Fat replacers and emulsifiers lead value growth for global food additives
the global €18 billion food additives market, while sweeteners and
acidulants are increasingly impacted by competition from Asia.
The food additives market is expected to continue to grow at a rate of around 2 to 3 per cent per year over the next 3 years, taking total sales to an estimated €19.8 billion by 2007, reports Leatherhead Food International.
But price changes due to cheaper Asian products flooding the international market have particularly hit acidulants (citric, lactic and sorbic acids for example) that actually saw the market falling in value terms by 4 per cent.
"In many sectors, prices have come under heavy pressure as cheaper product has flooded the market from China.
In order to compete with Chinese firms at the lower pricing levels, many western suppliers have invested in the Chinese market, having formed joint ventures with local Chinese firms, acquired local businesses, or built their own production operations within China," says the Leatherhead report.
Along with acidulants, sweeteners (bulk such as sorbitol, and intense like saccharin) have also been hit by the undercutting of prices.
Consquently, despite healthy volume growth as consumer demand for weight and health-conscious foods lifts demand, market value growth since 2001 has come in at just 1 per cent.
On the upside, market value since 2001 rose by some 6.8 per cent for fat replacers and 5.6 per cent for emulisifiers, while antioxidants and hydrocolloids were up 3.7 and 3.2 per cent respectively.
Flavours remains the most important additive category, taking about a quarter of the market with sales at an estimated €4.9 billion in 2004. Functional food ingredients is carving a position as a "very significant market and a keygrowth sector", reports Leatherhead.
Including some non-food use and use in dietary supplements, sales were worth €2.97 billion in 2004, the bulk of which(€1.86 billion) comes from soya proteins and isoflavones.
Reflecting the picture in the overall food ingredients industry, companies involved in additives continue to consolidate, with merger and acquisition deals remaining commonplace in this market.
In the past few years, major industry players such as Rhodia and Roche have exited the sector. The former shed its foodingredients operations, mainly to Danish ingredient firm Danisco but with selectedoperations going to other buyers, while Roche's vitamins and foodadditives business was acquired by DSM.
