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the future for natural and health ingredients

Western Europe / edition 1

299

update 19-01-2012

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the future for natural and health ingredients


Published by RTS Resource The Creative Industries Centre, Wolverhampton Science Park, Glaisher Drive Wolverhampton, WV10 9TG, United Kingdom Tel : +44 1902 422282 Fax :+44 1902 461844 e-mail : research@rts-resource.com www.rts-resource.com Registered in England No. 04676945 Copyright RTS Resource Ltd 2011 The contents of this publication are copyright, and reproduction, in whole or in part, is not permitted without the written consent of the publisher. Whilst every possible care is taken in compiling, preparing and issuing the information contained within this report, RTS Resource Ltd accepts no liability whatsoever in connection with it.

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contents

Contents
i

insight
Opportunities for ingredients Growth markets Trends adding value New product development

1 Flavours 2 3 4 5 6 7 8 Seasonings, Herbs and Spices Colours Hydrocolloids Sweeteners Fat Replacers Vitamins and Minerals The Future for Ingredients

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insight opportunities for ingredients

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 afuent, 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 ination and rising raw material costs. Although this total gure 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 protability and growth.

Each food manufacturer is looking for the competitive edge and ingredients are key to making this happen
Steve Rice, Managing Director, RTS

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insight growth markets

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 avours, colours and sweeteners. In particular, our forecasts show signicant growth opportunities for natural avours, colouring foodstuffs and fat replacers. Meanwhile the less dynamic, but nonetheless signicant markets for hydrocolloids, synthetic avours and industrial seasonings will still deliver signicant sales value. Over the next ve years cost pressures, limited product life cycles and sustainability are all critical factors for the food ingredients industry.

Natural avours, colouring foodstuffs and fat replacers are key growth markets
Jamie Rice, Global Insight Director, RTS

Ingredients in food and drink


Western Europe, market value 2010

1.3bn

1.3bn 0.9bn 0.8bn 0.3bn 0.2bn

0.1bn

Seasonings

Flavours

Colours

Hydrocolloids Sweeteners Fat replacers Vitamins & minerals


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insight trends

Trends adding value


Everyone seems to be talking about trends in the food industry: consumer trends, market trends and avour 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 benets of your products - both to manufacturers and consumers. Knowing which trends 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 signicance of trends for the food and ingredients industry. Our research has identied the following key SuperTrends: Health and Wellbeing Experiences Local:Global Flavour Trends

For future success, understand how trends interact and how to make them work for you
Miranda Dickinson, Trend Analyst, RTS

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.
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insight new product development

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 avours and growing consumer desire for authentic products and recipes.

New product trends reinforce the need for ingredient suppliers to be ahead of the game
Kate Hand, Research Analyst, RTS

Taste experiences
Brand Heston from Waitrose Product Ice Cream Flavours Chocolate and Rosemary Mustard; Salted Caramel Popcorn Savoury ice cream. Serve with chilled soups, cold meats, smoked sh, hot or cold ham and tomato salads

Naturally healthy
Brand Fleury Michon Product 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 kafr lime appealing to consumers who are seeking new and intense avour experiences.

Authenticity
Brands Yutaka, Ajinomoto, Asahi and Mizkan (imported by Tazaki Foods) Products Tazaki Foods imports authentic Japanese brands.

Provenance
Brand Lays Product Crisps Flavours Japanese Teriyaki

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market analysis flavours

natural synthetic & nature identical

Flavours 1.3bn

DATAFILE

Market value Western Europe 2010

flavours
Flavours
Rapid growth in natural avours Synthetic avours still account for more than half of the total avours market Soft drinks is the largest user of natural and synthetic avours The market for avours 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 gure disguises the rapid growth of natural avours. In fact, natural avours now account for more than 40% of the total avours market with natural avours in food and drink in Western Europe currently worth 563m.

