Indian demand for processed food driving preservatives growth
burgeoning preservatives market, according to a new market report.
Frost & Sullivan's Indian Market for Preservatives Catering to the Foods and Personal Care Industries claims that the market earned revenues of $16 million in 2005, and is expected to reach $56.5 million in 2012.
"The Indian food and personal care industries are rapidly moving toward further processing and value addition," said Frost & Sullivan research analyst Aparna Singh.
"A combination of rapid urbanisation and increasingly hectic lifestyles is fuelling this trend, leading to increased demand for preservatives to sustain products between production and consumption."
Most food and personal care products are susceptible to decay by microorganisms and oxidation over time. The use of preservative substances, such as antioxidants and antimicrobials, is a common method to prevent this and extend the shelf life of food.
In many developed markets in the West however, consumers are increasingly demanding food products to be free from synthetic or chemical preservatives. As a result, many manufacturers are exploring new food processing and preservation methods, especially in the area of chilled foods, which make up a high percentage of the new product offerings on the market since the start of 2004.
Ingredients manufacturers, especially those with a focus on synthetic or chemical preservatives, are therefore looking for new options, including emerging markets. But while the Indian market might look attractive, Frost & Sullivan warns that a number of challenges still exist.
The report for example says that the low technology and a relatively unorganised market that still does not see the need for preservatives could limit further expansion.
"The preservatives industry in India will experience restricted growth invalue due to pressures on profit margins from customers and rising rawmaterial prices," said Singh. "Since fast moving consumer goods (FMCG)manufacturers themselves are facing intense competition and lower margins,preservative manufacturers have been unable to charge higher prices for their products."
Singh says that preservative manufacturers therefore need to adopt a two-pronged strategy depending on the targeted end of the market. In the unorganised sector, the challenge is to create awareness regarding the role and usage of these products, while corporate buyers seek other benefits such as new molecules with better safety profiles, products that perform multiple functions, or possess a wider spectrum of antimicrobial activity.
The Indian Market for Preservatives Catering to the Foods and Personal CareIndustries is part of Frost & Sullivan's Food and Beverage Growth Partnership Services. It provides trends and forecasts of the key preservative classes used in the Indian food and personal care industries.
