HIGHLIGHTS: JULY 28, 2023
• Defending dairy and trade’s role in sustainable food systems
• U.S. dairy signs MOU with Italy’s Assolatte
• USDEC seeks member input on new EU packaging rules
• Aug. 4 deadline for Gulfood booth space lottery
• September USDEC ingredient activity list for Southeast Asia
• USDA seeks applications for SEA mission by Aug. 2
• Tec de Monterrey event highlights dairy protein benefits
• Electronic SPS certification workshop
• Schreiber’s Jones offer tips on SEA dairy trade
• Chinese dairy imports continue to rebound
• USDEC’s May International Demand Analysis
• U.S. restaurant chains plot international growth
Featured
USDEC at UN food systems stocktaking moment
USDEC’s Nick Gardner, senior vice president, Sustainability and Multilateral Affairs, (SAMA), Jaime Castaneda, executive vice present, Policy and Strategy, and Janice Giddens, vice president, Sustainable Nutrition, were in Rome this week for the UN Food Systems Summit + 2 Stocktaking Moment (UNFSS+2). The UNFSS+2 was held to review progress, successes and challenges countries have faced since the 2021 UN Food Systems Summit in combatting hunger and malnutrition and building more sustainable, equitable and resilient food systems.
Given the way in which dairy and livestock were marginalized during the lead up to the original Food Systems Summit, USDEC and its public and private sector allies prioritized engagement at the event. USDEC’s efforts focused on deepening engagement to demonstrate U.S. dairy’s global sustainability leadership with the global voices and organizations shaping the future of world food policy, strengthening the U.S. dairy industry’s credibility with those groups in delivering high quality nutrition, and emphasizing the key role that trade plays in nourishing the world.
The meeting, which ran from July 24-26, took place at the headquarters of the Food and Agriculture Organization of the United Nations (FAO). Leaders and technical experts from around the world attended, including USDA Under Secretary for Marketing and Regulatory Programs Jenny Lester Moffit, who led the U.S. delegation.
Nick Gardner and Janice Giddens at the UN Food Systems Summit + 2 Stocktaking Moment this week in Rome.
Broad engagement
Gardner, Castaneda and Giddens attended the program and also met with decisionmakers and thought leaders stationed at FAO or in Rome for the meeting, including Under Secretary Moffitt. They continued to showcase U.S. dairy’s achievements and ongoing leadership to reduce emissions and explore opportunities to enhance productivity by adopting practices and technologies that can have a meaningful impact on the dairy sector’s environmental footprint. A key message in those efforts is that a one-size-fits-all policy will not work when it comes to sustainable food systems and nourishing the world.
“We maximized every opportunity to advocate for the role of U.S. dairy in sustainable food systems,” said Gardner. “We are seeing that livestock is being received better than during the original UN Food Systems Summit. At the same time, we’re seeing that the role of trade in nourishing a growing population continues to face criticism from many within the UN.”
The improved tone on livestock witnessed in Rome this week is due in part to USDEC’s ongoing engagement there and with the stakeholders that shape the discussion around sustainable food systems. However, the war on animal protein continues, and USDEC must push back against activists that seek to undercut the critical role of international trade in delivering sustainable food systems, minimize the benefits of animal-sourced foods and seek to create regulatory environments that could restrict U.S. dairy exports.
More to come
The UNFSS+2 is one of three major meetings in the second half of 2023. The FAO Global Conference on Sustainable Livestock Transformation takes place in Rome on Sept. 25-27 and COP28 is being held in Dubai from Nov. 30-Dec. 12. USDEC’s participation in the UNFSS+2 helps set the table for those two conferences, building a collaborative strategy with our global allies and demonstrating ongoing U.S. leadership in the area of sustainable food systems.
USDEC signs MOU with Italian dairy group
The trip to Rome this week served a dual purpose: While there, USDEC and NMPF also signed a memorandum of understanding (MOU) with the Italian dairy organization Associazione Italiana Lattiero Casearia (Assolatte) strengthening cooperation between the two nations’ dairy sectors.
The deal centers on defending the image of dairy and ensuring that our voices are heard withing the European and Italian governments as well as the United States. The MOU focuses on preventing lab-created products from using dairy terms for milk and dairy products, advocating for international standards and guidelines that recognize the contributions of the global dairy industry to sustainable food systems, nutrition and promoting science-based policies around the world.
Left to right: Jaime Castaneda, USDEC and NMPF executive vice president for policy development and strategy, Paolo Zanetti, chairman of Assolatte, and Nick Gardner, USDEC senior vice president, Sustainability and Multilateral Affairs.
