Page 32 - Food & Drink Magazine Jan-Feb 21

Trends shaping dairy in 2021
After a difficult 2020, Australian Dairy Products Federation executive director Janine Waller looks at three trends most likely to shape the industry in 2021.
DAIRY BUSINESS
32 | Food&Drink business | January/February 2021 | www.foodanddrinkbusiness.com.au
2020 was an incredibly challenging year for Australian dairy processors. Through the COVID-19 pandemic, dairy processors were forced to contend with disruption to supply chains, the closures of usual distribution channels, panic buying clearing out supermarket shelves, border restrictions and closures, and ensuring COVID-safe operation of manufacturing facilities.
It’s not just COVID-19 that has challenged the sector. Factors such as increasing input costs combined with deflated retail prices and growing import competition have impacted dairy manufacturing margins, and in turn capital investment and investment in innovation.
Having said that, the resilience displayed by processors has been impressive and the future is looking bright. Last year we saw the introduction of two key initiatives that are restoring confidence in our industry and putting us back on the road
to profitability.
The first was the Dairy Code of Conduct, an industry code governed by the Australian Competition and Consumer Commission (ACCC) that aims to improve the transparency and trading arrangements between dairy farmers and processors.
The second was the launch of the Australian Dairy Plan, an industry-wide strategic plan that maps out a set of key initiatives to create a more profitable, confident and united Australian dairy industry over the next five years and beyond.
With a positive, yet cautious, outlook heading into a new year; we’ve got our eye on three trends that are most likely to shape the Australian dairy industry in 2021.
1TRADE AND FOREIGN MARKET ACCESS FOR AUSTRALIAN DAIRY
Australian dairy is an export over-achiever. While Australia accounts for only two per cent of estimated global milk production, our exports make up a five per cent share of the world dairy trade, which positions us as the fourth largest global exporter of dairy.
Australia’s dairy exports are estimated to generate annual revenue of $3.4 billion, with our key markets being China, South East Asia and Japan.
In respect to trade and foreign market access, the Australian dairy industry’s focus will be on Europe in 2021.
In a cause for concern, under a demanding Geographical Indications (GI) system, the European Union (EU) is pushing for exclusive use of 172 food names, which runs the risk of Australian dairy producers losing their right to common cheese names including feta and parmesan.
The Australian dairy industry believes that the EU’s demands are anti-competitive, overly restrictive and fail to take into proper account Australia’s status as a multicultural nation and our significant European heritage. The Australian Dairy Industry Council has calculated that the EU’s demand to restrict cheese and dairy product names could put $650 million worth of local product sales in jeopardy.
The Australian dairy industry has long been a supporter of an open international trading environment. We welcome trade agreements that create free and fair market access and trade opportunities between countries. We want to see this continue in 2021.
2
MANAGING PERCEPTIONS
AROUND THE HEALTH AND NUTRITIONAL VALUE OF DAIRY IN AUSTRALIA In Australia, Health Star Rating front of pack labelling is a key tool to help consumers make more informed, health-conscious dietary decisions. Since its implementation in June 2014, the Australian dairy industry has advocated for a fair labelling system that appropriately represents the nutritional credentials of dairy foods – milk, yoghurt and cheese.
Traditionally, the Health Star Ratings have been guided by the Australian Dietary Guidelines, which identify Five Food Groups essential for a balanced diet. The Five Food Groups are grains, vegetables, fruit, lean meats and poultry, and dairy – including milk, yoghurt and cheese.