When we think of Irish dairy products, everyone recognises liquid milk, butter and cheese, and people more familiar with the industry will quickly identify milk powders. Less well known are casein and caseinates – two protein-dense, value-adding and highly functional dairy products of which Ireland is one of the most technically dexterous and advanced producers in the world.
What is casein?
Casein is a protein-dense powder and as a dairy ingredient is mainly utilised for that high-protein content and emulsification properties which lend to various functional applications including the production of analogue cheese, mainly for pizza toppings, yoghurts, liqueurs, bakery/confectionary, pharmaceutical and sports nutrition products.
The two main casein specifications are acid and rennet casein and both are derived from pasteurised skimmed milk
Its functionality and popularity in sports nutrition products is justified owing to its slow digesting properties that counter the catabolic (deterioration) effect on muscles. The multi-functionality and benefits of Casein also extend to glazes for baked goods as well as texture and binding properties in confectionary products.
Casein is also widely used in non-consumable and textile products including adhesives, plastics and cosmetics.
The two main casein specifications are acid and rennet casein and both are derived from pasteurised skimmed milk and distinguished by either the addition of an acid or a rennet enzyme.
What is caseinate?
From acid casein, caseinate can be produced which in effect is a neutralised protein powder, owing to the addition of an alkaline ingredient, such as sodium hydroxide. As distinct from casein, caseinate is soluble in water and therefore has wide-ranging functionality as a dairy ingredient including viscosity, temperature stability, emulsification and is an excellent protein source (90% protein).
Calcium caseinate is produced by adding a calcium compound, typically calcium hydroxide
Applications for caseinate are manifold and include coffee creamers, milk replacer, meat products, soups, salad dressings and nutritional food and beverages.
Calcium caseinate is produced by adding a calcium compound, typically calcium hydroxide.
In so doing, functionality and application extends to whitening and dispersability, desirable functions for the production of coffee creamers, milk replacers and deserts as well as adding mineral fortification.
Casein and caseinates market
Ireland is the second-largest exporter of Casein in the world. In 2019, Irish exports topped 55,000t reaching 50 countries, just behind New Zealand’s export total of 57,000t.
The US, Mexico, Spain, Italy and the Netherlands are our main export markets and between them last year accounted for close to 65% of all Irish casein exports (see bar chart).
For the first five months of 2020, the value of Irish casein exports has increased over 36% to €122.9m and in volume terms is on par (18,000t) with the same period last year.
While New Zealand is the world’s largest caseinate producer with exports in excess of 30,000t, Ireland is the third largest, exporting approximately 2,200t with the Netherlands, Denmark, Germany and United Kingdom our main markets in 2019.
Market performance and outlook
Casein and caseinates are grouped among the more high-value dairy ingredients and powder products owing to both their functional and chemical composition. However, both are subject, as all dairy ingredients tend to be, to price volatility and market dynamics.
Although the first half of this year has been positive for dairy exports including casein, it’s probable that the impacts of Covid-19 have not yet materialised and by and large, there remains ambiguity surrounding dairy markets and demand for the second half of the year.
Our industry’s agility to navigate what has been a very challenging year for dairy ingredients has manifested in robust export value and volume statistics for the first five months of this year.
Solid, knowledge-based relationships between our dairy exporters and global customers will remain key differentiators for Irish dairy ingredients into the future.
– Seamus Greene, managing director, Ornua ingredients, Ireland.
Ornua is a dairy co-operative which markets and sells dairy products on behalf of its members, Ireland’s dairy processors and, in turn, Irish dairy farmers. It has been building sustainable routes to global markets for Irish dairy for over 60 years, exporting to 110 countries worldwide. For over 30 years, the business has been developing customer relationships and successfully building strong routes to market for Irish protein powders in Mexico.
As the world’s 12th largest economy, Mexico has a population of over 130 million with per-annum population growth of, on average, 1.8% in the past five years. As a dairy deficit region, it can only produce two-thirds of its dairy needs and with population growth and demand for dairy expected to continue to exceed growth in milk production, it will continue to rely heavily on imports.
Ornua currently operates a 26% market share with aspirations to grow that significantly in future years
Mexico is the second-largest importer of casein in the world with overall import volumes increasing by around 40% in the last six years alone. Ninety per cent of these imports come from Ireland and New Zealand. Today, casein has a market value of US$100m to $120m annually. Ornua currently operates a 26% market share with aspirations to grow that significantly in future years.
The popularity of Irish exports is attributed to the quality of grass-fed Irish dairy coupled with Ornua’s local sales infrastructure and the strength of key customer relationships spanning decades. The consistent quality of grass-fed Irish dairy products lends itself to bespoke recipe formulation of end use products such as Oaxaca cheese, a popular cheese commonly found on tacos. This, coupled with guaranteed supply, makes Ornua a preferred and trusted partner.
The market is not without its challenges. Customer sentiment is affected by macro-economic conditions including currency volatility, political uncertainty, and high unemployment rates of 3.8% (pre-COVID-19). Pre-COVID average household income stood at around US$2,529 per quarter. Business security, market risk, lengthy credit terms and ambiguity surrounding food safety laws result in a difficult trading environment. Ornua’s long-standing relationships in-market enable the business to trade effectively in the region.
Ornua is a strong position to exploit this reduction in tariffs to strengthen our route to market for Irish dairy in Mexico in the coming years
Notwithstanding the challenges, more recent trading developments have opened up additional opportunities in Mexico. The EU-Mexico Free Trade Agreement due to be ratified by the European Parliament and Mexican Senate expected in 2021 will enable Ornua to expand its offering into products like skim milk powder, cheese and butter. Ornua is a strong position to exploit this reduction in tariffs to strengthen our route to market for Irish dairy in Mexico in the coming years.