World Dairy Summit Presentation


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  • World Dairy Summit Presentation

    1. 1. Extended Shelf Life (ESL) Technology – Global Progress Since 2000 IDF World Dairy Summit: Partnering – The Future Of The World Dairy Industry Vancouver, Canada, Sept. 17– 22, 2005 Downloaded from public domain Gail Barnes PhD MBL, Business Development North America Tetra Pak Carton Chilled Inc. [email_address]
    2. 2. Definition Of ESL Technology <ul><li>Ability to extend the shelf life of a chilled distributed </li></ul><ul><li>product beyond the shelf life of the traditional pasteurized </li></ul><ul><li>equivalent in a specific market </li></ul>
    3. 3. ESL vs. Pasteurized And UHT Pasteurized ESL Chilled distribution UHT Ambient distribution Days Weeks Months
    4. 4. ESL - The Driving Factors <ul><li>Wider distribution </li></ul><ul><li>Improved safety </li></ul><ul><li>Improved product quality </li></ul>
    5. 5. ESL Applications <ul><li>White milk </li></ul><ul><li>Flavoured milk </li></ul><ul><li>Enriched/fortified milk </li></ul><ul><li>Fermented milk </li></ul><ul><li>Cream </li></ul><ul><li>Dairy desserts </li></ul><ul><li>Soy beverages </li></ul><ul><li>Juices </li></ul>
    6. 6. Purpose Of ESL Technology
    7. 7. Defining The Value Chain <ul><li>Quality and shelf life is determined throughout the chain </li></ul>
    8. 8. Add Shelf Life Or Quality Buffer? <ul><li>ESL – The Flexibility To Choose! </li></ul>
    9. 9. ESL, Only As Strong As… … the weakest link in the chain
    10. 10. The Need To Pay Attention To The Whole Chain ESL – Needs a system approach The weakest link will determine the quality / shelf life Processing Filling Packaging Distribution Retailer Pasteurized – One can get away with a component approach Processing Filling Packaging Distribution Customer
    11. 11. Holistic Line Thinking Raw milk quality Processing Filling Storage Packaging Distribution
    12. 12. ESL Processing Solutions
    13. 13. Pasteurization And Bactofugation
    14. 14. Pasteurization And Microfiltration
    15. 15. High Heat Treatment
    16. 16. Hygiene Features Of An ESL Filler <ul><li>HEPA air overpressure in hygiene chamber </li></ul><ul><li>Spray of a 1% H 2 O 2 solution </li></ul><ul><li>High energy UV-light gives log 3 killing effect </li></ul><ul><li>Log 4 killing effect when adding peroxide </li></ul><ul><li>Peroxide residue eliminated with hot air </li></ul>HEPA AIR PACKAGE SEALING H 2 O 2 UV HOT AIR PRODUCT Sequence in Hygienic Chamber
    17. 17. Example Of An ESL Package <ul><li>Appropriate for premium organic milks products, soy, probiotics and juice </li></ul><ul><li>Oxygen barrier material with an extra layer of EVOH to protect product integrity </li></ul><ul><li>Prevents oxidation that causes breakdown of nutritional elements </li></ul><ul><li>Preserves vitamin content </li></ul>LDPE Bleached Paperboard + Printing ink LDPE LDPE Barrier film (EVOH) HDPE
    18. 18. Overview Of ESL in Europe And South Africa <ul><li>Europe - ESL is well known in the industry – bactofugation, high heat treatment and microfiltration are processing technologies used </li></ul><ul><li>South Africa – ESL is a new concept - bactofugation has just been introduced by a major dairy group </li></ul><ul><li>The benefit for customers is longer shelf life, required because of </li></ul><ul><ul><li>Quality, hygiene issues </li></ul></ul><ul><ul><li>Production logistics </li></ul></ul><ul><ul><li>Long distribution distances </li></ul></ul><ul><ul><li>High margin / small volume products </li></ul></ul><ul><ul><li>Marketing positioning of improved taste (as a result of microfitration) </li></ul></ul><ul><li>Shelf life ranges from 11 days (e.g. South Africa) to14 (e.g. Italy) to 28 days (e.g. UK) </li></ul>
    19. 19. ESL Milk in Europe In 2005 Million liters ESL Milk Source: Tetra Pak Estimates
