Food manufacturers favour client service over price when choosing a flavours supplier, latest research from market analysts Frost & Sullivan reveals.
The study interviewed customers throughout the flavours industry and investigated how they choose suppliers and make purchasing decisions.
According to Frost & Sullivan of the customers interviewed quality of service had the highest rating of importance for supplier selection.
Quality of service encompasses various factors such as pre-sales information, after sales support, technical advice and awareness of legislation.
"We found that the large flavouring producers generally do not provide the flexibility offered by their smaller rivals, as they often have minimum order size, which does not always fit the food manufacturers' production plans," commented Frost & Sullivan analyst Anna Ibbotson.
The purchase of flavourings is regarded as one of the most important purchasing decisions by food manufacturers, as the flavour of a food product is what differentiates it from its competitors.
The study reveals that product quality and taste were the two most important purchasing criteria.
Frost & Sullivan places the European flavours market at $1.29 billion (1.4 billion euros).
Dominated by 3 players, consolidation in the food industry has also reduced the base for the flavouring manufacturers.
As customers get larger they are increasingly pressuring manufacturers of flavourings to reduce price.
According to the report, the European Flavours Market, formulation of preferred supplier lists means closer relationships between supplier and customer, even at the R&D stage, but it also means suppliers must be able to supply flavourings for use across all application areas, or be highly specialised, to compete.