Natural and Health Ingredients

8/2/2019 Natural and Health Ingredients

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update 19-01-2012


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2| The Future for Natural and Health Ingredients |rts-resource.com

Published by RTS Resource

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Contents

i insight

Opportunities for ingredients

Growth markets

Trends adding value

New product development

1 Flavours

2 Seasonings, Herbs and Spices

3 Colours

4 Hydrocolloids

5 Sweeteners

6 Fat Replacers

7 Vitamins and Minerals

8 The Future for Ingredients

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Opportunities for

ingredients

In global terms, the industrial food and drink

market is growing slightly ahead of population

growth. As the world becomes increasingly urban

and relatively affluent, food production needs to

become more industrial and sophisticated in order

to supply these changing demographics,

presenting opportunities for suppliers of

ingredients.

In Europe food consumption is growing slowly, by

less than 0.5% per year in volume, although value

growth is higher, mainly due to inflation and rising

raw material costs. Although this total figure

disguises many different consumption trends, it

does mean that most companies looking to

achieve annual sales growth of 5% or more are

going to be disappointed!

So, each food manufacturer is looking for the

competitive edge that will take them into growth

sectors and markets and trends and ingredients are

key to making this happen.

For the food industry - and suppliers of ingredients in

particular - the message is clear. Identifying and and

exploiting trends will provide some of the major ways to

achieve profitability and growth.

insight


Each food

manufacturer is

looking for the

competitive

edge and

ingredients are

key to making

this happenSteve Rice, Managing Director,

RTS
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Growth markets

While demand for food and drink in Western Europea

is now relatively static at around 1.3trillion, the

market for ingredients is both dynamic and complex.

Rising raw material costs and the shift to natural

ingredients has resulted in rapid growth in the value

of the market for flavours, colours and sweeteners. In

particular, our forecasts show significant growth

opportunities for natural flavours, colouring foodstuffs

and fat replacers.

Meanwhile the less dynamic, but nonetheless

significant markets for hydrocolloids, synthetic

flavours and industrial seasonings will still deliver

significant sales value.

Over the next five years cost pressures, limited

product life cycles and sustainability are all critical

factors for the food ingredients industry.

insight


Natural

flavours,

colouringfoodstuffs and

fat replacers are

key growth

marketsJamie Rice, Global Insight

Director, RTS

Ingredients in food and drink

Western Europe, market value 2010

Seasonings Flavours Colours Hydrocolloids Sweeteners Fat replacers Vitamins &minerals

0.1bn

0.2bn0.3bn

0.8bn0.9bn

1.3bn1.3bn


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Trends adding value

Everyone seems to be talking about trends in the

food industry: consumer trends, market trends and

flavour trends. Is this simply the new buzzword or are

trends critical for growth? How can ingredient

suppliers use trend-led information to drive NPD?

In todays highly competitive market, producing

effective ingredients is no longer enough for

continued success. You must also clearly

communicate the benefits of your products - both to

manufacturers and consumers. Knowing whichtrends are driving the market, how they interact and,

crucially, how to make them work for you is the key to

delivering business growth.

Analysing past product launches without considering

trends is a poor guide to future success. Our

extensive global food industry research allows us to

determine the importance and significance of trends

for the food and ingredients industry.

Our research has identified the following key

SuperTrends:

Health and Wellbeing

Experiences

Local:Global

Flavour Trends

FREE subscription to Trendwatch

In 2012, consumers will balance their desire for new taste

experiences with a more selective approach to the food and

drink they purchase. For more information and to subscribe

to our monthly food ingredient trends newsletter click here.

insight


For future

success,

understand howtrends interact

and how to

make them work

for youMiranda Dickinson,

Trend Analyst, RTS
http://www.rts-resource.com/Reports_Store/Trends/Local-Global.aspxhttp://www.rts-resource.com/Reports_Store/Trends/Experiences.aspxhttp://www.rts-resource.com/Reports_Store/Trends/Experiences.aspxhttp://www.rts-resource.com/Reports_Store/Trends/Health--Wellbeing.aspxhttp://www.rts-resource.com/Reports_Store/Trends/Health--Wellbeing.aspxhttp://www.rts-resource.com/Reports_Store/Trends/Local-Global.aspxhttp://www.rts-resource.com/http://www.rts-resource.com/http://eepurl.com/gOibnhttp://eepurl.com/gOibnhttp://www.rts-resource.com/Reports_Store/Trends/Local-Global.aspxhttp://www.rts-resource.com/Reports_Store/Trends/Local-Global.aspxhttp://www.rts-resource.com/Reports_Store/Trends/Experiences.aspxhttp://www.rts-resource.com/Reports_Store/Trends/Experiences.aspxhttp://www.rts-resource.com/Reports_Store/Trends/Health--Wellbeing.aspxhttp://www.rts-resource.com/Reports_Store/Trends/Health--Wellbeing.aspx


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New product development

Analysis of new product launches across Europe

demonstrates how manufacturers are seeking to add

value by predicting future trends such as using

naturally healthy ingredients, inspiring consumers

with exciting new taste experiences, using

provenance flavours and growing consumer desire

for authentic products and recipes.

insight


Naturally healthy

BrandFleury MichonProduct Cuisine Bien-tre

Varieties Scallops, with pasta and

lemon; Shrimp curry, vegetables,

basmati rice; Risotto verde with

scallops

Meals are prepared with herbs,

spices and citrus juices to reduce

salt and fat content. Ingredients

include ginger, chives, lemon grass,

turmeric, curry powder and kaffir

lime appealing to consumers who

are seeking new and intense flavour

experiences.