Growth rate value Western Europe 2005 to 2010

+3.0%

CAGR

Volume usage Western Europe 2010

61,704 tonnes
Key categories

soft drinks, yogurt & desserts, confectionery, meat & savoury products

1.3bn
2005 : 1.1 billion

Flavours market value, Western Europe 2010

Flavours forecast usage trend, Western Europe 2005 to 2015 (tonnes) 36,346

34,952

34,236 31,236

Synthetic avours 717m

Natural avours 563m

26,752 22,578

2005 2010 Natural avours

2015f Synthetic avours

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market analysis flavours

Unsurprisingly, natural avours are driving growth as manufacturers respond to retailer pressures and reformulate their products to promote natural ingredients. Natural avours are generally more costly than synthetic avours and this, combined with rising raw material costs, is having the effect of increasing values faster than volumes. Natural avours 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 avours in Western Europe. This switch to natural avours is widely reported, although perhaps surprisingly, demand for synthetic avours has only just begun to decline. In fact synthetic avours 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 avours Usage of natural avours in food and drink in Western Europe currently stands at 26,752 tonnes, having grown from 22,578 tonnes in 2005. Unsurprisingly, soft drinks is the largest user of avours by volume, as soft drinks manufacturers seek to replace synthetic avours with natural alternatives, where technologically possible. Yogurt and desserts and meat & savoury products are also signicant users of natural avours.

Natural avours market value, Western Europe 2005 to 2015

563m

Natural avours usage by food and drink category, Western Europe 2010

678m

+5.2% CAGR 2005 to 2010 563m

26,752 tonnes
2005 : 22,578 tonnes Soft drinks Yogurt & desserts Meat & savoury Other food & drink 14,397

7,576 3,027 2,773

438m

2005 2010 2015f

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market analysis flavours

Synthetic and nature identical avours While there is slight growth in value for synthetic and nature-identical avours, volumes are slowly beginning to decline, down from 36,346 tonnes in 2005 to 34,952 tonnes in 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 of synthetics will be completely eradicated. Soft drinks still accounts for the largest share of the synthetic avours market in Western Europe, followed by confectionery and yogurt & desserts. Outlook The trend towards more natural avours 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 avours, or stronger avours, are being used. Salty snacks are a good example of the recent trend towards stronger avours. Some soft drinks, too, have been developed with stronger, multiple avours.
Synthetic avours market value, Western Europe 2005 to 2015 735m Synthetic avours usage by food and drink category, Western Europe 2010

717m

717m

+1.6% CAGR 2005 to 2010 663m

34,952 tonnes
2005 : 36,346 tonnes Soft drinks Confectionery Yogurt & desserts Other food & drink 15,321

12,132 4,332

2005 2010 2015f

3,167

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market analysis flavours

So, while demand for natural avours in Western Europe is set to grow, this growth is starting to slow to around 3.8% per year. Although signicant, this gure is lower than that of the previous ve years. Meanwhile, while the volume of synthetic avours used is set to decline, values are still predicted to grow, if only slightly, over the next ve years. Although growing interest in natural ingredients and the desire for clean labels are driving the avours 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?

Flavours
The 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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market analysis seasonings, herbs & spices

Seasonings
Market value Western Europe 2010

DATAFILE

Seasonings
herbs & spices Seasonings, herbs and spices
Growing awareness of health benets 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 benets 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.

1.3bn
Growth rate value Western Europe 2005 to 2010

+5.1%

CAGR

Volume usage Western Europe 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

Seasonings, herbs and spices forecast usage trend, Western Europe 2005 to 2015 (tonnes) 355,226 318,979 296,573

1,435m 1,310m

+5.1% CAGR 2005 to 2010

1,023m 2005 2010 2015f 2005 2010 2015f Seasonings, herbs and spices

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market analysis seasonings, herbs & spices

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 benets 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 signicant 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.

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

318,979 tonnes
2005 : 296,573 tonnes Meat & savoury Ready meals Snacks Other food & drink 90,049

Seasonings
The 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 . For more information visit our report store

123,722

42,423 62,785

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market analysis colours

natural
synthetic

Colours 860m

DATAFILE

Market value Western Europe 2010

colouring foodstuffs Colours

colours

Growth rate value Western Europe 2005 to 2010

+9.6%

CAGR

Volume usage Western Europe 2010

25,460 tonnes
Key categories

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 signicant 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

soft drinks, meat & savoury products, yogurts & desserts, alcoholic drinks

860m
2005 : 543m

Colours market value, Western Europe 2010

Colours forecast usage trend, Western Europe 2005 to 2015 (tonnes) 16,966 14,911 13,309

Synthetic colours 117m

9,105 Colouring foodstuffs 192m 6,740 Natural colours 551m 5,023 4,000 3,808 3,589 2015f Synthetic

2005 Natural

2010 Colouring foodstuffs

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market analysis colours

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 difcult 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.

