Phytonutrients: price erosion strongest restraint on revenue growth
threatened by cheap imports from Asia, cites a new report from
market analysts Frost & Sullivan this week.
The market for European phytonutrients producers appears to be threatened by cheap imports from Asia, cites a new report from market analysts Frost & Sullivan this week.
According to the report, due to increased competition and improved extraction techniques, prices in this market are in a declining trend. The report claims that Asian producers are selling below cost in an effort to gain European market share.
The study looks at the five most common phytonutrients - vitamin E, carotenoids, flavonoids, isoflavones and phytosterols - and forecasts that the total market, worth $585 million (€667.5m) today, will grow at a compound annual growth rate of 4.2 per cent to reach $780 million by 2008.
However, some of the individual segments are forecast to have much higher growth rates. But, over the same period, most phytonutrient prices are expected to be in a constant decline. Price erosion is forecast to be the strongest restraint on revenue growth in the phytonutrient market despite higher sales volumes.
Anna Ibbotson, food programme manager, Frost & Sullivan, commented: "In the phytonutrients market, competition has risen and extraction techniques have improved. As a result, phytonutrient prices have started falling. This trend is expected to remain effective throughout the 2001 to 2008 period, and manufacturers must develop cost reduction strategies in order to maintain margins and competitiveness."
The report suggests that phytonutrient manufacturers should improve production costs and raw material supply and realise savings through economies of scale when the volumes allow, or by further improving production techniques.