Provenance

Brand Lays

Product Crisps

Flavours Japanese Teriyaki

New product

trends reinforce

the need foringredient

suppliers to be

ahead of the

gameKate Hand,

Research Analyst, RTS

Authenticity

Brands Yutaka,

Ajinomoto, Asahi and

Mizkan

(imported by Tazaki

Foods)

Products

Tazaki Foods imports authentic

Japanese brands.

Taste experiences

Brand Heston from Waitrose

Product Ice Cream

Flavours Chocolate and Rosemary

Mustard; Salted Caramel PopcornSavoury ice cream.

Serve with chilled soups, cold

meats, smoked fish, hot or cold ham

and tomato salads
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Flavours

Rapid growth in natural flavours

Synthetic flavours still account for more than half of

the total flavours market

Soft drinks is the largest user of natural and synthetic

flavours

The market for flavours in food and drink in Western Europe

is now worth 1,280m and is growing at a rate of 3.0% per

year. However, this total figure disguises the rapid growth of

natural flavours. In fact, natural flavours now account for

more than 40% of the total flavours market with natural

flavours in food and drink in Western Europe currently

worth 563m.

market analysis


Flavours DATAFILEMarket value Western Europe 2010

1.3bnGrowth rate value Western Europe 2005 to 2010

+3.0% CAGRVolume usage Western Europe 2010

61,704 tonnes

Key categories

soft drinks, yogurt & desserts,

confectionery, meat & savoury

products

Flavours market value, Western Europe 2010

1.3bn2005 : 1.1 billion

Synthetic

flavours

717m

Natural

flavours

563m

Flavours forecast usage trend,Western Europe 2005 to 2015 (tonnes)

2005 2010 2015f

36,34634,952 34,236

22,578

26,752

31,236

Natural flavours Synthetic flavours

flavours

natural

synthetic &

nature identical
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Unsurprisingly, natural flavours are driving growth as

manufacturers respond to retailer pressures and

reformulate their products to promote natural ingredients.

Natural flavours are generally more costly than synthetic

flavours and this, combined with rising raw material costs,is having the effect of increasing values faster than

volumes. Natural flavours are widely used in food and drink,

particularly in products such as soft drinks, yogurt and

desserts and meat & savoury products, and these are the

largest markets for natural flavours in Western Europe.

This switch to natural flavours is widely reported, although

perhaps surprisingly, demand for synthetic flavours has

only just begun to decline. In fact synthetic flavours grew by

1.6% per year in value terms between 2005 and 2010 -

although this is mainly due to rising raw material costs -

with volume usage actually dipping from 36,436 tonnes in

2005 to 34,952 tonnes in 2010.

Natural flavours

Usage of natural flavours in food and drink in WesternEurope currently stands at 26,752 tonnes, having grown

from 22,578 tonnes in 2005. Unsurprisingly, soft drinks is

the largest user of flavours by volume, as soft drinks

manufacturers seek to replace synthetic flavours with

natural alternatives, where technologically possible.

Yogurt and desserts and meat & savoury products are also

significant users of natural flavours.

market analysis


Natural flavours market value, WesternEurope 2005 to 2015

563m+5.2% CAGR 2005 to 2010

2005 2010 2015f

678m

563m

438m

Natural flavours usage by food and drinkcategory, Western Europe 2010

26,752 tonnes2005 : 22,578 tonnes

14,397

2,7733,027

7,576Soft drinks

Yogurt & desserts

Meat & savoury

Other food & drink
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Synthetic and nature identical flavours

While there is slight growth in value for synthetic and

nature-identical flavours, volumes are slowly beginning to

decline, down from 36,346 tonnes in 2005 to 34,952 tonnesin 2010. A more rapid decline has only been delayed

because most natural colours do not generally withstand

processing and shelf-life as well as synthetics. Also, there

are often no suitable natural alternatives. In other words, as

technology is able to improve the general quality,

consistency and stability of naturals, a corresponding, more

rapid decline might be seen in the use of synthetics.

However, we do not yet see a day when the use ofsynthetics will be completely eradicated.

Soft drinks still accounts for the largest share of the

synthetic flavours market in Western Europe, followed by

confectionery and yogurt & desserts.

Outlook

The trend towards more natural flavours has had the effect

of increasing values faster than base market growth and

this is set to continue.

Also, as consumers seek new and exciting taste

experiences, growth is seen where more combinations of

flavours, or stronger flavours, are being used. Salty snacks

are a good example of the recent trend towards stronger

flavours. Some soft drinks, too, have been developed with

stronger, multiple flavours.

market analysis


Synthetic flavours market value, WesternEurope 2005 to 2015

717m+1.6% CAGR 2005 to 2010

2005 2010 2015f

735m

717m

663m

Synthetic flavours usage by food and drinkcategory, Western Europe 2010

34,952 tonnes2005 : 36,346 tonnes

15,321

3,167

4,332

12,132Soft drinks

Confectionery

Yogurt & desserts

Other food & drink
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So, while demand for natural flavours in Western Europe is

set to grow, this growth is starting to slow to around 3.8%

per year. Although significant, this figure is lower than that

of the previous five years. Meanwhile, while the volume of

synthetic flavours used is set to decline, values are stillpredicted to grow, if only slightly, over the next five years.

Although growing interest in natural ingredients and the

desire for clean labels are driving the flavours market, the

questions of stability and sustainability still remain

unanswered. Will technology ever be able to facilitate the

use of naturals in all applications? Will limitations of costs

and supply become a critical issue as the population

expands. And what will the impact of EFSAs 2015

regulations be?

market analysis


FlavoursThe global market for natural and synthetic flavours in food and

drink. Includes global outlook plus detailed analysis of 20

countries including volume and value market insight and

forecasts to 2015 .