Natural colours market value, Western Europe 2005 to 2015

551m

Natural colours usage by food and drink category, Western Europe 2010

630m

+11.0% CAGR 2005 to 2010 551m

14,911 tonnes
2005 : 13,309 tonnes Soft drinks Meat & savoury Alcoholic drinks Other food & drink 8,528

2,605 2,266 1,513

327m 2005 2010 2015f

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market analysis colours

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 be limited, 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 specic 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 nished 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 signicant, this growth is starting to slow as natural colours are being

Colouring foodstuffs market value, Western Europe 2005 to 2015 297m

192m

Colouring foodstuffs usage by food and drink category, Western Europe 2010

+11.4% CAGR 2005 to 2010


192m

6,740 tonnes
2005 : 5,023 tonnes Soft drinks Pasta, rice, noodles Yogurt & desserts Other food & drink 2,068

2,528

112m 2005 2010 2015f

949

1,195

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market analysis colours

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 difcult 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 nished product weight. Stability tends to be the main problem in use for naturals and 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 betacarotene. Usage rates tend to be low, between 0.005% and 0.02% of nished product weight.

Synthetic colours market value, Western Europe 2005 to 2015

117m

Synthetic colours usage by food and drink category, Western Europe 2010

117m 113m

+2.4% CAGR 2005 to 2010

3,808 tonnes
2005 : 4,000 tonnes Soft drinks Pet food Confectionery Other food & drink 1,848

1,144 436 380

104m

2005 2010 2015f

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market analysis colours

Although the synthetic avours 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 by 2010. 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 signicant role to play for many years. However, the trend is towards naturals and colouring foodstuffs 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.

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market analysis hydrocolloids

Hydrocolloids
DATAFILE Market value Western Europe 2010

hydrocolloids
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 ve 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.
Hydrocolloids market value, Western Europe 2005 to 2015

792m
Growth rate value Western Europe 2005 to 2010

-0.5%

CAGR

Volume usage Western Europe 2010

518,828 tonnes
Key categories

yogurts & desserts, soups & bouillon, meat & savoury, cakes & pastries

792m
-0.5% CAGR
2005 to 2010

Hydrocolloids forecast volume usage, Western Europe 2005 to 2015 542,899

836m 811m 792m 518,828 505,201

2005 2010 2015f

2005

2010 Hydrocolloids

2015f

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market analysis hydrocolloids

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 modied, 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 avours, 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 signicantly inuenced 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.

Hydrocolloids usage by food and drink category, Western Europe 2010

518,828 tonnes
2005 : 505,201 tonnes Yogurt & desserts Soups & bouillon Meat & savoury Cakes & pastries Other food & drink 80,244 241,394 79,687

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

59,059 58,443

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market analysis hydrocolloids

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.

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market analysis sweeteners

intense sweeteners

Sweeteners
Market value Western Europe 2010

DATAFILE

bulk sweeteners

257m
Growth rate value Western Europe 2005 to 2010

sweeteners
Sweeteners
Food products driving demand Intense sweeteners outperformed by bulk sweeteners

+1.9%

CAGR

Volume usage Western Europe 2010

183,508 tonnes
Key categories

confectionery, soft drinks, alcoholic drinks

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.

257m
2005 : 235m

Sweeteners value, Western Europe 2010

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

211,113 174,503 136,289 Bulk Intense sweeteners sweeteners 129m 129m

7,999

9,005

9,656 2015f Bulk sweeteners

2005 2010 Intense sweeteners

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market analysis sweeteners

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 bulk sweeteners 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 dened) 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 and oral 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 afuence 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

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market analysis sweeteners

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 Pzer. 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.

Intense sweeteners market value, Western Europe 2005 to 2015

129m

Intense sweeteners usage by food and drink category, Western Europe 2010

141m 130m 129m

-0.2% CAGR 2005 to 2010

9,005 tonnes
2005 : 7,999 tonnes Soft drinks Alcoholic drinks Other food & drink 1,240 982

6,783

2005 2010 2015f

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market analysis sweeteners

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 most of 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 avour, they mix well with confectionery avours (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 nd new uses in a variety of foods with the proviso that sweetness, texture and functionality can all be maintained.

