< Previous20 Food & Drink International www.fdiforum.net DAIRY INDUSTRY Report after report exploring the future of food has identified algae milk as the next plant-based milk to take over the mantle from the popular nut- based varieties that continue to be widespread on store shelves. Even the most conservative of these estimates predict that algae milk will enjoy market dominance as early as 2025 but, in many ways, the future is already here with alternative non-dairy milks having spent years moving away from the fringes of the market and into the mainstream. Today, even the discount supermarkets sport their own range of plant-based dairy products. Unsurprisingly, this shift has occurred alongside a changing taste among consumers, especially where millennials and Generation Z are concerned. In 2017, non-dairy milk was added to the Office for National Statistics inflation basket for the first time. Indeed, Mintel says that sales of plant- based milk here in the UK have grown by thirty per cent since 2015, while almost half of all shoppers in the United States regularly add a plant milk to their baskets. Globally, the industry is now worth an estimated $16 billion. Amid rising demand for alternative milks, there’s been an overall decline in demand for cow’s milk. Coupled with falling milk prices, this dip led to the closure of one thousand dairy farms in the UK between 2013 and 2016. In the US, liquid milk consumption has dropped eleven gallons per person since the seventies. Experts point out that the total volume of the alternative milk market is still relatively small – minuscule, it would seem, compared to the sheer volume of animal lactose produced – and not a major factor behind declining fluid prices. Be that as it may, it has served as a rude awakening for dairy companies who ignore the shift in shopping habits and consumer preferences at their peril. Dairy companies keen to move into the plant-based dairy market have done so either through new product development, an acquisition, The future of the dairy industry As well as facing stiff competition from plant- based alternatives, the dairy industry is also having to contend with new findings highlighting its environmental impact. To remain competitive and attractive amid changing tastes, the industry will have to adapt its supply chain and continue the premiumisation of dairy products. The future of the dairy industry 20-23.qxp_Layout 1 26/06/2020 12:35 Page 1Food & Drink International 21 www.fdiforum.net DAIRY INDUSTRY © Shutterstock /Davizro Photography participating in an investment round or a combination of all of the above. Although food and beverage companies must be cognizant of this market change, it’s not so simple as to say ‘adapt or die’. Indeed, many companies are doubling down on their traditional dairy efforts, hitting back at claims from vegan campaign groups. Traditional milk and dairy products are frequently sold with claims emphasising their health benefits, especially protein. Companies are also more frequently fortifying dairy products, especially beverages which can be enjoyed on- the-go and, therefore, are aligned with busy and active consumers looking for a healthy, nourishing and filling drink. Added protein might be one example, but more common on supermarket shelves of late are dairy products enriched with vitamin D. Last year, for example, Coca-Cola launched a new dairy beverage in Australia boosted with protein, calcium, fibre and vitamin D, citing an evolving dairy industry. Then there’s the rise in speciality dairy products such as kefir, tapping the growing trend for gut health and probiotics and the interest in fermented products. This cultured, fermented milk drink dates back almost two thousand years in the Caucasus Mountains of Russia and is packed with live cultures and loaded with calcium. Once a niche product in the US and UK, it has become readily available on supermarket shelves as small-scale suppliers secure listings and big players muscle in on a market that’s tipped to reach $2.42 billion by 2024. It’s all part of the wider premiumisation trend taking place in the dairy industry – think organic and grass-fed, even raw and unpasteurised, milks. As well as offering consumers more choice in the chiller aisle, these products command a higher price and can compete more directly with plant- based alternatives. With this in mind, it’s interesting to look at the biggest trends tipped for the dairy industry 22 Á 20-23.qxp_Layout 1 26/06/2020 12:36 Page 222 Food & Drink International www.fdiforum.net DAIRY INDUSTRY with its emphasis on digestive wellness, reducing sugars, experimenting with flavours and proteins, as well as upscaling the market share of niche products such as camel milk. All speak towards the diversification taking place in the traditional dairy sector as it competes for consumer interest. This does, however, result in several challenges for producers. “Manging diversified product lines adds logistical challenges to an industry accustomed to a commodity product structure,” a report from CoBank said. “For example, adding a grass-fed option to an organic milk portfolio requires separate handling all the way from farm to milk to bottling and onto retail shelves.” It also results in an increase in marketing costs and slotting fees. More and more supermarkets are increasing slotting fees for plant-based beverages as more enter the dairy case. They’ll likely follow suit with premium cow’s milk products as more new launches enter the market and competition for shelf space continues. Logistical and supply chain efficiencies can be made up elsewhere, with many companies augmenting their production and processes with new and emerging technologies. For example, French retailer Carrefour put a range of milk on blockchain, allowing consumers to use a QR code and discover information about where it was