For more information visit our report store
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Seasonings, herbs and

spices

Growing awareness of health benefits of herbs and

spices

Rapid growth in raw material costs

Rising demand for natural ingredients

Rising material costs, the drive for clean-label and growing

awareness of the health benefits of herbs and spices have

led to the market for industrial, seasonings, herbs and

spices in food and drink growing rapidly at rate of 5.1% per

year. Currently worth 1,310m, this market is one of the

largest food ingredient markets by value in Western Europe.

market analysis


Seasonings DATAFILEMarket value Western Europe 2010

1.3bnGrowth rate value Western Europe 2005 to 2010


318,979 tonnes

Key categories

meat & savoury products,

ready meals, snacks

Seasonings, herbs and spices market value,Western Europe 2005 to 2015

1,310m+5.1% CAGR 2005 to 2010

2005 2010 2015f

1,435m

1,310m

1,023m

Seasonings, herbs and spices forecast usagetrend, Western Europe 2005 to 2015 (tonnes)

2005 2010 2015f

296,573

318,979

355,226

Seasonings, herbs and spices

Seasoningsherbs & spices
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Meat and savoury products, ready meals and snacks are

the largest markets in volume terms. Together these

product categories account for over 70% of total volume

usage of industrial seasonings, herbs and spices in food

and drink products in Western Europe.

However, as consumers seek new taste experiences and

expect natural health benefits from their food and

beverages, demand is rapidly growing for spices in new

product categories, such as breakfast cereals and bars and

soft drinks, and this trend is expected to continue.

Outlook

These factors will help drive the total demand for industrial

seasonings, herbs and spices in Western Europe, with

usage forecast to grow by a significant 35,000 tonnes (up

from 318,979 tonnes in 2010) to reach 355,226 tonnes by

2015, with the market achieving a predicted value of

1,435m.

market analysis


Seasonings, herbs and spices usage by foodand drink category, Western Europe 2010

318,979 tonnes2005 : 296,573 tonnes

90,049

42,42362,785

123,722

Meat & savoury

Ready meals

Snacks

Other food & drink

SeasoningsThe global market for industrial

seasonings, herbs and spices in food

and drink. Includes global outlook

plus detailed analysis of 20 countries

including volume and value market

analysis and forecasts to 2015 .

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Colours

Colours is the fastest growing food ingredient

market

Much of the increase in value has been due to rising

prices but also to the increase in use of naturals

Colouring foodstuffs now starting to take significant

share from natural colours

Synthetics beginning to decline

The colours market has become complex and

contradictory. The drive to natural colour has been replaced

by colour from natural sources, or no added colour at all.

Added to this is the complexity of global food and drink

manufacturers with differing formulations depending on

market analysis


Colours DATAFILEMarket value Western Europe 2010

860mGrowth rate value Western Europe 2005 to 2010


25,460 tonnes

Key categories

soft drinks, meat & savoury

products, yogurts & desserts,

alcoholic drinks

Colours market value, Western Europe 2010

860m2005 : 543m Synthetic

colours

117m

Colouring

foodstuffs

192m

Natural

colours

551m

Colours forecast usage trend, WesternEurope 2005 to 2015 (tonnes)

2005 2010 2015f

4,000 3,808 3,589

5,023

6,740

9,105

13,309

14,911

16,966

Natural Colouring foodstuffs Synthetic

colours

natural

synthetic

colouringfoodstuffs


15/66

where products are produced and sold. There is also an

expectation of natural colour in certain Western European

countries, whereas this is virtually a non-issue in other

countries around the world.

One thing still holds true, however: the colour of the food

we eat is critical to its consumer appeal. But how the

industry delivers this colour, together with satisfying

consumers expectation of colour, has changed and

continues to change.

Therefore, the clearly overriding trend is this shift to natural

colours. But even now natural colours are being replaced

by colouring foodstuffs and, where possible, no added

colour at all. This makes the market complex and difficult to

measure.

For this market analysis we have measured synthetic

colours, natural colours and colouring foodstuffs, but for

clarity excluded caramel. This is due to caramel being used

in large volumes but with relatively low values.

Total Western European demand for all food and drink

colourings now stands at 860m, making it one of the most

important and fastest growing food ingredient markets.

Natural colours are worth 551m and account for almost

two thirds of the market, followed by colouring foodstuffs at

192m (which is growing rapidly) and the now relatively

small synthetic colours market, worth 117m, which is

beginning to decline.

market analysis


Natural colours market value, WesternEurope 2005 to 2015

551m+11.0% CAGR 2005 to 2010

2005 2010 2015f

630m

551m

327m

Natural colours usage by food and drinkcategory, Western Europe 2010

14,911 tonnes2005 : 13,309 tonnes

8,528

1,513

2,266

2,605Soft drinks

Meat & savoury

Alcoholic drinks

Other food & drink


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Natural colours

As with many areas of ingredient usage, the ability to use

the term natural is almost a given in some markets. While

the stability of naturals in certain environments can belimited, usage of naturally-derived colours dominates the

sectors where natural extracts can provide good

colouration (such as yellow and orange). Manufacturers of

colours and producers of food and drink are continually

working to overcome stability issues to widen the scope for

colours from natural sources.

Natural colours comprise extracts and concentrates of

specific plants (and animals), such as beta-carotene,

annatto, anthocyanins, carmine and chlorophyll. Usage

rates are generally in the region of 0.02% to 0.08% of

finished product weight.

