According to a new report published by just-food, the additives market is set for continued growth in spite of increasing price pressure from ever more powerful global food producers, as well as consumer concerns over the health impact of additives and the growing demand for additive-free foods. Ben Cooper reports.


The additives market is set for further growth over the coming years, according to a new report from just-food, in spite of the impact the increasing purchasing power of multinational food groups has had on value sales in recent years.


According to the Global market review of food and drink additives – forecasts to 2012, the global additives market will have risen to US$33.3bn in value by 2012 from $25.3bn in 2007.


However, the pricing pressures that have offset some of the relatively strong growth seen in recent years will continue, the report states. Nevertheless, the report forecasts that value increases will be observed across all the additive sub-sectors – classified as flavours; hydrocolloids; flavour enhancers; fat replacers and emulsifiers; acidulants; artificial sweeteners; colours; enzymes; preservatives; antioxidants and others – over the coming five years.


The pressure created by the buying power of food-producing giants will mean that in the majority of additives sub-categories, volume sales growth will outpace value sales growth over the next five years, particularly in categories such as acidulants, sweeteners and nutraceuticals/functional ingredients.

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Multinational food groups are also expected to bring their increasing power to bear over additive suppliers in their demands for bespoke products. “Over the next five years, demand for application-specific ingredients and additives that are tailor-made to manufacturers’ orders will increase in line with the growing power of multinationals over their suppliers,” the report states.


The other key challenge facing additives specialists comes from the trend towards additive-free products, which, the report anticipates, will only gather pace over the coming five years. “The number of new product launches that are completely free from additives such as colourings and preservatives is forecast to rise to 2012,” the report concludes. “More and more brands will adopt a ‘100% natural’ and ‘additive-free’ brand strategy.”


However, the report also suggests that additive manufacturers will be able to respond to this trend by a combination of research and development and diversification into natural additive solutions. Indeed, this consumer trend potentially opens up new product areas for additive companies, but taking advantage of this will necessitate an increasingly proactive stance by additive producers. “Additives companies must no longer take the lead from the manufacturers but take the R&D reins and lead innovation by maintaining a close eye on emerging and current trends influencing purchasing decisions,” the report states.


Furthermore, food additive producers can potentially ease the pressure on their clients by marketing solutions which cater for increasingly health-conscious and additive-averse consumers. As the report points out: “New products entering the global food and drink market are keen to promote the fact that they are free from additives, such as preservatives, colourings and artificial flavourings.


“However, producing products without such additives can make the NPD process more costly and time-consuming, as producers search for more natural alternatives to ensure their product has a suitable shelf-life, taste, appearance and nutrient value.


“There are natural alternatives available on the market, however, and consumers are increasingly becoming aware that manufacturers do have a choice when it comes to using chemicals in their food and drink. The focus for additives manufacturers will be natural additives and health-promoting additives.”


Functional food, in particular, represents a profit opportunity for additive companies prepared to invest in research and development. “As consumers increasingly choose to purchase products that contain fewer or no additives, the industry must respond by developing alternative solutions for manufacturers that are cost-effective and efficient,” the report states. “This is not a minor challenge, but one that faces each and every company wishing to continue making a profit in the additives business. The rising popularity of functional foods represents a profit hotspot for additives companies prepared to diversify and invest in a relatively-new sector (compared to more established food categories such as bakery and cereals).”


The growing popularity of additive-free foods and general health concerns associated with additives such as sweeteners means that even in the mainstream food market, there will be greater scrutiny of the additives that are being used, and this will have implications for additive producers.


Over the next five years, the report goes on to say, additives will continue to be placed in the spotlight through the rising popularity of whole and natural foods, and a greater focus on provenance, processing and farming methods.


“Transparency will be key, and everyone who is active in the food and drink industry will be expected to be open and honest about the source, production process, formulation and content of products,” the report says. “In categories that promote a natural and healthy image, natural additives are regarded as crucial in preserving this ‘naturally-healthy’ image.”



For more information or to download this report, click here.