The European organic market is growing by approximately six percent (24 billion euros in 2013) with double-digit growth in Switzerland, Sweden, and Norway. In this scenario direct sales (e.g. from farmer to customer) weighs about 5% and it is continuously increasing since...
The European organic market is growing by approximately six percent (24 billion euros in 2013) with double-digit growth in Switzerland, Sweden, and Norway. In this scenario direct sales (e.g. from farmer to customer) weighs about 5% and it is continuously increasing since Â«zero kmÂ» food is perceived as higher value by final customer, who accepts to pay more thus allowing the suppliers to compensate for higher cost and inefficiencies of the small scale production. This direct sale is particularly interesting to dairy farmers, who receive by dairies a very low price (0.32â‚¬/l for best quality organic milk) while direct customer would be willing to pay much more (at least 1â‚¬/l up to 2â‚¬/l) for the same product. However, consumption of raw milk carries some risks because of the potential presence of pathogens. This factor stops many consumers from buying raw milk and many farmers selling it because of liability issues. On the other hands, sterilising solutions that keep intact nutrients and organoleptic qualities, while ensuring the standards of hygiene and safety are still far from affordable at the small scale required by the farmer, owing to inefficiency and relative high costs of downscaling current industrial food processing solutions. As a consequence, farmers are able to sell directly only small quantities of raw milk, but could attract a far larger number of consumers if they were able to offer a wholesome but microbiologically safe food.
EMILK intends to explore the feasibility of introducing to the market a small milk steriliser and distribution unit based on a patent pending device developing high voltage (>100kV) nanopulsed electric discharge in liquids. The device is able to abate microbial content without altering the nutritional content of raw milk, such as omega fats and proteins. The study will quantify the biocidal effects of the technology, it will consider the technical feasibility and explore further the market opportunity, so that to prepare an elaborated business plan to be used as basis for a Phase 2 application.
Under the EMILK feasibility study LaserLam was able to undertake both experimental and analytical work. These are the activities undertaken:
â€¢ Quantifying the effect of the treatment on pathogens commonly found in raw milk: LaserLam had been working with Turin University on a parallel study sampling milk from vending machines and analysing it before and after treatment. During this campaign, only pathogen-free samples were obtained, testifying the high level of hygiene reached by the farmers managing the vending machines. Indeed, the testing schedule set up by the Regional Health Authority for sellers of raw milk would ascertain the presence of dangerous microbes and cause closure of the dairy farm infected, with clear consequences on their business and reputation. Therefore farmers are particularly careful about the management of the animals health and hygiene. Discussion with experts from Turin University led to the decision to plan a testing campaign focusing on different laboratory grown bacteria (with different sizes and shapes, so to capture the range of microbes found in raw milk). The results obtained so far have demonstrated the wide range of bacteria the technology affects varying different operational parameters within the limits of maximum voltage and maximum treatment time most suitable for treating raw milk. The feasibility study confirmed that EMILK can deliver safe and nutritious food.
â€¢ Scaling up the treated volume to half a litre: this brings the treated batch to half the volume typically bought by customers each time through a vending machine, and it is a key advancement towards a solution for a continuous or semi-continuous treatment. Work undertaken included designing and manufacturing the reactor and undertaking tests to verify repeatability of the results obtained with the smaller reactor. The results were confirmed for this volume of treatment which anyway would require 3 minutes wait (1.5 minutes each half a litre) by the customer. To shorten this timing, the team has devised an alternative reactor shape that is currently being engineered and prototyped for testing, continuing the development work in self-financing. The feasibility study confirmed that EMILK can be integrated easily within a raw milk vending machine with a slight change of customerâ€™s experience; this can be improved through a redesign of the reactor. This will make the EMILK a unique device worth patenting.
â€¢ The market analysis was commissioned in two phases. The first focused on the comparison between the two business options open to LaserLam, i.e. embarking in producing a new, EMILK branded vending machine, or producing only the device as component of a vending machine already on the market, selling it exclusively to one manufacturer or licensing the technology. The second phase considered the current and projected raw milk vending machine market for the core 7 European Union Countries (Italy, Germany, France, the UK, Spain, Belgium, the Netherlands), the former Soviet Union Countries and the rest of Europe. It also analysed the market share of the main competitors and their strengths. This was complemented by LaserLamâ€™ own analysis of the market (European farmers diversifying in direct sales and educational activities to whom the sale of safe raw milk might open further opportunities; consumersâ€™ interest in local food) and stakeholders involvement (dairy farmers in Italy and the UK, local representatives of dairy farmers, local agrifood technological cluster). The feasibility study confirmed that the market for vending machines is growing despite the different regulatory landscape within Europe, and that the vending machines equipped with the new technology would allow access a market untapped and not accessible to the current competitors.
EMILK Phase 1 feasibility study results:
â€¢ The technology of the device has been validated and demonstrated reaching a satisfactory reduction in microbial charge. The technology
Through the Phase1 Feasibility study LaserLam was able to understand better the market thanks to a specialist market analysis, which also gathered information on competitors, complemented by a in house study of the current and prospective customerâ€™s characteristics, including their willingness to pay. This allowed to formulate a market demand analysis to be matched with a production capability and the underlying investments required. With respect to the start of Phase 1, LaserLam has therefore been able to verify the profitability of its business idea with more market information.
From a technological point of view, LaserLam has been able to characterise the technology in terms of defining a relation between operating parameters and effects, and it has identified a technological solution that allows an efficient and effective treatment of milk during distribution to the customer. As a result, LaserLam is working towards a new patent application complementing the one already underway on the technology.
LaserLam has been able to contact different stakeholders through Phase 1 gathering interest in its solution and ascertaining the impact that its implementation might have. In socio economic terms, the solution would benefit small dairy farmers currently facing closure of their operations because of the disproportion between income from dairies (low and decreasing) and cost of milk production (stable or increasing) making the business unsustainable. EMILK allows this category not only to find a different market for their milk, i.e. direct sale to customers already achieved via current technology vending machines â€“ but also to increase the volumes of sales because of the ability to sell safe raw milk to a wider customer base through EMILK. This translate into a concrete business and livelihood prospect for small farmers, who are key part of the European agriculture and its territory. A further impact of the technology is linked to the advances in the understanding of the benefits associated with raw milk consumption: it is proven that children drinking raw milk grow with lower chances of allergic reactions and that raw milk from grass fed cows contains high quantities of beneficial omega fats. The EMILK technology, by sanitising the raw milk whilst leaving unaltered the nutrients within, enable children and adults to access safely the benefits of this food. This is in line with the European strategy for accessible and healthy food.
Finally, from a business perspective, LaserLam will be able to switch from being a metal working services provider with an unpredictable order book to a manufacturer with a good business prospect. Furthermore, at least 10 workers, from shop workers to admin to R&D staff, will be employed by the new business.
LaserLam has concluded Phase 1 with an elaborated business plan that has been used as a basis for a Phase 2 application to be submitted in June 2016. Work on the development of the technology is continuing via self funding. LaserLam will also work towards a new patent application to strengthen its position and pave the way to the exploitation of its idea.
More info: http://www.emilk.it.