Irish dairy exporters look east

Margaret Butler, dairy ingredients manager at Bord Bia, outlines the opportunities for Irish dairy exporters in Southeast Asia – a high potential growth region for Irish dairy exports.

Spanning five dates across November (18 and 24-26) and December (1-3), the Department of Agriculture and Bord Bia will host a Virtual Dairy Trade Mission to the strategically important region of Southeast Asia, focusing on Malaysia, Indonesia, Philippines, Thailand and Vietnam.

This dairy-focused trade mission will see 13 of Ireland’s processors and exporters engage in business-to-business meetings with up to 250 local ingredients buyers and distributors allowing them to market their products and capabilities to a commercial dairy audience.

Minister for Agriculture, Food and the Marine, Charlie McConalogue T.D, Minister of State Martin Heydon T.D and Bord Bia CEO Tara McCarthy will address audiences in each market positively positioning Ireland’s grass-based dairy system and family farm structure, and the stringent food production standards and innovative capabilities of Irish dairy processors.

In excess of 1,300 dairy buyers and distributors have been contacted to participate in these events, which is hosted live via a digital platform, B2match, enabling Bord Bia’s dairy client companies to promote their capabilities to a commercial dairy audience, pre-screened by Bord Bia for their buying potential.

These business-to-business (B2B) seminars are part of wider virtual trade mission activity that includes engagement between ministers, Bord Bia and key global customers in the United Arab Emirates, Japan, China, Philippines and the US over two days on November 9 and 10.

Key export products

The Southeast Asia region is of strategic importance to Bord Bia’s dairy client companies, importing up to 2.6 million metric tonnes of dairy ingredients from global markets in 2019.

Collectively, these five markets have doubled their imports of Irish dairy products in volume terms between 2015 and 2019. Exports in 2019 were worth close to €164 million.

Dairy powders such as skim and fat filled milk powders, buttermilk powder and infant food are key drivers contributing to the growth of Irish exports to this region where buyers are keen to procure high-quality functional food and dairy products.

What is functional food?

Functional foods are those which satisfy a particular need or demand by virtue of their composition and characteristics, be that protein, fat, mineral and vitamin content, viscosity, solubility, flavor profile and so on.

Nutrients in milk and its derivatives provide an abundance of health-promoting properties and these products can be enriched further with the addition of micro and macro nutrients to extend their functionality.

Functional foods can also be solution-orientated with product specifications and formats designed to give optimum results for the application in which the product will be utilised. For example, cheese can be formulated to the desired ‘cheese stretch’, browning point and mouth-feel for pizzas.

Irish dairy processors have invested in developing new specifications and in research and development to understand the needs of the Southeast Asian consumers around functional foods.

January to September exports

Irish dairy exports to the quintet of trade mission markets totaled approximately 48,000t for the first nine months of the year with an associated value of €113 million – a robust performance despite the many headwinds faced by dairy exporters in 2020.

Malaysia, which was the focus (along with Indonesia) of a 2018 Trade Mission, is the largest market of the five with exports for the year to date of over 18,000t valued at €36.7 million.

The Philippines is the second largest market in the region with exports of 7,950t valued at €21.4 million so far this year.

This is up 16% in value and 6% in volume on last year and includes a 181% increase in the value of casein exports from €1.3 million to €3.7 million. Skim milk powder exports have also increased significantly, on the same period last year, from 2,193t to 3,668t.

Dairy exports to Thailand have grown by 26% in volume to 8,935t, valued at €22.7 million for first nine months of the year. This is primarily a full fat milk powder market (6,781t) supported by skim milk powder (769t) and buttermilk powder exports (974t).

Exports to Indonesia, a country with a population of over 267 million, are up by 8% in volume to 9,787t valued at €17.1 million this year, consisting mainly of whey, skim milk powder and full fat milk powder.

In Vietnam, exports are down 42% in volume to 2,891t so far this year, valued at €15 million, (a 36% fall in value) caused by a sharp fall in skim milk powder exports.

Future growth

While primarily a market for powders, there are opportunities for growth in a wider range of product categories including opportunities in foodservice (restaurants, catering etc.) in the Southeast Asian region.

Bord Bia research to be conducted in early 2021 will better inform our understanding of the region while the recently recruited dairy market specialist, based in Singapore, expands the Bord Bia presence in the region and provides additional market support for Irish dairy exporters.

For more information on the Irish dairy Trade Mission, just click here