25 February 2002 00:00 [Source: ICB Americas]The quest for healthy, low-fat foods continues to drive growth for the $414 million fat replacers market in the US despite obstacles of negative publicity and waning consumer interest for fat-free foods because of taste concerns. However, strong marketing and urgings of health organizations for a healthy diet have led to several developments for an ideal fat replacer that recreates all the attributes of fat while significantly reducing fat and calorie content.
More than 3,000 new low- or reduced-fat products have been introduced since 1997, and they can be classified as carbohydrate-based, protein-based or fat-based. Currently, carbohydrate-based fat replacers are experiencing the highest growth among the three segments with the largest number of market participants. The fat-based category is trailing because of the decline in demand for the two largest fat-based fat replacer products, olestra and salatrim.
Olestra, a product of Procter & Gamble Company (P&G) and marketed as Olean, is a calorie-free ingredient made from sucrose and edible fats and oils. It is used in snacks such as potato chips and crackers. Salatrim, an esterified monostearin developed by Nabisco and now marketed by Danisco Cultor as BenefatH, consists of short-chain acids and long-chain fatty acids used in confections, baked goods, dairy products and other applications.
Olestra's sales plummeted in the late 1990s as consumer groups raised concerns about its possible side effects. These concerns negatively affected the sales of salatrim, and in chain reaction, affected revenue growth of the overall fat replacers market.
"The US fat replacers market in 2000 was worth approximately $400 million but exhibited negative revenue growth of nearly 20 percent over the preceding year due to declining sales for fat-based fat replacers, particularly olestra and salatrim," says Girish Solanki, industry analyst at the international market consulting firm, Frost & Sullivan. "However, consumers are steadily regaining confidence of these products because of further testing and safety assurance by regulatory bodies such as the Food & Drug Administration. This bodes well for the future growth rate, especially for fat-based fat replacers," he adds.
The increase use of vegetable oil-based monoglyceride and diglyceride emulsifiers as ingredients in fat replacers is also expected to boost growth for fat-based fat replacers, says Mr. Solanki. Growth for fat-based fat replacers is expected to stabilize at 1.7 percent. "At present the fat-based fat replacer market is worth around $76 million and is expected to reach $87 million in 2007," says Mr. Solanki.
P&G, Danisco Cultor and Loders Crocklaan are the largest players in the fat-based segment, accounting for 94 percent of the total market. Others include ACH Food Companies, Lonza Group, Stepan Company and Abitec Corp. Stepan and Abitec are major marketers of medium-chain triglycerides (MCTs) in the nutrition food market. MCTs are esters of fractionated coconut oil fatty acids, and studies suggest that MCTs are burned readily for energy and have little tendency to accumulate as fat in the body.
"MCTs are a fast, readily absorbed, low-calorie fat source with applications for use in products designed to provide energy and other nutritional benefits," says a Stepan official. "They produce little effect on cholesterol levels under normal circumstances and do not suppress the immune system as well."
Estimated demand for MCTs in the US is around $16 million to $18 million per year in terms of volume in the food and flavor and personal care and cosmetics industry applications. Growth is said to be steady at 10 percent per year.
In food applications, MCTs have been used in medical and infant feeding products for more than 30 years, but have not been readily embraced by the mainstream food industry because of their high cost. However, recent use has been expanded into sports/nutrition food products that target health-conscious and weight-challenged consumers. Athletes are said to have been relying on MCTs as a readily available source of energy.
A new fat-based fat replacer ingredient in the US that seems to be promising, according to analysts, is the diacylglycerol (DAG) oil introduced early last year by Archer Daniels Midland Company (ADM). ADM and Kao Corp. of Japan formed a joint venture to produce and market DAG oil as a replacement for conventional edible oils in cooking oils, salad dressings, spreads and other products. DAG oil was developed by Kao and is said to prevent increases in body fat through faster fat metabolism.
The DAG oil product will soon be coming on stream under the name Enova, said an ADM official at Goldman Sachs Group Inc.'s annual conference held earlier this month. "It is currently under a great deal of discussion by the major retailers of cooking oils, salad dressings, and other products for incorporation and has a great deal of promise for us as a long term product line," says the official.
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