchfield, one of the biggest challenges for dairies is maximizing product value. In today's market, this is true for dairies of all sizes.
“Whether the dairy is large or small, it's about getting the most value out of the product,” he says. “Some of the things that we would do for only the largest dairies 20 years ago are becoming more common even for smaller, family-owned dairies.”
He offers the example of whey processing, where processors are looking for higher grades and larger whey fraction percentages. One way to address these demands is through high-quality separating equipment.
“In terms of getting your downstream processes running optimally, clarification and separation are critical. Your membrane system won't run well if you have issues with clarification or separation.”
The issue of maximizing whey value is gaining importance in cheese production. This is especially true as companies move into higher-end products and/or a greater variety of products.
“If you go back 20 years, there were companies that specialized in, say, cheddar or pizza-style cheeses,” Litchfield says. “Now a lot more companies are producing different types of cheese — more European-style, Mexican-style, and fresh cheese. And that potentially creates a lot more fines in the whey product.”
Without treating the whey to eliminate such fines, he notes, “you can't get the value that you should out of the whey streams in the cheese plants.” GEA's line of separators for whey processing are designed to minimize cheese fines in whey, as well as to recover fines and other valuable constituents for further use.
Managing bacteria levels
Bacteria levels in dairy products must be carefully monitored and controlled. This becomes particularly important as dairy ingredients appear in formulated products, such as nutritional products and baby formula.
Again, the cheese market provides a good example. “Processors are looking for a lot more functionality out of the cheese, and for higher and higher yields. If you have a lot of cut losses and issues when you go to slice the product, bacteria removal is a good way to ensure you get that functionality through the full maturation cycle of the cheese.”
Litchfield notes that tearing can be a particular problem for the large amount of cheese product that goes to institutional users, such as school programs, which often want very thinly sliced cheese. “When you go to thinner and thinner slices, more bacterial growth means a higher propensity to tear and other handling issues.”
He adds that when processors are putting milk powder into cheese, starting with a higher or lower level of spores will affect cheese quality.
Further, certain types of cheese are particularly susceptible to bacterial issues. Higher-moisture Mexican-style cheeses, for instance, are prone to bacteria growth. “Even though we enjoy some of the best quality milk in the world,” Litchfield says, “with these more fresh-type cheeses, you've still got challenges with respect to the shelf life.”
Another example he cites is Swiss-style cheese. “The eye formation is very critical. A certain amount of non-propionic bacteria is important to flavor development, too much and you get irregular eye formation. Apart from negatively affecting the appearance of the product, it often produces off flavors and other problems that result in downgrading of the product.”
Given the importance of managing bacteria levels, it's no surprise that there's a growing interest in separators. “We're seeing a lot of interest in bacterial separation, aka bacterial clarification.” GEA's bacterial clarifiers can be used for drinking milk as well as cheese-making milk.
In recent years, Litchfield has seen increasing demand for dairy products that maintain their freshness longer. Part of this is due to a changing industry structure.
“Fewer and fewer factories are servicing larger geographical areas,” he says. “So the distribution chain is demanding something longer than the 20 days that was traditionally required for liquid dairy.”
He notes that shelf life can be affected by bacteria and spores, as well as by their byproducts. “Traditionally, the solution was to sterilize or pasteurize the product, which would deactivate the majority of the spores,” he explains. “But the issue there was that all the byproducts ended up in the product.”
Today, newer processes allow dairies to achieve a longer shelf life for products like liquid milk, without using additives, preservatives, or “extreme processing steps.” Litchfield notes that these new processes produce a very high-quality flavor profile — one that's indistinguishable from traditional drinking milk.
One innovative process removes bacteria using a physical property that's always been with us: gravity (g-force). “We have a high-centrifugal force system to increase g-force on the bacteria and spores while providing for a very high yield,” he says. “On a large system, we get losses as low as five gallons per hour.” This solution virtually eliminates losses while still reducing bacteria.
Addressing changes in milk and butter consumption
Extending shelf life may also help the dairy sector address another current challenge: declining milk consumption. Even as whole milk sales have increased slightly, milk consumption overall has been weakening for years. Today, Americans drink 37% less milk than they did in 1970. So, dairies are seeking ways to bolster and expand the market.
“Dairies are looking for places to grow,” Litchfield says. “By getting product differentiators, there's hope that there will be more milk consumption throughout the market.” According to Dairy Foods, liquid milk producers might consider approaches such as smaller formats, flavored products, value-added products, functional milks, and aseptic packaging.
A more positive consumption trend for dairies is the increasing demand for butter and other full-fat products. “Dietary trends are moving toward dairy fat not necessarily being a bad thing,” Litchfield says. Recent studies have found that dairy fat may lower the risk for diabetes and heart disease, and even curb weight gain.
Litchfield points out that McDonald's and some other large players are putting butter back into their products. This increased demand is driving equipment updates in the industry.
“Some of our clients have systems that are 30 to 40 years old, so they've taken the opportunity to update their equipment to the new generation churns.” He explains that the latest churning equipment provides more automation and better control of moisture contents for superior product .
Future trends in the dairy sector
When asked about trends and challenges he expects to see in the future, Litchfield offers several ideas.
First, he expects to see continued growth in fermented products. “We had a great success with Greek yogurts, but we're already seeing a big move,” he says. Indeed, sales data suggest that the Greek yogurt boom is on its way out.
But even as Greek yogurt sales stagnate, Litchfield sees opportunities for growth in other fermented products, like labnehs and quarks. He suggests that we may see more savory offerings, protein-enriched drinking yogurts, and other products in this sector.
Litchfield also foresees additional activity in extending the shelf life of fresh milk. For example, Kroger won 2015 plant of the year from Dairy Foods for their new Denver facility. Promoting longer shelf life for fresh milk is “one of the key attributes to that plant.”
Other predictions from Litchfield include more development of specialty cheeses like blue cheese and feta, as well as more production of whey protein isolates. He further expects growth in the production of ultra high temperature (UHT) milk for export, as international demand for the product grows. Exports of other dairy products, such as high-end cheeses, are another trend on his watchlist.
Finally, as in all sectors of the food industry, dairies are adjusting to FSMA. Litchfield suggests that the product traceability and recall requirements could be particularly challenging.
If you're in the dairy industry, what trends and challenges do you see heading our way? Let us know on Twitter!