Usage of natural colours in food and drink in Western

Europe now stands at 14,911 tonnes, having grown by

almost 1,000 tonnes since 2005. More impressive is the

value growth in this market: worth just

327m in 2005,natural colour usage in food and drink in Western Europe is

now worth 551m, having grown rapidly at rate of 11.0%

per year between 2005 and 2010. Even taking rising prices

into consideration, this growth is noteworthy.

While the outlook for natural colours remains significant,

this growth is starting to slow as natural colours are being

market analysis


Colouring foodstuffs market value, WesternEurope 2005 to 2015

192m+11.4% CAGR 2005 to 2010

2005 2010 2015f

297m

192m

112m

Colouring foodstuffs usage by food anddrink category, Western Europe 2010

6,740 tonnes2005 : 5,023 tonnes

2,068

949 1,195

2,528

Soft drinks

Pasta, rice, noodles

Yogurt & desserts

Other food & drink


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replaced with colouring foodstuffs, which are now taking an

increasing share of the market.

Colouring foodstuffs

By their very nature, the use of such products can be

difficult to determine. This category also covers a wide

range of products from very simple (and inexpensive) carrot

and spinach powders to more expensive spices (paprika,

turmeric), red cabbage, beet and spirulina. Usage rates vary

widely and can be as high as 5% of the finished product

weight.

Stability tends to be the main problem in use for naturalsand colouring foodstuffs, although encapsulation and other

technologies can help to improve intensity and shelf-life.

The market for colouring foodstuffs in Western Europe is

currently worth 192m, having grown rapidly from just

112m in 2005. Soft drinks, pasta, rice & noodle products

and yogurts & desserts are the largest markets for colouring

foodstuffs by product category.

Synthetic and nature-identical

This category comprises mainly of azo and lake dyes but

also includes NI manufactured products, especially NI beta-

carotene. Usage rates tend to be low, between 0.005% and

0.02% of finished product weight.

market analysis


Synthetic colours market value, WesternEurope 2005 to 2015

117m+2.4% CAGR 2005 to 2010

2005 2010 2015f

113m

117m

104m

Synthetic colours usage by food and drinkcategory, Western Europe 2010

3,808 tonnes2005 : 4,000 tonnes

1,848

380

436

1,144Soft drinks

Pet food

Confectionery

Other food & drink


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Although the synthetic flavours market grew in value

between 2005 and 2010, this was mainly due to rising raw

material costs. In fact, usage of synthetic colours in

Western Europe has been declining slowly in volume terms

since 2005 from 4,000 tonnes in 2005 to 3,808 tonnes by2010. This trend is set to continue due to retailer pressure

and consumer demands as food and drink manufacturers

seek to replace synthetic colours with natural alternatives.

Technological advancements in natural colours will only

accelerate this trend. However, if prices of naturals rise too

far, this may simply force more manufacturers to take the

colouring foodstuffs route, where possible.

Outlook

With colours it will be a long time before there is a perfect

end game of all food and drink colourings from natural

sources. Issues of stability as well as sustainability may still

see synthetic colours have a significant role to play for

many years.

However, the trend is towards naturals and colouringfoodstuffs with the natural colours market forecast to be

worth 630m by 2015 and colouring foodstuffs 297m. In

fact, it is forecast that demand for natural colours will be

overtaken by colouring foodstuffs as colouring foodstuffs

take an increasing share of the total colours market.

market analysis



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Hydrocolloids

Largest ingredient market by volume

Steady growth forecast

The value of the hydrocolloids market has declined slightly

in recent years, from 811m in 2005 to 792m in 2010.

However, this apparent drop is due to the development of

sourcing (from global markets) and the rising strength of the

Euro against the US Dollar. Meanwhile, volumes have been

steadily growing up from 505,201 tonnes in 2005 to

518,828 tonnes by 2010.

Values are forecast to pick up over the next five years, with

the market for hydrocolloids in food and drink in Western

Europe forecast to grow at a rate of 1.1% per year to be

worth 836m by 2015. This is due to the market favouring

slightly better-performing products.

market analysis


HydrocolloidsDATAFILE

Market value Western Europe 2010


-0.5% CAGRVolume usage Western Europe 2010

518,828 tonnes

Key categories

yogurts & desserts,

soups & bouillon, meat & savoury,

cakes & pastries

Hydrocolloids market value, Western Europe2005 to 2015

792m-0.5% CAGR2005 to 2010

2005 2010 2015f

836m

792m

811m

Hydrocolloids forecast volume usage,Western Europe 2005 to 2015

2005 2010 2015f

505,201

518,828

542,899

Hydrocolloids

hydrocolloids


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Hydrocolloids are used across a variety of food and drink

product categories, including many processed foods such

as yogurts & desserts, soups & bouillon, meat & savoury

products, cakes & pastries, pet food & beverages.

Hydrocolloids are part of an important group of functional

food ingredients and are mainly responsible for increasing

viscosity. However, their functions can also include

stabilising, improving and controlling texture (mouth-feel),

prevention of syneresis, moisture retention, foam formation,

binding and/or suspending particulates, or to replace fat.

Most hydrocolloids used by the food industry are starch

derived, although gums also play an important role. While

they may often be chemically modified, most are derived

from natural sources. However, there have been issues with

the use of xanthan and some gums. This could become a

bigger issue in the future and, as with colours and flavours,

there may be a drive to use native starches from known

sources.

Often, combinations or blends of more than one thickener

may be used in a product for a variety of technical reasons.

