01 September 1998 00:00 [Source: PCE]The food additives market is constantly expanding, fuelled by the growing popularity of processed foods and changing eating habits. Bill Macdonald chews the fat.
The market for food additives is characterised by increasing sophistication with demand mainly propelled by the rapidly growing processed foods sector. As lifestyles change and food processing technology evolves there is increasing demand for a variety of food additives, ranging from sweeteners to thickeners.
'Consumer preference in foods and flavours is continually changing due to fashion, lifestyle changes and the focus on healthy eating,' says Manoj Gujral, business director and general manager at Oxford Chemicals, a company that specialises in the manufacture and supply of speciality aroma chemicals to the global market for flavours and fragrances.
'Some markets record huge growth and often suffer equally rapid decline; alcopops for example, during recent years. Other market sectors are extremely mature as in the European carbonated soft drinks market. Here new branding or flavours, heavy advertising or cutting prices seem to be the only way to increase market share,' Gujral says.
The UK company is a prime manufacturer of flavour and fragrance ingredients, with a wide range of expertise in a variety of chemical processes based on reactions such as organosulphur chemistry, condensation reactions, Friedel-Crafts, sub-zero reactions, esterifications and vacuum distillations. Its manufacturing plant has more than 30 reaction and distillation vessels, all dedicated to the production of aroma chemicals. As well as a high-capacity manufacturing plant the company also offers kilo lab facilities. Oxford constantly works with its customers to help them create new aroma chemical compounds.
###6891###The tendency to spend less time cooking and to rely more heavily on the use of highly processed convenience foods has been a feature of the 1990s. These foods require the development of odour and taste properties in a shorter time, often by non-traditional cooking processes such as microwave. For savoury food, oven-based flavour chemical reactions, Maillard Reactions, normally occurring at temperatures of around 230°C in traditional roasting do not take place when food is warmed through at sub-100°C temperatures. 'The industry has responded by developing the use of very high-quality nature-identical additives,' says Gujral. 'These add to the desirability of foods by adding 'cooked notes', thereby enabling convenience foods to recreate a level of authenticity.'
Eating habits vary worldwide and tend to change slowly. However, certain sectors, especially the global fast-food sector, are still developing rapidly. The businesses involved are often the first to invest in emerging markets or market sectors and can, in many instances, be seen to be the driving force behind change in the food additive industry.
'As it is largely the young and affluent who are usually the first to purchase these products, the food additives industry appears to be more than ever linked to the influences of popular culture,' says Gujral.
###6892###Low-calorie foods are a major source of innovation for the food additives industry. While this is mostly a commodity-type market, the brand recognition and loyalty created for products such as Nutrasweet, produced by Monsanto, throws up interesting marketing ideas and challenges for companies, particularly for those investing heavily in research and development.
The US Food and Drug Administration (FDA) recently approved the use of the calorie-free sweetener Sunett (acesulfame potassium) in liquid beverages. The sweetener, made by the Hoechst subsidiary, Nutrinova, is expected to revolutionise the diet beverage industry in the US because of its unique taste characteristics and stability. Sunett is 200 times sweeter than sugar, calorie-free and heat stable, which means it can be used in cooking and baking.
Millions of Americans consume Sunett in products such as chewing gum, sweets, baked goods, ice cream, syrups, and dry-base beverage and dessert mixes. US consumers were first introduced to Sunett in 1988 when it received FDA approval for use in tabletop sweeteners, chewing gum and dry-base beverages, dessert and dairy product mixes. Since then, the FDA has approved its use as an ingredient in seven other food categories.
'We are glad that US consumers and beverage manufacturers will now have the opportunity to benefit from the ability of Sunett to significantly enhance the taste of diet beverages,' says Arthur Steinmetz, chief executive officer and president of Nutrinova. 'Blending Sunett with other low-calorie sweeteners creates a beverage with a more sugar-like taste than one sweetened with any single low-calorie sweetener. Consumers will now be able to enjoy more sugar-like diet beverages without the aftertaste.'
Another major attribute of Sunett is its stability. Beverages containing Sunett sustain their sweetness over longer periods of time, thereby increasing the sweetness shelf life of beverages and other food products.
One of the most thoroughly studied food ingredients, Sunett has a 15-year record of safe use worldwide. More than 90 studies have verified the safety of the sweetener. Numerous scientific and health authorities worldwide have endorsed the sweetener's safety, including the Joint Expert Committee for Food Additives of The World Health Organisation. The FDA and other leading health authorities have found the ingredient to be safe for all segments of the population. The sweetener is approved for use in about 90 other countries and is used in more than 4000 foods and beverages.
As well as promoting health through lowering calorie intake, food additives may now also have more direct health benefits. Lonza has set up a new website to promote L-carnitine, which it describes as 'the energy vitamin'. Sales of L-carnitine have been increasing strongly recently, partly due to FDA approval in some feed applications. L-Carnitine is a vitamin-like nutrient that Lonza claims helps individuals get 'more energy, lose weight, increase immune function, enhance and protect mental faculties, and lower cholesterol and triglyceride levels'.
Another example of a 'functional' food additive is stanol ester, which is produced from pine oil or resin, and is the key ingredient of the cholesterol-lowering Benecol products produced by Finnish company Raisio.
Raisio is planning to launch a new lower-fat version of its Benecol cholesterol-lowering margarine soon. Raisio's original Benecol margarine has gained a market share of 3% in Finland, around 12% of the total value of the market, since it was launched in November 1995. Earlier this year the company signed an agreement with McNeil Consumer Products, part of the Johnson & Johnson group, for McNeil to market Benecol worldwide. McNeil will also market the new, low-fat version.
Consumer trends, such as vegetarianism, are also impacting the market for food additives. According to the study Increasing Vegetarianism and Popularity of Ready-Made Foods Impacts Protein Ingredients Market by Frost & Sullivan, the international marketing consulting company, the huge rise in the number of vegetarians, particularly in northern European countries, has major ramifications for the European protein ingredients market as these substances are used in a variety of meat products.
At the same time, however, vegetable protein and mycoprotein ingredients will become more attractive to these users as a source of meat replacement, and are likely to increase in overall consumption.
According to Alex Casey, research analyst at Frost & Sullivan, a number of manufacturers have been researching and developing product lines to try and improve their products further in terms of functionality and nutritional content. This will enable a number of vegetable-based proteins to compete on an equal par with animal proteins and will increase the extent to which it can be substituted.
Demand for protein ingredients has also increased because of higher shipments in Europe of ready-made foods. Due to their functional and nutritional benefits, protein ingredients are more popular in manufactured foods than in home-prepared foods. Effectively, protein ingredients are used to improve taste and texture, while their excellent nutritional content boosts the protein value of the food.
The protein ingredient industry, valued at $5.5bn in terms of revenues in 1997, is a major constituent of the food industry, due to their unique functional and nutritional properties. The most important trend has been the increase in demand for all protein ingredients. This has increased revenue rates for the industry, but has also extended the life cycle of animal proteins. Over the past few years, there has been much speculation as to the demise of animal proteins compared to an increase in demand for vegetable proteins.
There is no significant evidence of this occurring. The total market for protein ingredients is expanding, so although there is a higher increase in shipments of vegetable proteins, shipments of animal proteins are also increasing.
Towards the end of the studied period, as the functionality of vegetable proteins is further improved, vegetable proteins will substitute animal proteins in higher volumes, driving revenues in the European protein ingredients market to $6.9bn in 2004.
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