    20. 20. Germany ESL Overview <ul><li>Major ESL processing technology is high heat treatment </li></ul><ul><li>Number of ESL brands now 10 (up from 6 in 2004) </li></ul><ul><li>The ESL market is increasing in volume – growth of 41% in 2005 </li></ul><ul><li>15% of the pasteurized milk market is now ESL </li></ul><ul><li>5% of the total milk market is now ESL </li></ul><ul><li>ESL technology allows </li></ul><ul><ul><li>Fewer and longer production runs </li></ul></ul><ul><ul><li>Lower spoilage and returns </li></ul></ul><ul><ul><li>Increased distribution area </li></ul></ul><ul><ul><li>Access to new channels </li></ul></ul>
    21. 21. Germany – ESL Sales Increase 2003 - 2005 Sales in Mio. Liter / rolling 4 weeks Source: AC Nielsen
    22. 22. Germany - ESL Share Of Past. Milk Now 15% Market share in Past. Milk ESL Milk Past. Milk Source: AC Nielsen
    23. 23. Germany - Top ESL Milk Brands 2004 124,3 Mio. Liter 2005 175,7 Mio. Liter Market Share in % and Price in €/L Ø- Price € /L Ø- Price € /L (Meierei Trittau) (Domspitzmilch) (Starmilch / Hochwald) (Hansa Milch) (Berchtes. Land) 0,94 0,76 0,67 0,76 0,72 0,94 0,76 0,75 0,69 0,79 0,73 0,72 0,79 0,80 0,78 Private labels: 11,9 % 0,65 (MW Mainfranken) (Campina) Wtd Distr. in % 32 7 7 12 4 Wtd Distr. in % 32 12 7 7 19 6 4 4 2 2 Source: AC Nielsen
    24. 24. Germany - Bärenmarke – The Premium ESL Milk <ul><li>Branded 3.8% and 1.8% fat white milk launched 2001 </li></ul><ul><li>Became Nr. 1 ESL milk brand in Germany in 2002 </li></ul><ul><li>Remains ESL market leader with a 27.3% market share </li></ul><ul><li>Cream and drinking yogurt launched 2003 </li></ul><ul><li>23 days pre-dating </li></ul>
    25. 25. Germany - Increased Shelf Life Allows Larger Distribution Area <ul><li>Hansa-Milch “Maxi Frische” ESL milk has 25 days pre-dating </li></ul><ul><li>ESL technology allows </li></ul><ul><ul><li>Fewer and longer production runs </li></ul></ul><ul><ul><li>Lower spoilage and returns </li></ul></ul><ul><ul><li>50% increased distribution area </li></ul></ul><ul><ul><li>Access to new channels </li></ul></ul>Niedersachse Schleswig-Holstein Brandenburg Nordrhein-Westfale Rheinland-Pfalz Hessen Baden-Württemberg Bayern Sachsen Thüringen Sachsen-Anhalt Wiesbaden Mainz Köln Bonn Dusseldorf Saarbrucken Freiburg Stuttgart Nürnberg Augsburg Regensburg München Suhl Erfurt Dresden Leipzig Potsdam Hallé Magdeburg Schwerin Rostock Hamburg Kiel Bremerhaven Bremen Emden Hannover Frankfurt Berlin Pforzheim Darmstadt Ludwigshafen Heidelberg Wolfsburg Essen Dortmünd Münster Salzgitter Braunschweig Kassel Lübeck Dessau Zwickau Duisburg Herne Recklinghausen Oberhausen Trier Mannheim Karlsruhe Heilbronn Gera Osnabrück Wilhelmshaven Oldenburg Mülheim Hagen Bottrop Mönchen-Gladbach Rheydt Gelsen- kirchen Bielefeld Neuss Solingen Remscheid Wuppertal Chemnitz
    26. 26. Italy ESL Overview <ul><li>ESL processing technologies used include both high heat treatment and microfiltration </li></ul><ul><li>” Fresh” cannot be applied to microfiltered products or be used as part of brand names and/or product names; It may only be used in the case of pasteurized and special quality milks and for a maximum duration of seven days </li></ul><ul><li>Gives producers and consumers more convenience, time saving and of course taste </li></ul><ul><li>ESL is 5 % of the chilled milk market </li></ul>
    27. 27. Italy – Example Of A Microfiltered Milk <ul><li>Coop “Latte Coop” </li></ul><ul><ul><li>Launched in 2004 </li></ul></ul><ul><ul><li>Branded whole and semi-skimmed milk </li></ul></ul><ul><ul><li>Pasteurization with microfiltration (75 º C / 16 sec.) </li></ul></ul><ul><ul><li>Tetra Top Carton bottle 1000ml </li></ul></ul><ul><ul><li>14 days pre-dating </li></ul></ul>