Many hydrocolloids are also interchangeable and usage

could be significantly influenced by prevailing prices. It

must also be remembered that the total usage of starches

and thickeners is much larger than that quoted here as they

are often used in non-food products.

market analysis


Hydrocolloids NEW!The global market for hydrocolloids in food and drink. Includes

global outlook plus detailed analysis of 20 countries including

volume and value market analysis and forecasts to 2015 .

COMING SOON! Watch out for more details on our report

store

Hydrocolloids usage by food and drinkcategory, Western Europe 2010

518,828 tonnes2005 : 505,201 tonnes

241,394

58,44359,059

79,687

80,244Yogurt & desserts

Soups & bouillon

Meat & savoury

Cakes & pastriesOther food & drink
http://www.rts-resource.com/Reports_Store/http://www.rts-resource.com/Reports_Store/http://www.rts-resource.com/Reports_Store/http://www.rts-resource.com/Reports_Store/http://www.rts-resource.com/Reports_Store/http://www.rts-resource.com/http://www.rts-resource.com/


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Most thickeners are plant derived (with the notable

exception of gelatine) and can therefore be considered

natural although, as mentioned previously, there has been

some controversy around this issue.

Outlook

Forecast growth for hydrocolloids is steady, if not

spectacular, with volumes predicted to grow from 518,828

tonnes in 2010 to 542,899 tonnes by 2015. Values are

expect to recover slightly during this period, rising to

836m by 2015.

market analysis



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Sweeteners Food products driving demand

Intense sweeteners outperformed by bulk

sweeteners

Demand for low calorie foods other than soft drinks is

driving increased use of sweeteners, with advances in

technology opening up new opportunities. For this analysis

the sweeteners market has been divided into intense

sweeteners (predominantly used in soft drinks, including

products such as Splenda) and now Stevia and Neotame.

Bulk sweeteners (excluding sucrose, fructose and dextrose)

are used mainly in confectionery.

market analysis


SweetenersDATAFILEMarket value Western Europe 2010



183,508 tonnes

Key categories

confectionery, soft drinks,

alcoholic drinks

Sweeteners value, Western Europe 2010

257m2005 : 235m

Bulk

sweeteners

129m

Intense

sweeteners

129m

Sweeteners forecast usage trend, WesternEurope 2005 to 2015 (tonnes)

2005 2010 2015f

136,289

174,503

211,113

7,999 9,005 9,656

Intense sweeteners Bulk sweeteners

sweeteners

intensesweeteners

bulksweeteners


23/66

Total demand for sweeteners in Western Europe now

stands at 183,508 tonnes, with bulk sweeteners accounting

for the majority at 174,503 tonnes and intense sweeteners,

which are used in much lower volumes, accounting for the

remaining 9,005 tonnes. While the usage of bulksweeteners has been growing at rate of 5.1% per year in

volume and 4.2% in value, growth in intense sweeteners

value has stalled due to the market reaching a point of near

saturation and the recent strength of the Euro against the

US Dollar.

Demand for sweetness

Total demand for sugar (sucrose) is more than 144m tonnes

globally, worth $40bn, increasing at more than 2% per year.

Food use is 135m tonnes. However, usage of intense and

bulk sweeteners (as defined) are growing at a faster rate

and therefore taking a larger share of total global

sweeteners.

Sweeteners are used in a wide variety of non-food

applications including animal feed, pharmaceuticals andoral hygiene products. Approximately one-third of all

sorbitol production is used to manufacture Vitamin C. A

greater proportion of bulk sweeteners is used in non-food

compared to intense sweeteners. However, an estimated

8,000 tonnes of intense sweeteners are used as table-top

sweeteners, which are outside the scope of this report.

Intense sweeteners

The market for intense sweeteners in Western Europe is

currently worth 129m and amounts to 9,005 tonnes, the

majority of which are used in soft drinks. Today, with the

spread of multinational drink manufacturers and increasing

affluence across major markets, increases can be seen in

the use of more sophisticated sweetener blends.

At the same time, as the demand for all types of low calorie

foods is increasing, we can see the spread of usage of

intense sweeteners into other categories such as

market analysis



24/66

confectionery, snacks, bakery and cereals. Here the

challenge remains to achieve indulgence without the

calories, while maintaining the quality of the original

product.

Consolidation in the sweetener industry has been strong,

with a relatively few companies controlling the majority of

global sales. Most of the major intense sweeteners are now

produced in Asia. While saccharine has now become highly

commoditised and prices have fallen, there are several

innovations taking place in new sweeteners. Following the

success of Sucralose (Splenda), other developments

include Stevia (PureCircle), Lo Han Guo, Neotame

(neohesperidine, used mostly in confectionery in Europe

and the USA) and Alitame (not approved in Europe).

Intense sweeteners are produced mostly by major

chemical, pharmaceutical and food additive manufacturers,

such as Ajinomoto, Nikken, Daesang and Pfizer.

The demand for better quality (more sucrose-like) and safe/

natural intense sweeteners continues, particularly in Europe

as well as in the United States and Japan. The

development of blends is increasing as these can offer

better economy, synergistic sweetening affects and

improved performance.

However, the scope for developing new 'winners' in this

market appears to be decreasing as development costs

may become prohibitive given the current market potential.

market analysis


Intense sweeteners market value, WesternEurope 2005 to 2015

129m-0.2% CAGR 2005 to 2010

2005 2010 2015f

141m

129m130m

Intense sweeteners usage by food and drinkcategory, Western Europe 2010

9,005 tonnes2005 : 7,999 tonnes

1,240

982

6,783

Soft drinks

Alcoholic drinks

Other food & drink


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The most likely source of sweeteners for the future will

probably be natural extracts.

