Solae Helps Food Manufacturers Cope with High Dairy Prices

08/10/07 With prices for dairy ingredients doubling in the past year and no indication of relief in sight, Solae's portfolio of dairy protein alternatives offers food manufacturers the opportunity to save money while still producing high quality, healthy products.

"Rising dairy protein costs affect food manufacturers' in two ways: it lowers their short-term profitability and inhibits their ability to predict where their profitability might be down the road," said Will Black, Senior Director, Global Strategy at Solae. "Solae's soy proteins can relieve those economic pressures and deliver similar nutritional and functional benefits."

According to the Sept. 27 edition of Dairy Market News, prices for nonfat dry milk and whole milk powder have more than doubled since September 2006, and casein prices are 75 percent higher.

In the U.S. Department of Agriculture's July 2007 report, "Dairy: World Market and Trade," it states several factors have contributed to the current situation, including strong international demand for dairy ingredients, higher production costs and supply shortfalls in key milk-producing regions like Australia and Western Europe. The report concluded the fundamental factors that promoted escalation of dairy prices during this past year will continue to persist into 2008.

Soy protein is a high-quality protein, and there is no compromise in protein quality when substituting soy for dairy proteins. Depending on the application, formulators often can replace 20 to 100 percent of the dairy protein with soy protein. Economically, soy protein provides direct cost savings in the range of 20 to 60 percent versus commonly used dairy proteins based on today's pricing and offers stable pricing and supply availability advantages as well.

Recent advances in technology make the task of replacing dairy with soy protein even more achievable today. Many of Solae's proteins provide calcium-to-protein ratios equivalent to dairy proteins and target similar macronutrient compositions, providing ease of formulation advantages. Solae's application research has also discovered process and formulation approaches that can also ensure success with its solutions.

"We have worked closely with our customers for many years, helping them save formula costs by replacing dairy proteins with our soy proteins," Black said. "However, what is different today is that we have a broader portfolio of potential solutions -- both product and formulation approaches -- that we can tap into."

Solae offers soy protein-based alternatives to dairy proteins that are functional in many applications.

"Nutritional beverages, nutrition bars and bakery products are some of the more obvious applications, where we have proven solutions and a wealth of experience and expertise," Black noted. "However, dairy proteins are used as functional ingredients in a lot of other applications, including sauces, gravies, puddings, frozen desserts and more. All of these are viable cost-savings targets for our solutions."