farmed, right up to the date it was placed on store shelves. Elsewhere Arla Foods is using artificial intelligence to predict milk intake, resulting in a leaner, more sustainable supply chain. However, one of the biggest challenges facing the dairy sector is environmental. According to a new report, the biggest dairy companies in the world have the same combined greenhouse gas emissions as the UK. The Institute for Agriculture and Trade Policy (IATP) report shows that the impact of the thirteen farms on the current climate crisis is growing with an eleven per cent increase in emissions in the two years after the 2015 Paris climate change agreement. This increase, it said, is largely due to consolidation in the sector. The researchers point to caps on production as a means of protecting the 20-23.qxp_Layout 1 26/06/2020 12:36 Page 3Food & Drink International 23 www.fdiforum.net DAIRY INDUSTRY climate and small farmers. The report found that the growth of giant dairy companies has driven – at least in part – milk prices below the cost of production for the last ten years. However, in a joint statement the President of the International Dairy Federation and the Executive Director of the Global Dairy Platform, said: “The dairy sector is committed to producing nutritious foods in environmentally sound and responsible ways. It’s very easy to put out a report that criticises and tries to paint a simple picture of a sector which doesn’t contain all of the nuances or realities of how the global dairy sector nourishes the world with nutrient- rich, safe foods and does so in a manner that strives for continued environmental improvements while providing livelihoods to a large percentage of the world’s population.” Be that as it may, there’s no denying that the dairy industry needs to help create a greener, more sustainable supply chain both for the planet but also to remain competitive with the alternative dairy industry and to continue to appeal to younger consumers. They are, after all, the future. © Shutterstock /Y anawut Suntornkij © Shutterstock /279photo Studio 20-23.qxp_Layout 1 26/06/2020 12:36 Page 424 Food & Drink International www.fdiforum.net COLD STORAGE Food and drink products must be stored and transported at precise temperatures to maintain quality and food safety. To achieve this, cold storage and refrigerated transport are vital, preventing spoilage and waste, extending product lifespan and freshness. A spoiled delivery due to inadequate refrigeration can quickly repel customers from a brand, ruining a reputation. The demand for cold storage within the food and drink industry has skyrocketed. A number of factors have contributed to this growth, from changing consumer habits craving fresh food and seafood - which have risen imports and exports between countries - to expanding supply chains, escalating concern over food waste, and a general increase in the amount of goods that are cold-stored. Over the past few months, COVID-19 has placed extra strain on cold storage, with the pandemic pushing consumers to buy frozen goods and take part in more online food shopping - which was already on the rise and impacting the cold chain - and creating backlogs of products due to border/export/port complications. Further, with many restaurants across the globe closed, the pandemic has left suppliers scouring for alternative customers and locations to store excess food, while some food processors, running out of storage, are being forced to cut output. Quite simply, the food industry desperately needs more cold storage. The complexity associated with constructing cold facilities, however, stands in the way of development, with limited contractors able to build these properly. With this there is a growing risk of a shortage of space for temperature sensitive goods. A report from CBRE highlights that in the US alone up to 100 million square foot of additional cold storage capacity will be needed to keep up with the acceleration of online grocery shopping over the next five years. A key barrier for many looking to expand their storage offering, whether a developer, third-party provider or food company, is the Cold storage heats up With increasing interest in fresh and frozen goods, demand for cold storage is soaring. Meanwhile facilities are being upgraded with deeper automation and IoT technology. 24-27.qxp_Layout 1 26/06/2020 12:39 Page 1Food & Drink International 25 www.fdiforum.net COLD STORAGE expense of constructing cold facilities, which can be as much as triple of that of traditional warehouses, and the time taken to do so, which far surpasses that of traditional warehouses, with insulated panelling, a thermal envelope, refrigeration, mechanical and rooftop equipment, higher ceilings, subfloor heating, various temperature zones, temperature-controlled docks et al. required. Moreover, for efficient cooling, cold storage must be designed to reduce air flow waste with insulation, temperature and air proof doors and temperature monitoring. Alongside the strong appetite for cold space generally, there is also an increasing call for localised refrigerated fulfilment centres closer to pockets of demand to facilitate fast and efficient delivery to consumers. While cold storage has been slow to embrace innovation, change has arrived in the sector. A plethora of technologies have been implemented to improve cold chain and storage management. Automation and, though not fully integrated like in traditional warehouses, robotics are on the rise, replacing manual workers and processes to speed up the movement of food to efficiently fulfil orders. This is prompting taller, high density and smaller footprint builds capable of 24/7 operation. © Shutterstock /Sorn340 Studio Images 26 Á 24-27.qxp_Layout 1 26/06/2020 12:39 Page 226 Food & Drink International www.fdiforum.net COLD STORAGE Building upwards rather than out is fitting