The rate of growth may be slowing, but much potential

undoubtedly remains in this market. The signs are that mostof the sugar replacement that can take place has already

occurred in more mature markets including Europe.

Opportunities will continue at a slower pace in new

sectors. It is in these still-developing sectors, such as

confectionery, snacks and bakery, where blends are

required in order to replace bulk as well as sweetness.

Bulk sweeteners

The market for bulk sweeteners in Western Europe is

currently worth 129m. Total volume usage stands at

174,503 tonnes with confectionery (including gum)

accounting for over 86% of use.

Bulk sweeteners can impart a pleasant cooling flavour, they

mix well with confectionery flavours (especially mint) and

are non-cariogenic. Gradually their use is spreading to

many other diverse food sectors such as cereal bars,

snacks and meals. Polyols are increasingly used to replace

all calories, not just sugar derived. As the slimming and diet

market is so strong, particularly in Western Europe, bulk

sweeteners should continue to find new uses in a variety of

foods with the proviso that sweetness, texture and

functionality can all be maintained.

market analysis


Bulk sweeteners market value, WesternEurope 2005 to 2015

129m+4.2% CAGR 2005 to 2010

2005 2010 2015f

157m

129m

105m

Bulk sweeteners usage by food and drinkcategory, Western Europe 2010

174,503 tonnes2005 : 136,289 tonnes

23,092

151,410

Confectionery

Other food & drink


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Bulk sweeteners have been traditionally associated with the

major starch companies, such as ADM, Cerestar (Cargill),

Amylum and Staley (Tate & Lyle), Hayashibara and Danisco.

However, an increasing number of Asian (and South

American) plants now manufacture xylitol and sorbitol.Many of these plants are owned, or part-owned, by

European and US organisations. However, when

sweeteners such as these become commoditised, the

former companies are developing new products and blends

in order to maintain market leadership and values.

Outlook

The role of sweeteners is expanding beyond just a sugar

substitute, as they can also provide economy and flavour

modification (cooling and freshness). As such, the future

potential for sweeteners remains positive, covering a wide

variety of foods and organoleptic attributes.

Sweeteners are destined to play a greater role in the foods

we eat although demand will focus increasingly on:

combining quality with economy

safety

new sources/developments

production efficiency

market analysis


SweetenersThe global market for intense and bulk sweeteners in food anddrink. Includes global outlook plus detailed analysis of 20 countries

including volume and value market analysis and forecasts to 2015 .

http://www.rts-resource.com/Reports_Store/http://www.rts-resource.com/Reports_Store/http://www.rts-resource.com/Reports_Store/


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quality (as a substitute for sugar sweetness)

calorie reduction

naturalness (sourced from nature)

In many instances, the use of flavour masks will continue

to be needed in order to subdue some of the more

unpleasant characteristics of intense sweeteners. Overall,

the expected level of growth will be much greater than for

the market as a whole as more prepared foods and drinks

are manufactured commercially and as the desire for calorie

reduction and sugar substitution continues to grow across

the globe. There is some evidence of a slowdown in growthin markets of current high usage but overall growth

potential is positive.

For the future, the winners will be the suppliers of

sweeteners who can keep pace with these increasingly

sophisticated and changing demands. This may also

encourage more market-focussed suppliers to move further

up the value chain or to develop more sophisticated blends.

As well as using several sweeteners in synergy these could

also incorporate flavour masking to minimise unwanted

effects, such as the bitterness of intense sweeteners.

The use of new technology will be needed to help improve

flavour profiles and expand usage to new areas of food

and drink. In Europe, the weight-control sector will become

increasingly important to the further development of

sweetener usage.

Although much of the available market growth in Europe

has already taken place, overall growth should continue for

many years to come. The advantages of sweeteners - non-

cariogenic and, in the case of intense sweeteners, virtually

non-caloric - will continue to be appreciated by consumers

in a wide variety of food and drink.

Most governments in Europe are actively promotingreductions in calorie intake to their increasingly obese

market analysis



28/66

populations. The use of sweeteners in food and drink will

be a key part of this strategy.

With growing pressure in certain countries to openly publish

calorie contents of food consumed in restaurants andoutside the home in general, we could see increasing use of

sweeteners in foodservice recipe dishes, together with the

retail sector.

market analysis



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Fat replacers

Major technological challenge for the food industry

Market potential under threat from natural foods

To undertake this analysis, RTS calculates the market in

terms of fat replaced. On this basis, fat replacers are

predominantly used in low fat spreads. The total Western

European market has grown from 211m in 2005 and is

now worth 241m.

The issue of fat substitution has become one of the major

technological challenges for the food industry. There are

already many products available that claim either reduced

or low fat contents. More recently, claims such as 95% fat-

free have been used to give more advertising impact.

market analysis


Fat ReplacersDATAFILE

Market value Western Europe 2010



234,070 tonnes

Key categories

butter & yellow fats,

meat & savoury products,

biscuits/cookies, cakes & pastries

Fat replacers market value, Western Europe2005 to 2015

241m+2.6% CAGR 2005 to 2010

2005 2010 2015f

283m

241m

211m

Fat replacers forecast volume usage,Western Europe 2005 to 2015

2005 2010 2015f

196,090

234,070

271,658

fat replacers


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The certainties surrounding this market are twofold: first,

the demand for fat substitutes is growing strongly; and

secondly, fat is being substituted with a wide variety of

materials at varying levels of usage.