“This agreement is an important step in growing our voice as we continue to call for fair, science-based policies that support sustainable growth for dairy producers and manufacturers around the world,” USDEC President and CEO Krysta Harden said in a joint press release on the agreement.
The initial term of the Assolatte MOU is through 2025. It is the latest in a series of cooperative agreements USDEC has made with foreign dairy groups to support dairy-friendly policies in international forums. The MOU’s focus on collaboration to address global issues impacting dairy and dairy trade aligns with similar MOUs signed last year with Sociedad Rural Argentina (see Global Dairy eBrief, 9/9/22) and the Chilean Federacion Nacional de Productores de Leche (Fedeleche) (see Global Dairy eBrief, 9/30/22).
USDEC seeks member feedback on EU packaging proposals
USDEC is seeking member feedback on new European Commission packaging proposals that may affect U.S. dairy exports.
We are asking members to complete a packaging survey by Aug. 8 to ensure that we fully represent your concerns. See the July 24 Member Alert for a link to the survey and more details on the proposals. Responses to the survey will be treated as confidential. USDEC will only share aggregated member feedback with the U.S. government to inform strategy moving forward.
The proposed requirements include:
- A ban on Bisphenol A (BPA) in all food contact materials by late 2025/early 2026.
- A ban on the intentional use of per- and polyfluoroalkyl substances (PFAS) on paper and cardboard food packaging materials. The planned enforcement date is not clearly identified.
- New rules on recyclable packaging, use of recycled content, and re-use requirements for packaging under the proposed Packaging and Packaging Waste Regulation (PPWR).
Please contact Sandra Benson at sbenson@usdec.org for more information or with any questions.
Events
Calling all members interested in exhibiting at Gulfood 2024
Next year’s Gulfood show takes place Feb. 19-23 and USDEC has 14 spaces in the USDEC booth available to members interested in participating in the event. Because membership interest in Gulfood usually exceeds available USDEC booth space, spots will be allocated via a random lottery system. Here are the details:
- If you are interested in participating in the USDEC booth, you must fill out this brief survey no later than Friday, Aug. 4. Members who fill out the survey will be entered into the lottery drawing.
- USDEC will only be able to accommodate subsequent requests for booth space after all members who have filled out the survey have been allocated a space OR if there is a cancellation.
- The 2023 participation fees are $9,000 for an interior booth and $10,000 for a corner booth. Fees are nonrefundable in the case of a cancellation unless the space can be reallocated to another member.
- USDEC will communicate more details on EXACT booth locations in early September.
USDEC is looking into options to provide more space but at this time can only confirm 14 spaces.
A loaded month of ingredient activities slated for Southeast Asia in September
September will be a packed month for USDEC ingredient activities in Southeast Asia. Below is a list of planned events. For more information on Fi Asia, please contact Keith Meyer at kmeyer@usdec.org. For more information on any of the other events, please contact Kristi Saitama at ksaitama@usdec.org.
- Sept. 5: Key opinion leader roundtable discussion, “Optimizing Healthy, Sustainable Eating with U.S. Dairy Proteins,” at the U.S. CDE, Singapore.
- Sept. 6: USDEC seminar, “Fit for Life: Exploring U.S. Dairy Nutrition and Innovation Advantages Throughout Life’s Journey,” at the ParkRoyal on Beach Road, Singapore.
- Sept. 7: Hands-on innovation seminar, “Sip to Success: Elevating Ready-to-Drink Beverages with U.S. Dairy Proteins,” at the U.S. CDE, Singapore.
- Sept. 8 Hands-on innovation seminar, “Sip to Success: Elevating Ready-to-Mix Beverages with U.S. Dairy Proteins,” at the U.S. CDE, Singapore.
- Sept. 18: U.S. Dairy Supply Workshop at The Okura Prestige, Bangkok.
- Sept. 20-22: Fi Asia Thailand trade show at the Queen Sirkit National Convention Center, Bangkok.
The two hands-on innovation seminars target R&D staff of beverage companies, while the supply workshop and trade show in Bangkok will have a wider audience of formulators and purchasing decision-makers in the food and beverage space.
All the Singapore events will feature guest speakers, including nutritionist Leslie Bonci, owner of nutrition consulting company Active Eating Advice, and Martin Teo, USDEC Southeast Asia’s technical director, food applications.
Applications due Wednesday, Aug. 2, for FAS trade mission to Southeast Asia
USDA’s Foreign Agricultural Service (FAS) is inviting U.S. ag exporters to participate in a trade mission to Kuala Lumpur, Malaysia, and Singapore. The trip takes place Oct. 30-Nov. 3, but the application deadline is Wednesday, Aug. 2.
