COVID-19 Impact on Pharmaceutical Packaging in Chemicals and Materials Industry

COVID-19 Impact on Dairy Protein in the Food and Beverages Industry

  • Food & Beverage
  • Dec 21, 2021

The COVID-19 pandemic has affected the industrial and commercial progress of most of the countries across the globe. The persistence of the COVID-19 for a longer period has adversely affected the most vulnerable groups of the population including adults aged more than 60 years, mothers, and children. Globally, countries are expecting a drastic decline in dietary quality in low- and middle-income countries as a result of loss of income, the shutdown of businesses, human and goods movement restrictions imposed by the government, de-globalization, and breakdown of food markets due to both demand shocks and supply constraints. Healthcare facilities have been consistently giving their best to combat COVID-19 and helping resources to divert from nutritional care including micronutrient supplementation, prevention, and treatment of child malnutrition. In normal times, malnutrition remains a multidimensional problem and during the pandemic situation, it has taken a major hit. Thus, the global population will be more focused on building higher immunity levels during the post-crisis situation

Consequently, the COVID-19 pandemic has impacted the dairy protein industry by increasing the consumption of healthy protein foods and supplements owing to the health benefits associated with them. Quarantine or the extended lockdown has impacted considerably all over the world. However, the pandemic has been created an opportunity due to the growing demand for dairy protein products. This is mainly due to raised awareness regarding health and increased concern for maintaining immunity and thereby well-being of health.

Growing awareness of health and wellness, rising demand for healthy food, and increasing health awareness of life will add to the market demand for the global dairy protein market.

Impact On Demand

Whey protein and casein protein are among the most significant dairy protein products. The avoidance to buy food products from stores, supermarkets among others. has been decreased in this pandemic, as 90% of the global population is preferring home-based food rather than buying food products and taking precautions to avoid socialization and to stay away from COVID-19 virus. Dairy products such as yogurts, cheese, ice creams which are significant applications of dairy protein are kept frozen most often by adding preservatives to increase their shelf life, and due to misconception and fear that frozen or cold food products are more susceptible to COVID-19 virus. Thus the preference of consumers changed and consumers began to buy healthy & organic food products to build immunity and fight against the virus.

This outbreak hurt business in 2019. A decrease in demand and a decline in sales adversely affected the dairy protein market. Therefore, manufacturers are recovering from the impact by trying to fulfill consumers’ demands by giving them organic & high nutritional dairy products which have health benefits and improved and enhanced palatability.

Thus, the introduction of probiotic drinkables and new joint ventures with the global region is attracting consumers towards the dairy protein market as it satisfies their all needs, as it has taste, flavor, and nutritional content.

Impact on Supply Chain

COVID-19 is a transmissible disease originating in China with flu-like symptoms, including fever, and difficulty in breathing. Manufacturers of food and beverages depend on the sourcing of raw materials from domestic and international suppliers. As many governments have restricted the flow between countries and at the local level, manufacturers have had to halt production due to a lack of raw materials. In addition, restrictions on trade in products are due to fear of contamination from manufacturing facilities have contributed to the decline of the dairy protein market.

The outbreak is predicted to still hurt food businesses throughout 2019 and into 2021. However, it's expected that the food and the dairy manufacturing market will get over the shock across the forecast period as people globally and in the global region now know what precautions should be taken while buying any product and the government also helping manufacturers allowing them to manufacturer the food products by maintaining hygiene and by following all the principles of governments from raw materials to selling the products. Also, this pandemic situation recovering rapidly and has no relation to ongoing or fundamental weaknesses within the market or the economy.

To recover from the loss due to disruption companies are looking for new ideas such as acquisitions, mergers, among others. so that the COVID-19 and supply chain disruptions due to COVID-19 will not affect the companies individually and also the market.

For instance,

  • Associations and research centers such as Innovation Center for U.S. Dairy and dairy ingredient manufacturers are actively engaging in research & development activities to enhance the characteristics such as aroma, flavor, and nutritional performance of dairy protein ingredients.

Thus, global and local companies are fighting against COVID to rebuild the overall growth of the market, these acquisitions will help companies, as well as the market, grow rapidly even in the pandemic.

STRATEGIC DECISIONS BY THE KEY MANUFACTURERS

Some of the key strategic initiatives taken by the dairy protein manufacturers during the pandemic are listed below

For instance,

“Nestle said it was launching a 500 million Swiss France USD 512 million) programmer to help the cafes and restaurants it supplies by extending payment terms and suspending rental fees for coffee machines. It also agreed to maintain orders from its dairy suppliers who have faced "significant demand disruptions."

- Nestle

 “As a major food company, Arla Foods moved quickly to safeguard its people and operations to maintain continuity of supply to customers and meet increases in demand from retail and e-commerce customers in markets around the world. The Company’s crisis management plans have ensured that the supply of milk from Arla’s farmer-owners has been uninterrupted and all volumes received have been processed. The supply chain of Arla has implemented strict COVID-19 related measures to secure the safety of employees and uninterrupted production. With these measures, together with a huge commitment from the employees and strong internal cooperation, Arla Foods has continued production at full capacity with very few interruptions.”

            - Arla Foods

 “With job losses, food insecurity, and the need for additional supplies at food banks at an all-time high, we’re grateful for our family farmers, employees, industry partners, and friends in the community for all they are doing amid this pandemic to get dairy from the farm to the tables of those in need,”

            - Monica Massey, DFA executive vice president and chief of staff, Dairy Farmers of America 

Dutch multinational dairy cooperative FrieslandCampina has announced that it is taking all the safety and precautionary measures to slow down the spread of Coronavirus. The company’s CEO further stated:

“I would like to briefly set out how we are working on making sure that you as our customers and business connections can keep relying on us for your daily high-quality nutrition.”

            - Hein Schumacher CEO, FrieslandCampina

 “Cheesemaker Saputo Inc. is eyeing takeover opportunities amid the current market carnage as it works through a “massive shift” in demand away from restaurants and other foodservice customers to retailers such as supermarkets.”

The company also said: “Saputo factories serving retailers are “running hard,” in some cases at more than full capacity.”

  • Saputo, Canada’s biggest milk processor

Additionally, collaborations and partnerships have also been adopted by several companies to address the global as well as local demands for dairy protein. Such partnerships could additionally cover the losses brought into the global dairy protein market by the pandemic.

Conclusion

COVID-19 pandemic has taken a toll on the global population and economy. A collaborative effort on government, public health departments, and hospital fraternity to fight the coronavirus have led to the economic slowdown, global lockdown, and extreme public safety measures. The public health measures include creating wellbeing measures about home isolation measures, maintaining food and medical care supply, particularly to poor people are by and large carefully followed by governments across the globe.

During this pandemic situation, public awareness about maintaining high immunity levels has become a serious concern. Many researchers and dairy manufacturers are urging governments to build awareness about the consumption of dairy protein products. Also, they are providing varieties in the dairy protein products to enhance its taste & increase the growth of the business. This is significantly affecting the global dairy protein market. Food authorities and government bodies such as FDA and the global government are taking initiatives to cope up with the pandemic. Thus, the global dairy protein market will mark a sudden surge during the COVID-19 pandemic and is projected to significantly grow over a long period due to permanent changes in consumer buying behavior.