As we have stated previously, the challenge for analysis of

this type is to find a self-consistent method of measuring a

market comprising many different materials and usage

levels, where very little information exists. Therefore, we

have measured the market in terms of the volume of fat

replaced, based on extensive analysis of each product in

each country surveyed. This has resulted in a self-

consistent measurement of the potential for fat

replacement.

Whether the forecasts of potential are realised or not will

depend on a variety of factors, not least the ability of the

technologist to replace fat to, or near, the quality of the

original product without dietary side-effects or perceived

risk to health.

The growth of the low-fat spreads market is one example of

how emulsifier, starch and dairy technologies have helped

reduce fat levels in foods. The first margarines to be

produced were often made with 80% fat to give the taste

and texture of butter. However, there has been a significant

move towards low-fat spreads containing around 40% fat,

and more recently very-low-fat spreads with even lower fat

content.

market analysis


+3.3% CAGR

forecast growth inmarket value of

fat replacersWestern Europe 2010 to 2015

Fat replacers usage by food and drinkcategory, Western Europe 2010

234,070 tonnes2005 : 196,090 tonnes

25,57711,644

15,50918,438

162,902

Butter & yellow fats

Meat & savoury

Biscuits/cookies

Cakes & pastriesOther food & drink


31/66

Such developments have been made possible through the

use of dairy proteins, emulsifiers and stabilisers such as

gelatin. As well as their use in low-fat spreads these

ingredients have helped reduce fat levels in ice cream,

mayonnaise, flour confectionery and many other foodproducts.

The following list comprises some of the fat replacers and

substitutes that have been developed. The only group that

has been shown to lead to a consistent loss in body weight

as a result of their use to replace fat, without the apparent

need to compensate in terms of added intake of calories

and fat, are those based on lipids. Several notable products

have failed and others are still seeking approval.

modified glucose polymers (polydextrose)

modified tapioca, corn, potato, and rice starches

gums and algins (xanthan gum, guar gum, carageenans)

cellulose derivatives

micro-particulated proteins

synthetic/lipid based materials (fatty acid esters of

sugars and sugar alcohols

sucrose polyester (polyglycerol esters)

However, the successful replacement of fat is not a simple

issue. For example, one apparent finding of interest is thatlow fat diets are relatively unsuccessful in managing long-

term excess weight. The implication is that the overweight

person also desires more taste, odour, and texture in food.

Therefore, the low levels of flavour delivery associated with

most low fat diets may simply bring with them a desire for

more. This suggests that the overweight person might be

satisfied with less volume of food as long as the desire for

taste and odour are satisfied. Nevertheless, fat substitutionremains an important part of the healthy ingredients sector.

market analysis



32/66

In the future, its success may be halted by continued

increased in healthy balance foods. These are products

formulated to be nutritionally balanced and naturally low in

fat. An analysis of recent product launches shows how

companies are responding to demand for more naturalprepared food alternatives and away from fat substitution,

which may be perceived as somewhat unnatural by

consumers. Examples include M&S (UK) Simply Fuller

Longer range, Waitrose (UK) Love Life and Fluery Michon

Cuisine Bien-Etre

Outlook

In the future the market for fat replacers in Western Europe

has the potential to grow at a rate of 3.3% per year in value

to reach 283m although this does depend on the factors

outlined above.

This may seem a rather disappointing forecast for a sector

that was once growing much more strongly. As we have

said, the main limiting factors are:

1. the ability (or not) of fat-replacers to successfully replace

fat in additional food sectors;

2. the added need to be able to deliver expected levels of

taste, odour and mouth-feel;

3. the development of competitive products, mainly based

on normal food with balanced nutrition.

market analysis

http://www.rts-resource.com/http://www.rts-resource.com/http://www.fleurymichon.fr/nos-produits/par-categories/traiteur/gamme/020116-cuisine-bien-etre.htmlhttp://www.fleurymichon.fr/nos-produits/par-categories/traiteur/gamme/020116-cuisine-bien-etre.htmlhttp://www.waitrose.com/home/inspiration/waitrose_lovelife/about_love_life.htmlhttp://www.waitrose.com/home/inspiration/waitrose_lovelife/about_love_life.htmlhttp://health.marksandspencer.com/our-health-ranges/simply-fuller-longerhttp://health.marksandspencer.com/our-health-ranges/simply-fuller-longerhttp://health.marksandspencer.com/our-health-ranges/simply-fuller-longerhttp://health.marksandspencer.com/our-health-ranges/simply-fuller-longer


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Fat-soluble: A, D, E, K.

Water-soluble: B1, B2, B5, B6, B12, nicotinic acid, C, biotin,

folic acid

Minerals are essential micronutrients that combine with

other elements in order to regulate a variety of biochemical

reactions inside the body. They can be found in enzymes,

hormones, bones and muscles and, as such, form essential

parts of the body's structure. As for vitamins, minerals

cannot be synthesised in the body - they must be ingested

but can be found in nearly all foods. There are about sixty

different minerals that make up about four percent of the

body and, of these, the following 15 are probably the most

familiar:

Calcium

Phosphorus

Magnesium

Chromium

Copper

Fluoride Iodine

Iron

Manganese

Molybdenum

Selenium

Zinc

Chloride

Potassium

Sodium

Vitamins and minerals in food & beverage

Vitamins and their connection to health were discovered in

the early twentieth century when scientist Dr William

Fletcher was researching the causes of Beriberi. However, it

wasn't until 1912 that Polish scientist Cashmir Funk namedthose special nutrients vitamines after vita meaning life

market analysis



35/66

and amine from the vitamin thiamine. Later on the word was

shortened to vitamin.

