Dynamic dairy solutions
Ireland’s dairy industry is well positioned to lead the way in emerging categories thanks to quality and customisation, explains Bord Bia’s (the Irish Food Board) China manager, Conor O’Sullivan
Article appeared in issue 4, 2020
Ireland is one of Europe’s leading dairy exporters. Irish dairy exports to China in 2019 exceeded €557 million, making up nearly 62 per cent of the value of total Irish food and drink exports to China in the same year. In the first five months of 2020, exports of Irish dairy to mainland China exceeded €207 million. Infant food is the largest category of Irish exports, valued at nearly €430 million in 2019. Irish exports of infant food to mainland China from January to May of 2020 exceeded €168 million. Irish infant food is trusted by Chinese mothers for its natural ingredients, world-class safety and quality standards, and its research capabilities to deliver next-level nutrition. The enormous success of brands like Wyeth Illuma, Abbott Eleva and Danone Nutrition are testament Ireland’s strengths in these areas.
The demands of Chinese consumers are ever increasing. “Trust remains essential: consumers demand both stellar reputation for food safety and guarantees of authenticity,” said Bord Bia’s China manager, Conor O’Sullivan. “In the past those used to be the main buying considerations, now they just get you on the shortlist.”
Conor says consumers in China spend significant time and effort researching and understanding the differences between the products they are buying, even to the level of understanding the science behind them. “Now, more than ever, Chinese consumers are swayed by the nutritional and proven functional benefits of dairy products and this is leading to increasing premiumisation as consumers drive the need for industry innovation and scientifically led product development.” And this trend is not just affecting the infant formula category. “Across the board, the need for advanced nutrition is booming,” he says.
Bord Bia’s Future Proofing research on the effects of Covid-19 suggests that: 'protective health management' will emerge as a trend and that foods that can protect our defence systems are likely to grow in popularity. Mintel’s China research supported this assertion and identified that Chinese consumers’ priorities had changed dramatically, with healthy eating becoming a higher priority of 70 per cent of respondents (Mintel, 2020).
This is positive for Irish exports to China. It has been widely reported by Bord Bia and others that Chinese consumers’ confidence in the food safety standards of domestic products is poor and imported dairy, meat and seafood are generally considered to be healthy, safe sources of protein with the European Union being seen as a trusted food source (Science Direct 2019). China’s declining birth rate limits the long-term growth potential of the infant formula category but this is just one stage of life in which consumers need specialised nutrition. Increasingly, Ireland’s dairy industry is applying its capability to new areas of specialised nutrition. “Specialised nutrition is about providing a boost to health at every stage of life,” explains Conor. “As China’s elderly population grows, and young consumers increasingly pursue healthy, active lifestyles, our industry is focused on research and innovation to provide these consumers with the nutrition they need.”
Ireland’s industry is well positioned to take a leading role in these emerging categories. Bord Bia has led a number of research projects in China to help Ireland’s industry understand the dynamics of these growing opportunities, focusing on insights across areas like adult nutrition, dairy in foodservice, cheese, and more. “This year, we are expanding our ability to generate insights in China, and act upon them, with a dedicated insights specialist for the Asian region.”
The boom of China’s fitness culture has led to surging demand for performance nutrition. Dairy provides the rich nutritional profile that athletes require to recover and strengthen. Globally, Ireland is a leader in sports nutrition, home to world famous protein supplement consumer brands and established capability to supply Chinese food producers with the advanced ingredients required to fortify their products with added functional benefits.
Irish companies are increasingly focused on supplying China’s foodservice industry with customised dairy ingredients. Ireland’s industry can provide restaurants and bakeries with products including cheese, butter and cream. In the last three years, Irish cream exports have more than doubled, and butter exports quadrupled as baking and bakeries grow ever more popular. Our industry partners with chefs and in-house product development teams, to develop new products and creative recipes in which these products can star. Similarly, dairy powders are a key ingredient supplied to manufacturers of baked goods. Cheese, in particular, is a growing opportunity. Ireland’s cheese exports to China quadrupled in 2019, reaching €14 million, and have grown tenfold in the last four years. In the first five months of 2020, exports of Irish cheese to mainland China reached €3.8 million.
Conor adds: “Cheese is really starting to take off in China. Ireland is quickly expanding its cheese production and has worked closely with partners in Asia to develop products that meet their precise functional requirements.” Cheeses like cheddar and mozzarella have a wide range of applications across foodservice, from pizzerias to bakery outlets. “Our industry can tailor features of the cheese, like stretchiness, cooking temperature, colour, and so on, for specific applications. “It’s a very advanced process that sets our industry apart.”
“Across all categories, Ireland’s dairy industry is focused on working closely with key customers to develop and deliver solutions that meet their specific application requirements,” Conor says. This position as a solutions provider means Ireland’s dairy industry reacts quickly to market trends. “We supply our customers with the advanced ingredients that allow them to capture those opportunities and grow their business," he concludes.