New research has highlighted the threat to European Phytonutrients producers of cheap imports from Asia.
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Generally, owing to increased competition and improved extraction techniques, prices in this market are in a declining trend. Now however Asian producers are selling below cost in an effort to gain European market share.
The study, conducted by Frost & Sullivan, looks at the five most common phytonutrients – Vitamin E, Carotenoids, Flavonoids, Isoflavones and Phytosterols and forecasts that total market, worth US$585m today, will grow at a compound annual growth rate of 4.2% to reach US$780m 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 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 explains: “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.”
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By GlobalDataThe report recommends that phytonutrient manufacturers must improve production costs and raw material supply and realise savings through economies of scale when the volumes allow, or by further improving production techniques.