Although there have been examples of foods being fortified

since Roman times, most enrichment and/or fortification offood and drink began in earnest during the 1920s, 1930s

and 1940s. Originally, enrichment was used to replace vital

elements lost in processing whilst fortification was used

where there was identified a particular deficiency within the

population in general or where ersatz products (margarine)

were developed as replacement foods (butter). In the case

of orange juice, vitamin C was added so that levels could

be standardised as seasonality and processing led to

variations. More recently, a more arbitrary use of

fortification has been used as a method to promote the

sales of food and drink, especially those served to children.

One particular factor for the success of fortification has

been consumer understanding. Consumers have had a

relatively clear idea of the vital roles that vitamins and

minerals play in the diet. This, in turn, has meant that

manufacturers have not needed to spend time educatingtheir customers but have simply relied on claims such as:

contains vitamin C or a good source of calcium to deliver

a positive message.

However, it is doubtful whether most consumers have a

detailed understanding of the part specific vitamins and

minerals play in the diet. While most will have heard of

vitamin A, only a small minority will understand the part that

market analysis


Vitamins in food and drink market value,Western Europe 2005 to 2015

79m-0.4% CAGR 2005 to 2010

2005 2010 2015f

98m

79m80m

Vitamins in food and drink usage by category,Western Europe 2010

11,203 tonnes2005 : 9,375 tonnes

1,681

2,3257,197

Soft drinks

Bread & morning goods

Other food & drink


36/66

this vitamin plays in the formation and growth of human

tissue, bones and skin and that it may even help in the

prevention of cancer. For minerals it is probably a similar

story. Iron and calcium are good for building strength and

bones, perhaps, but what are the benefits of magnesiumand potassium?

Maximum levels

There are very few issues in the food and drink sector

without controversy and the addition of vitamins and

minerals is no exception. Countries such as Denmark,

where manufacturers must apply for approval and products

must contain added vitamins and minerals only within set

levels, have already expressed concerns that the addition

of vitamins and minerals might lead to excessive

consumption in some individuals, thereby causing possible

organ damage, for example.

Interestingly, although it has been known for some time that

excessive intake of certain vitamins and minerals can be

potentially harmful, there are currently no maximum levelsset for vitamins and minerals in food. According to EHPM,

The Food Supplement Directive 2002/46/EC was adopted

on 10 June 2002 to establish specific rules on vitamins and

minerals used in food supplements and harmonised rules

for labelling. The aim is to ensure that consumers are

provided with safe and appropriately labelled products

across the EU. The European Commission has indicated

that it does not intend to restrict vitamin and mineral levels

market analysis


Minerals in food and drink market value,Western Europe 2005 to 2015

60m+2.2% CAGR 2005 to 2010

2005 2010 2015f

72m

60m

54m

Minerals in food and drink usage by category,Western Europe 2010

6,526 tonnes2005 : 5,468 tonnes

1,337

787

1,045 1,264

2,093

Pet foods

Breakfast

Bread & morning goods

Soft drinksOther food & drink


37/66

where there is no safety concern, and is expected to offer a

proposal for maximum levels based on safe upper levels. A

range of vitamin and mineral substances used in food

supplements and currently marketed in EU member states

are undergoing a scientific safety evaluation. The EuropeanCommission has advised that there is no intention to

regulate ingredients other than vitamins and minerals at this

stage.

In addition to the establishment of upper limits, there is also

the view that minimum levels need to be agreed for fortified

foods in order to ensure that any claims are viable, and also

that nutrient profiling may help prevent consumers from

being misled about the health benefits of functional

ingredients when added to certain food products.

Usages

Many vitamins are used in animal feed (largest sector of

use) supplements, medicine and personal care products, all

of which are outside the scope of this report. After animal

feed, the next highest sector of usage, accounting foraround 35% of total value, is supplements. Food and drink

accounts for around 21% of value usage, with health and

beauty, the fastest growing sector at 6%.

The global market for all vitamins was worth around $2.5bn

in 2010, and growth is currently being driven by non-food

uses such as cosmetics (especially vitamin E) and

pharmaceuticals and supplements, where vitamin D is

performing well.

In the food sector, growth in consumer interest in sports

nutrition and keeping healthy are contributing to increased

usage but overall growth rates are low, especially in

established markets.

In the recent past, vitamin production took place mainly in

the West, where only a few chemical-based companies

dominated the market. Today, a significant part of global

demand is manufactured in China and India.

market analysis



38/66

Europe remains a considerable user of all vitamins

consumed globally, while demand in Asia-Pacific is growing

faster.

Food & drink

Use of vitamins in food and drink in Western Europe now

totals 11,203 tonnes and is worth 79m. Within food and

drink, the juice and soft drinks sectors are by far the highest

use of most vitamins overall. Of course, not all of the usage

of vitamins is fortification, as some of the use of ascorbic

acid (vitamin C) is as an antioxidant.

The highest segments of use after soft drinks are bakedgoods and cereals, yellow fats and pet food which is,

perhaps unsurprisingly, a much larger market than baby

food.

The use of minerals is more difficult to determine. We

calculate that the usage of minerals in food and drink

products in Western European totals around 6,526 tonnes,

at a value of 60m.

Prospects

The prospects for the use of vitamins and minerals in food

and drink still look promising, with growth remaining just

above those for food and drink consumption as a whole.

The role of vitamins and minerals to provide antioxidants,

improve heart health and reduce the risk of osteoporosis is

well established and will be used in more food and drinkproduct developments in the future as consumer interest in

maintaining good health continu

Documents

Natural and Health Ingredients