“Consumer demand for U.S. products in both Malaysia and Singapore is on the rise, making this agribusiness trade mission extremely timely,” said USDA Under Secretary for Trade and Foreign Agricultural Affairs Alexis Taylor, who is leading the mission. “It gives U.S. exporters a wonderful opening to build and strengthen their relationships with local importers.”
The mission will include presentations from government and industry leaders on local market conditions and visits to local retail stores and food manufacturers. FAS staff will arrange one-on-one meetings between participants and potential buyers. For more information on the trip, including a link to the online application form, click here.
Students, local dairy companies learn U.S. dairy protein advantages at Tec de Monterrey educational event
USDEC’s partnership with Mexico’s Tec de Monterrey University continues to generate opportunities to engage with dairy science students and local industry and increase the visibility of U.S. dairy ingredients. Last week, USDEC participated in an educational event at the school’s Monterrey campus highlighting U.S. dairy protein benefits to a crowd of students, academic staff, representatives from regional dairy companies and Luis Chavez, with the Foreign Agricultural Service’s Agricultural Trade Office in Monterrey.
Enrique Romo, former USDEC Mexico staff member, spoke on behalf of USDEC, highlighting the functionality of dairy proteins, and participated in a panel discussion with representatives from Sigma Alimentos and Nestlé. Romo has strong whey protein expertise and industry experience, plus his family runs a cheese factory in Mexico.
USDEC also distributed to attendees the monograph, “A New Era for Protein: Why U.S. Dairy Delivers in the Crowded Protein Marketplace,” and milk and whey ingredients manuals. The event follows a similar educational session at Tec de Monterrey’s Querétaro campus on World Milk Day 6/2/23 and 6/9/23).
Workshop explores ways to increase use of electronic SPS certification
USDEC staff took part this week in a three-day workshop aimed at increasing the uptake of electronic sanitary and phytosanitary (SPS) certification in the Americas. Electronic certification can increase the speed of certification, simplify the process, and make it easier for U.S. dairy suppliers to get product cleared into other markets.
On the plus side, the Americas have been a leader in adopting electronic SPS certification through the ePhyto Hub (a centralized exchange system for ePhytos that can be used by all national plant protection organizations). On the minus side, uptake of electronic veterinary certification (eVet) is advancing much more slowly.
eVet offers significant opportunities to increase operational efficiency and facilitate agricultural trade. However, broadly implementing the system faces significant challenges, such as diversity of format and contents of data elements.
The Inter-American Institute for Cooperation on Agriculture (IICA) organized the workshop to explore solutions to those challenges and discuss regional harmonization of the system. IICA is currently exploring the development of a project to pilot a regional approach for the exchange of electronic veterinary certificates, although the effort may require reforming legislation, modernizing infrastructure and shifting mindsets to implement change.
Experts from the Americas and beyond spoke at the event, offering their takes on the challenges and opportunities. USDEC participated as part of ongoing efforts to simplify market access for members and to work closely with the U.S. government to ensure we are able to meet export certification requirements.
Schreiber’s Jones highlights Southeast Asia potential, export tips at DMI board meeting
Quintin Jones, Schreiber Foods business development director, APMEA, offered his take on Southeast Asian dairy market potential and the U.S. Center for Dairy Excellence (U.S. CDE) at last week’s Dairy Management Inc. board meeting in Chicago. Jones’ comments dovetailed with some of the comments made earlier in the meeting by USDEC President and CEO Krysta Harden, COO Martha Scott Poindexter and U.S. dairy farmers who participated in June’s farmer information mission to Singapore.
Here are three key takeaways from his session:
1. Jones built on the farmers’ remarks, stressing the importance of relationships to growing U.S. dairy sales to the region. “You have to be present and build relationships,” he said. Understanding the local culture and building relationships is essential to success in Southeast Asia. Being transnational doesn’t work, he said.
2. Halal is critical for success—and not just to supply to predominantly Muslim markets like Indonesia and Malaysia. Halal products can be sold anywhere around the world, whereas non-halal products will limit opportunities throughout Southeast Asia and globally.
3. The U.S. CDE “checks every box” in terms of what Schreiber is looking for as a company in Southeast Asia, with features like its demo kitchen and state-of-the-art information technology infrastructure. In addition, USDEC support in the form of market and customer information, trade missions, food trade shows and other activities are an asset for Schreiber Foods that helps the company accelerate its market inroads, Jones said.
