The U.S. Dairy Exporter Blog: Market Analysis, Research & News

  • Tell the Positive Story of Permeate

    By Kristi Saitama January 12, 2016

    Education and technical support are keys to unlocking the dairy ingredient’s global potential.

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    Three reasons U.S. dairy suppliers are excited about permeate:

    • It ticks all the right boxes for today’s food formulators: versatile, functional, economical, clean-label friendly, nutritionally advantageous.
    • The United States is the world’s leading permeate producer, accounting for an estimated 40 percent of global supply, and U.S. output is growing.
    • Even though its use is rising globally, permeate is underutilized, meaning there is sizable room to expand the market, particularly since the industry is taking steps to address key reasons for underutilization.

    But increasing permeate use, and U.S. permeate exports, begins with knowledge transfer. To overcome unfamiliarity with permeate in food applications and reveal its true worth and potential, it is imperative to communicate its derivation, make-up, functionality and applications to buyers and end-users.

    "Permeate has a great story to tell, starting with sodium reduction and going right on through to browning, flavor enhancement and various nutritional properties,” says Vikki Nicholson, USDEC senior vice president, global marketing. “U.S. suppliers have invested in outlining the sensory, functional, nutritional and cost-savings benefits of whey and milk permeates and in developing proprietary permeates with specific flavor and functionality advantages. The industry as a whole has spent considerable effort fine-tuning permeate applications.”

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    Permeate is still relatively new as a food ingredient—so new that many end-users not only lack awareness of how differentiated permeate products have become, they lack experience formulating products with it. Substituting permeate for other ingredients, for example, is not a 1-to-1 proposition, so it takes R&D trial and error to optimize its use in product formulations.

    The benefits also get clouded because while some companies have focused on selling permeate with distinctive functionality and sensory characteristics tailored for food use, others market more generic permeate that could be used for food or feed.

    “Customers may not recognize the difference and might gravitate towards cheaper options that aren’t optimized for food use,” says Nicholson. “This, in turn, could create a negative experience that discourages them from switching to permeate.”

    A CODEX standard to boost global trade

    The industry can certainly overcome the knowledge gap. In fact, the dairy sector accomplished a similar feat when it helped usher in the acceptance of sweet whey as a valued food ingredient. The same transition can happen for permeate.

    Current work at the Codex Alimentarius Commission may help. A global permeate standard is working its way through the Codex standard-setting process and could significantly boost trade.

    “Having a CODEX standard is an important milestone in permeate acceptance. It will help to foster greater customer and end-user confidence by providing a definition and safety assurances in regions where uncertainty or limitations on permeate for food use exists due to lack of experience. That would in turn help expand usage, adoption and growth,” says Nicholson.

    USDEC is also helping to lay the groundwork to elevate permeate to a value-added addition to the U.S. dairy ingredient portfolio. We have developed market-specific strategies focusing on the various benefits of permeate and are taking action to transfer knowledge to end-users in a way that opens sales to U.S. suppliers.

    In the last 12 months, USDEC has focused on permeate education at a number of events, including confectionery seminars in Vietnam, the U.S. Dairy Business Conference in Singapore, the U.S. Dairy Innovation Conference in Boise, Idaho, a reverse trade mission from the Middle East and a permeate workshop in Beijing. Our permeate initiative has also included application innovation support, permeate brochures in multiple languages, media outreach and a greater permeate digital presence through ThinkUSADairy.org.

    U.S. suppliers have contributed to the learning process and can continue to help further the cause.

    “The advice I would have is to continue to share with customers the clear evidence of the functionality, sensory and cost advantages of using permeate and provide technical assistance on how to overcome knowledge and technical barriers to reformulate with permeate,” says Nicholson. “The interaction with customers shouldn’t stop at a sales transaction but follow on all the way through to product development and manufacturing, so that they have a successful experience with permeate.”

    New Permeate products dramatically rise

    From 2010-2014, the number of new products labeled as containing permeate rose at a compound annual growth rate of 64 percent, according to Innova Market Insights. More than half came out of the United States and Western Europe, but food and beverage manufacturers in Asia, the Middle East and Africa are rolling out more products with permeate as well.

    Innova data further reveals processors are using permeate across a range of products: dairy, baked good, hot drinks, ready meals, confectionery.

    “We see that as a positive sign. The new product trend indicates end-users are discovering permeate’s benefits,” says Nicholson. “As word spreads and more companies become familiar with permeate's capabilities, more will likely follow suit and expand geographic and product category use.”

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    The U.S. Dairy Export Council fosters collaborative industry partnerships with processors, trading companies and others to enhance global demand for U.S. dairy products and ingredients. USDEC is primarily supported by Dairy Management Inc. through the dairy farmer checkoff. How to republish this post.  

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