as facilities are further established in urban areas, with robotic stacker cranes accessing high shelves, and with less square footage and less land needed, savings can be made in property costs for what are already expensive facilities to create. In addition, with a smaller footprint comes a smaller roof area, allowing real gains in energy conservation, with heat from roofing reduced, making a building easier to keep cool. Automation is also being employed to decrease labour costs and make up for a staff shortage, with just a small talent pool willing to work in the extreme conditions associated with cold storage. Some facilities are keeping this to a smaller scale with semi-automated systems like automated truck loading systems, while others are implementing fuller automation with receiving, picking and retrieving systems (like AS/RS), minimising human contact with goods as far as possible. AGVs such as automated lift trucks are also being utilised, though it should be noted that problems with condensation on sensors used to navigate has limited their use. A significant trend in cold storage is the use of Internet of Things (IoT) systems and cloud computing, which offer improved visibility and accountability for cold storage and shipping. IoT sensors in warehouses and refrigerated trucks facilitate real-time remote temperature monitoring, often when tracking other parameters too, transmitting data to cloud software platforms for use, and can provide automatic alerts if temperatures reach an unsafe level. With these real-time notifications when goods are no longer in ideal temperatures, one can uncover cooling system malfunctions, quickly work to correct problems to avoid product damage, and prevent the spoilage of a shipment. One could even reroute a shipment to preserve products. With automated 24/7 temperature monitoring and recording manual documentation is eliminated and on demand reporting can be accessed, as well as historical cold storage data, which is particularly useful for food safety compliance. In part this has come as a response to customers desiring temperature confirmation and regulation, for instance the FDA’s Food Safety Modernisation Act which pinpoints requirements for maintaining temperature. Shipments must be traceable and have verifiable temperature records. Further shifts in cold storage revolve around energy efficiency and environmental friendliness. The high levels of energy consumed in the cold chain for product storage, transport, and processing has a severe negative impact on the climate. Facilities are now being built with energy efficiency in mind, utilising LED lighting, more sophisticated insulation, lithium ion battery technology, variable speed drives, heat recovery to use waste heat for defrosting and underfloor heating, and new refrigeration systems - all to ultimately reduce power consumption. The drive for change here can be seen in the launch of the EU-funded ICCEE project, which looks to reduce energy consumption and greenhouse gas emissions from the European food cold storage sector through energy-efficient equipment choices that line up with policy. Meanwhile the refrigerants, hydrofluorocarbons, required to freeze goods present an impact on the climate that is greater than carbon dioxide. To address this there is growing interest in natural refrigerants that are better for the environment such as well- established ammonia and CO2 systems. Cold storage facilities continue to be optimised. In some cases this involves many of the innovative methods previously mentioned, but other ‘common sense’ practices are also key for cold storage optimisation. This includes proper maintenance of door Facilities are now being built with energy efficiency in mind, utilising LED lighting, more sophisticated insulation, lithium ion battery technology, variable speed drives, heat recovery to use waste heat for defrosting and underfloor heating 24-27.qxp_Layout 1 26/06/2020 12:39 Page 3Food & Drink International 27 www.fdiforum.net COLD STORAGE © Shutterstock /Lukas Gojda Ice, frost and fog in cold stores can create slippery, dangerous conditions for staff. While many accept that ice is simply part of the cold store, it doesn’t need to be so. Munters IceDry® is a specially designed dehumidifier that targets moisture in manufacturing facilities,cold stores and process freezers to: • Reduce & prevent ice, frost and fog build up on floors, walls and ceilings • Reduce defrosts - case studies available • Lower maintenance costs • Improve safety for staff & forklifts • Increase productivity • Improve evaporator efficiency 01480 432243 info@munters.co.uk munters.com/icedryseries Improve Safety & Climate Conditions in Cold Stores Free CPD Seminars Proven global installations “The cold store is the best it’s ever been for excessive ice & snow” - Kitchen Range Foods FREE site surveys seals, to avoid cooling systems having to work harder to keep temperature down as refrigerated air escapes (increasing running costs), using equipment modified or designed for the cold, for example with large buttons instead of touchscreens that would be impossible for workers to use with thick gloves, maintenance of refrigeration systems, keeping condenser units clean and avoiding overloading trucks to achieve consistent temperatures. With the need for food to be delivered fresh, safe and on time to customers and the growing range of, and demand for, temperature sensitive foods, pressure on cold storage and refrigerated transport will continue to mount, seeing new facilities, new technology, and more automation required to keep up with order fulfilment. 