    28. 28. Austria ESL Overview <ul><li>High heat treatment is the processing technology of choice </li></ul><ul><li>Pricing is in comparison to pasteurized milk </li></ul><ul><li>Shelf life from 14 – 21 days </li></ul><ul><li>ESL share growing, currently 4% of pasteurized milk market </li></ul><ul><li>OM, “Obersteirische Molkerei” Friche Voll Milch leads the market </li></ul><ul><ul><li>Relaunced in a new package in 2003 </li></ul></ul><ul><ul><li>Premium status </li></ul></ul><ul><ul><li>9% rise in brand volume after change </li></ul></ul><ul><ul><li>21 days date coding </li></ul></ul>
    29. 29. South Africa – ESL Overview <ul><li>ESL technology new to market </li></ul><ul><li>Clover Dairies launched first ESL milk using bactofugation technology in 2005 </li></ul><ul><ul><li>&quot;SealFresh&quot; pack available in 5 different sizes and variants: 1L / 500ml Full Cream & 2% Low Fat and 250ml Full Cream </li></ul></ul><ul><ul><li>“ Improved process and packing keeps the milk fresh for 50% longer while still providing the same great taste” </li></ul></ul>
    30. 30. United Kingdom ESL Overview <ul><li>ESL processing technology mainly bactofugation and microfiltration </li></ul><ul><li>Microfiltered milk is 3% of total market – expanded demand expected / new producers entering market </li></ul><ul><li>Consumers perceive that filtered milk tastes good, fresh and pure </li></ul><ul><li>28 days pre-dating </li></ul>Source: AC Nielsen
    31. 31. UK - World’s First Flavored Microfiltered Milk <ul><li>FlexDos technology from Tetra Pak Arom Pak allows addition of flavors to microfiltered milk </li></ul><ul><li>Allows range extension to “Hint of wild strawberry” and “Hint of vanilla” </li></ul>
    32. 32. North American ESL Overview <ul><li>Major growth drivers </li></ul><ul><ul><li>United States – ESL being driven by growth in soy and organic milks </li></ul></ul><ul><ul><ul><li>High heat treatment (ultrapasteurization) is the major processing technology used </li></ul></ul></ul><ul><ul><li>Canada – ESL driven by growth in microfiltered milk and value added products (e.g. flavored milk and creams) </li></ul></ul><ul><ul><ul><li>High heat treatment (ultrapasteurization) is the major processing technology used for value added products </li></ul></ul></ul><ul><ul><li>Mexico – ESL driven by growth in value added products </li></ul></ul><ul><ul><ul><li>High heat treatment is the major processing technology used </li></ul></ul></ul><ul><li>Pre-dating from 60 – 90 days </li></ul>
    33. 33. USA – ESL Growing As A Result Of Soy And Organic Milk USA – ESL Sales To 2005 Sales Dollars (000’s ) Average 20% Annual Growth – ESL 15% of market Source: Tetra Pak
    34. 34. USA – Reduced Waste / Costs As A Result Of ESL <ul><li>After consolidation Dairy X producing in one dairy instead of five </li></ul><ul><li>With ESL running every 2 weeks vs every week </li></ul><ul><li>Waste has been reduced by more than 90% </li></ul><ul><li>Returns reduced by 65% </li></ul><ul><li>Accrued savings go into reducing costs such as freight, to get from hub to spokes </li></ul>National Dairy Consolidation - USA
    35. 35. Canada – Microfiltered Milk Market Performance
    36. 36. Japan ESL Overview <ul><li>Major growth drivers </li></ul><ul><ul><li>Enhanced competitiveness </li></ul></ul><ul><ul><ul><li>Brand / Product image </li></ul></ul></ul><ul><ul><ul><li>Effective tool to negotiate with retailers </li></ul></ul></ul><ul><ul><li>Lowered percentage of defect ratio </li></ul></ul><ul><ul><ul><li>Minimized complaints from market </li></ul></ul></ul><ul><ul><ul><li>Allows delivery of high quality product </li></ul></ul></ul><ul><li>ESL products dominate with more than 60% of the market </li></ul><ul><li>High heat treatment is the processing technology mostly used </li></ul><ul><li>Additional shelf life not usually included in pre-dating </li></ul>
    37. 37. Japan - ESL Dominates White And Flavored Milk
    38. 38. Key Success Factors For ESL Mind the gap! Systems approach Holistic line thinking
    39. 39. Thank You!