For more on the DMI meeting, including a video that was shown capturing farmer assessments of the U.S. CDE from last month’s farmer mission to Southeast Asia, see Global Dairy eBrief, 7/21/23.
Market Summary
Chinese dairy imports rise 28% in June
Chinese dairy demand showed continued signs of recovery in June, with year-over-year volume (major products, not including fluid) rising 28%. It was the fifth straight year-over-year increase and the biggest of the bunch. It also comes despite ongoing questions surrounding China’s economy.
In the second quarter, China’s economy grew just 0.8% from the first quarter, below expectations and much slower than the 2.2% quarter-to-quarter increase in January-March. Year-over-year 2Q GDP growth was a healthy 6.3%, but that too fell short of expectations and was inflated due to the COVID-locked-down second quarter of 2022.
This week, Chinese leaders promised to step-up economic stimulus measures to address the disappointing results and growing concerns about growth, but they did not announce any details at press time.
Despite the challenges, June dairy import demand was strong across most product categories.
- China’s year-over-year cheese imports soared 73% (+7,064 MT) to a June record of 16,677 MT.
- SMP purchasing increased for the fifth straight month, rising 20% (+4,864 MT).
- Butter recorded its first year-over-year gain of 2023, as volume jumped 50% (+2,806 MT).
- Lactose imports skyrocketed by 91% (+9,566 MT).
- WMP posted its second consecutive monthly increase, growing 37% (+13,327 MT) over the previous June.
- WPC80+ imports rose 38% (+1,188 MT), its first year-over-year increase since January.
Halfway through 2023, overall Chinese dairy imports (not including fluid) remained down significantly (-85,536 MT), due almost solely to reduced WMP purchasing over the first four months of the year. But the shortfall continues to shrink. The question is whether the nation’s economic challenges will begin to blunt its dairy demand recovery moving forward.
USDEC International Demand Analysis with May data ready for download
Year-over-year global dairy trade jumped more than 5% in milk solids equivalent (MSE) terms in May, according to the latest USDEC International Demand Analysis. It was the largest increase of the year (buoyed in part by a poor May 2022) and came despite a 12% MSE decline in U.S. shipments. New Zealand (+39.2%) was the big driver, with additional support from the EU (+1.4%).
Year-to-date volume through May was up just under 1%. If 2022 was a year of global dairy trade contraction, 2023 is so far shaping up to be the year of stabilization.
For more details on May global dairy trade and the outlook moving forward, download the report here. The International Demand Analysis is packed with charts, graphs and commentary, providing members with a forward-looking glimpse at world markets from a U.S. exporter’s point of view. It analyzes demand in the key markets for cheese, NFDM/SMP, whey (HS Code 0404.10) and WPC80+, and also includes shorter summaries for lactose, butterfat and WMP. For questions and comments, please reach out to William Loux (wloux@usdec.org) or Stephen Cain (scain@nmpf.org).
Company News
Chain restaurants expand overseas
With the pandemic seemingly in the rearview mirror, Western-based chain restaurants are once again moving to grow their international businesses. Here are a few recent highlights:
- McDonald’s Corp. is spending more than A$1 billion (about US$677 million) over the next three years to add 100 new stores and refurbish more than 500 existing outlets in Australia.
- Chipotle signed an agreement with Kuwait-based Alshaya Group to open two stores each in Dubai and Kuwait next year. the Deal is Chipotle’s first franchise agreement (all existing stores in the U.S., Canada and Europe are company-owned) and the stores will be the first in the Middle East. Alshaya is also a franchisee for other major U.S. restaurant brands, including Starbucks, and Shake Shack. Chipotle said the agreement could serve as a new model as the company looks to expand to other global markets.
- Dine Brands is bringing its Applebee’s and IHOP chains to Japan (and a handful of EU countries) but not in a traditional manner. Dine is working with Georgia-based Franklin Junction, a company that specializes in matching restaurant brands with “host kitchens” and providing the technology to set up a delivery-only, virtual presence in the market. Dine said the new strategy will open new opportunities for IHOP and Applebee’s in key international markets.
- Burger King’s Thai outlets rolled out a new sandwich it is characterizing as a “real cheeseburger.” Instead of meat and cheese on a bun, the “cheeseburger” contains up to 20 slices of cheese. The sandwich went viral on social media earlier this month and was reportedly selling well. Thai conglomerate Minor International, which runs more than 2,000 foodservice outlets in over 25 countries, operates the Burger King franchise in Thailand. (USDEC Southeast Asia office; Company reports; Bloomberg, 7/22/23; Restaurant Business, 7/19/23; CNBC, 7/18/23)
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