24-27.qxp_Layout 1 26/06/2020 12:39 Page 428 Food & Drink International www.fdiforum.net Q&A - CARTER COLDSTORE SYSTEMS Obviously, every business has been impacted by the coronavirus pandemic. What steps have you taken? As the situation developed, we moved quickly to ensure the safety of our staff and to ensure that wherever possible that they could work from home. Our IT department undertook a major exercise to support this significant change to our normal working practices. For the manufacturing element of our businesses we undertook the decision to shut down the key elements as necessary and staff were Furloughed under the government scheme. This was kept in place until the advice began to change and we returned a key skeleton staff to our premises with strict social distancing and restricted access measures in place. This included changing our office and factory layouts and putting in place new sign in and access restrictions. Throughout the pandemic, our refrigeration & building service divisions nationally have continued to operate at full capacity. Our customer base of over 4000 sites comprises supermarkets, mortuaries, hospitals, MOD sites, Pharmaceutical storage and distribution, Food processing, storage, and distribution to list a few. As most of our sites were considered key, the support for these sites needed to remain available 24/7. Our helpdesk operations were moved to a remote model with staff working from home. Carter Thermal Industries Group is a very environmentally- focused business as seen from your continued sponsorship of World Refrigeration Day. What sustainable engineering solutions can you provide? As a group we pride ourselves on our commitment to provide value lead, environmentally focused engineering solutions. In the products we manufacture such as our range of refrigerated display cabinets we constantly look to improve on our design and engineering. With the release of our latest integral refrigerated cabinet, we have improved the energy efficiency of the case by over 50% when compared to the previous model. The design has also reduced the refrigerant charge contained with the case. Carters were early adopters of the recent return to trans critical CO2 refrigeration systems and partnered with the highly regarded Swedish manufacturer, Green & Cool. Since the formation of this partnership we have delivered and installed over 300 systems into the UK marketplace. This partnership has led to Carters supporting the technical design of the systems to ensure their suitability in the market. With the continuing emphasis on low carbon technologies, Carters remains committed to supplying and designing systems with the most efficient and low risk refrigerant technology available. This is also clear from our adoption of hydrocarbon refrigerants in our manufactured integral display cabinet range. Q&A Justin Southwick, Sales & Operations Manager, Carter Coldstore Systems Food and Drink International spoke with Justin Southwick, Sales & Operations Manager at Carter Coldstore Systems, about how the business is responding to the coronavirus crisis, sustainability and the businesses’ made in Britain credentials. 28-29.qxp_Layout 1 26/06/2020 12:40 Page 1Food & Drink International 29 www.fdiforum.net Q&A - CARTER COLDSTORE SYSTEMS Can you tell us more about your unique group ability to provide an integrated package of solutions to clients across a range of sectors. The Carters group comprises several businesses which include: Carter Synergy & KB Refrigeration National provider of refrigeration, air conditioning & building service design, installation, commissioning as well as service and maintenance. Currently the business supports over 4000 sites across the United Kingdom including supermarkets & retailers, pharmaceutical processing and storage facilities, food packaging and distribution sites, mortuaries and many more. Carter Retail Equipment A renowned manufacturer of high- quality retail display cabinets for the supermarket industry in the United Kingdom and internationally. Carter Environmental Engineers A leading provider of water-cooling towers for any process cooling requirements on industrial plant. Franklin Hodge Industries Specialists in the design, manufacture, and installation of water storage solutions internationally. With many years’ experience in regions as diverse as the arid Omani desert, the tropics of South East Asia and the Typhoon prone coast of Southern China. Through a subsidiary, Bryce Baker the business also provides a wide range of grain storage and handling solutions. CPC (UK) CPC are specialists in the design, manufacture, and installation of refrigerant leak detection solutions across the globe. Additionally, CPC design and install refrigeration system energy efficiency and monitoring solutions. You are a proudly British business, but how do you continue to manufacture exclusively in the UK? Cost and overhead pressures including labor, materials and services have led to a number of significant changes to our business over the last 24 months. We have restructured and closed two of our historical manufacturing and office sites in Birmingham and relocated all operations to our Lea Ford Road factory. With further developments likely over the coming months and years due to the significant impact of both the COVID-19 pandemic and Brexit, we will continue to drive efficiencies & look to continue our historical manufacturing presence in the midlands. Despite the cost and market pressures, Carters remains committed to their manufacturing facilities in the United Kingdom. Just prior to the current COVID-19 situation our business was ranked in the Sunday Times, International Track 200 list of Britain’s private companies with the fastest growing international sales. Our group business has multiple international revenue streams including the design of our water tank range across Asia and the supply of our retail refrigeration system to the North American and Australian markets. To find out more, visit www.cre-ltd.co.uk, email info@cre-ltd.co.uk, or call +44 (0) 121 250 1000. 28-29.qxp_Layout 1 26/06/2020 12:40 Page 2Next >