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

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

The Covid-19 pandemic has significantly hit the nutritional progress of most of the countries across the world. The persistence of the Covid-19 for a longer period has adversely affected the most vulnerable groups of population including adults aged more than 60 years, mothers and children. Globally, countries are expecting drastic decline in dietary quality in low- and middle-income countries as a result of loss of income, shutdown of businesses, human and goods movement restrictions imposed by governments, de-globalization and breakdown of food markets due to both demand shocks and supply constraints. Increasing awareness regarding protein intake and benefits of the protein to build immunity during pandemic has resulted into change in the consumer’s behaviour. People are more attracted towards healthy and balanced diet.

INCREASE IN AWARENESS ABOUT PROTEIN INTAKE DURING COVID-19 BOOSTED THE DEMAND FOR DAIRY PROTEIN

Protein is an essential dietary component and sufficient intake of protein plays crucial role in maintaining healthy and balanced diet. During pandemic, consumers are increasingly aware of about the benefits of protein in the regular diet. They recognize the important role of it in managing hunger, sustain energy of the body, to maximize the performance and to improve immunity. Dairy is considered as an important source for versatile, high-quality and multifunctional protein. Thus, nowadays food and beverage manufacturers are also trying to incorporate dairy protein in their food products. Moreover, to the excellent source of nutrition, milk protein also has wide range of functional benefits while manufacturing the finished products as these proteins can sustain through the variety of procedures through characteristics properties such as heat stability, solubility, foaming and emulsification.

Increase in the intake of casein and whey protein to improve immunity during the pandemic has resulted into surge in the demand for whey protein and casein. Thus, manufactures from protein industry has opted for introduction of new products in the market to attract the consumers.  

For instance,

In September 2020, MuscleBlaze launched Ashwagandha enriched Biozyme immunity whey protein in the Indian market.  The product launch is done in response with change in the consumer behaviour amid COVID-19 pandemic.

For instance,

In October 2020, HalthXP launched Shield whey immunity boosting protein in response to the COVID-19 pandemic. Growing demand for immunity boosting products during pandemic highlighted the reason behind product launch.

SLOWDOWN IN THE PRICES OF THE DAIRY PRODUCTS AFTER OUTBREAK OF COVID-19

Every industry in the world affected by the COVID-19 outbreak and the food industry is no different from other industries. In the dairy industry, the COVID-19 has led to a gradual slowdown in trade, due to implementation of the restrictions on the transport, favoring the generation of surpluses and the reduction of prices in the pandemic period particularly in the in the northern hemisphere, Europe and the United States. In these domestic markets, after the outbreak of the COVID-19 the wholesale prices of the cheese have started to fall, due to gradual decline in the purchase of the product. Additionally, the areas where production of the dairy products is on huge scale namely Lombardy, Veneto and Emilia-Romagna were suffered from price decline for Grana cheese which is one of the most famous Italian cheeses across the globe. This cheese showed a sharp slowdown of -10% in Grana cheese and 20% Parmigiano Reggiano in February-April quarter of 2020. With the onset of Coronavirus, the situation was for fresh cheeses and fresh milk is quite critical, as short shelf life products are difficult to reconcile with logistical and distribution. In some cases, the difficulties in processing such as collection of milk from the contributing farms due to the absence of labor, also causing the collapse of the spot market prices of the products whose availability is growing strongly.

For instance,

Farmers in the Maharashtra hold protest against 40% fall in the prices of milk after COVID-19 outbreak.

According to the U.S. Bureau of Labor Statistics, Dairy products were strongly influenced by the outbreak of the COVID-19. During the pandemic, the PPI for dairy products fell 2.7% between February and June 2020, major factors that attributed to decline in the PPI includes school closures, stay-at-home orders which reduced dairy demand from restaurants, school lunch programs and fear of COVID infection among the consumers. Dairy producers were unable to quickly reorient their production facilities for packaging of the products. As demand for raw milk by dairy product manufacturers were low, some dairy farmers could not even able to find a market for their product, seeing no other option but to dump their perishable products rather than to ship it for further processing procedures. During this period, the PPI for raw milk fell about 40 % from February and June 2020.

Table- Consumer Price Indexes

Table- Producer Price Indexes

Thus, drastic fell down in the prices of the raw milk and milk products have seen during the pandemic period. In turn the global dairy milk, market also suffered from negative impact of the COVID-19.

DISRUPTION OF THE SUPPLY CHAIN AND REDUCTION IN THE EXPORT ACTIVITIES

Disruption of supply chain is the major reason that has been raised in the food industry during the COVID-19 outbreak. These days people tend to have follow a healthy diet for protecting themselves from infection of COVID-19 by making their immune systems stronger. Hence, the demand for the functional food such as dairy products which contain bioactive ingredients is on rise. During these pandemic foods safety has gained more attention in order to prevent the transmission of COVID-19 among producers, retailers as well as in consumers. Furthermore, food sustainability problems have arisen because of the people on lockdown restrictions in most of the countries, though there were no restrictions on the essential commodities, perishable food supply suffered more due to lack of labors and disrupted supply chain.

The supplies of all the dairy products have been hit hardest during COVID-19 pandemic. Dairy farmers are about to dump milk and associated products after drastic decline in supply of milk and closure of milk processing companies across the globe.

For instance,

According to journal of biology and today’s world, In America, it is estimated that farmers across the nation are dumping around four million gallons of milk each day. In Nepal, Dairy products of around NPR 2 billion have been destroyed and stock of worth NPR 5 billion of dairy products seems on the verge of deterioration.

Table- U.S. commercial Export of dairy products (Oct-19- Nov-20)

Table- U.S. Annual commercial disappearance of dry whey, 1995-current (millions of pounds)                                                                     

From the above table it is concluded that the total production, total supply and Commercial export of the Dry whey is decreased for the year 2018-19 due to restriction imposed by the government to prevent the spread of Coronavirus.

GLOBAL IMMUNE HEALTH SUPPLEMENTS MANUFACTURERS: PERSPECTIVE & INITIATIVES

"Farmers were getting Rs 30-35/litre for cow's milk before lockdown. Now, after the unlocking, the situation is more or less back to normal and yet farmers are getting only Rs 17/litre,"

                      -  Dr Ajit Navale,general secretary, All India Kisan Sabha (Maharashtra)

CONCLUSION

The current COVID-19 crisis has changed the global food market drastically; food trade policies of some governments, restriction imposed by the government on supply chain and change in the consumer behaviour due to awareness regarding protein intake and balanced diet are fuelling the growth of the global dairy protein market.  

Additionally, dairy protein faces string competition from plant proteins, significant increase in new product introductions with plant proteins and decrease in introductions with dairy proteins during past few years also showing impact on the global dairy protein market.  On the other hand, new research studies regarding whey proteins and health benefits associated with it and sustainability are likely to boost the growth of global dairy protein market.