Bulk sweeteners market value, Western Europe 2005 to 2015

129m

Bulk sweeteners usage by food and drink category, Western Europe 2010

157m

+4.2% CAGR 2005 to 2010 129m

174,503 tonnes
2005 : 136,289 tonnes 23,092 Confectionery Other food & drink

105m 2005 2010 2015f

151,410

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market analysis sweeteners

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 avour modication (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 efciency

Sweeteners
The global market for intense and bulk sweeteners in food and drink. Includes global outlook plus detailed analysis of 20 countries including volume and value market analysis and forecasts to 2015 . For more information visit our report store

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market analysis sweeteners

quality (as a substitute for sugar sweetness) calorie reduction naturalness (sourced from nature) In many instances, the use of avour 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 growth in 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 avour masking to minimise unwanted effects, such as the bitterness of intense sweeteners. The use of new technology will be needed to help improve avour proles 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 - noncariogenic 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 promoting reductions in calorie intake to their increasingly obese

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market analysis sweeteners

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 and outside the home in general, we could see increasing use of sweeteners in foodservice recipe dishes, together with the retail sector.

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market analysis fat replacers

Fat Replacers
DATAFILE Market value Western Europe 2010

241m

fat replacers
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% fatfree have been used to give more advertising impact.

Growth rate value Western Europe 2005 to 2010

+2.6%

CAGR

Volume usage Western Europe 2010

234,070 tonnes
Key categories

butter & yellow fats, meat & savoury products, biscuits/cookies, cakes & pastries

Fat replacers market value, Western Europe 2005 to 2015

241m

Fat replacers forecast volume usage, Western Europe 2005 to 2015 271,658 234,070

283m

+2.6% CAGR 2005 to 2010


241m 196,090 211m

2005 2010 2015f

2005

2010

2015f

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market analysis fat replacers

The certainties surrounding this market are twofold: rst, 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 nd 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 selfconsistent 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 emulsier, starch and dairy technologies have helped reduce fat levels in foods. The rst margarines to be produced were often made with 80% fat to give the taste and texture of butter. However, there has been a signicant move towards low-fat spreads containing around 40% fat, and more recently very-low-fat spreads with even lower fat content.

+3.3%
Western Europe 2010 to 2015

Fat replacers usage by food and drink category, Western Europe 2010

CAGR

234,070 tonnes
2005 : 196,090 tonnes Butter & yellow fats Meat & savoury Biscuits/cookies Cakes & pastries Other food & drink 25,577 11,644 15,509 18,438 162,902

forecast growth in market value of fat replacers

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market analysis fat replacers

Such developments have been made possible through the use of dairy proteins, emulsiers 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, our confectionery and many other food products. 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. modied glucose polymers (polydextrose) modied 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 nding of interest is that low fat diets are relatively unsuccessful in managing longterm excess weight. The implication is that the overweight person also desires more taste, odour, and texture in food. Therefore, the low levels of avour delivery associated with most low fat diets may simply bring with them a desire for more. This suggests that the overweight person might be satised with less volume of food as long as the desire for taste and odour are satised. Nevertheless, fat substitution remains an important part of the healthy ingredients sector.

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market analysis fat replacers

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 natural prepared 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.

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market analysis vitamins & minerals

vitamins minerals
Vitamins and minerals
Vitamins mainly used in soft drinks Minerals added to pet foods and breakfast cereals and bars Vitamins are organic compounds that are essential in small amounts to the life and health of humans and animals. Vitamins, by denition, cannot be synthesised in the body so they must be consumed regularly as part of the diet. Some animals are able to synthesise their own requirements for some of these compounds, but monogastric animals need all the vitamins in their diet in natural or synthetic form (with acknowledgement to BASF). Vitamins can be classed into two types: fat-soluble and water-soluble.

Vitamins & Minerals 138m

DATAFILE

Market value Western Europe 2010

Growth rate value Western Europe 2005 to 2010

+0.8%

CAGR

Volume usage Western Europe 2010

17,730 tonnes
Key categories

soft drinks, bread & morning goods, pet foods, breakfast cereals & bars

Vitamins and minerals in food and drink market value, Western Europe 2010

138m
2005 : 134m

Vitamins and minerals forecast usage trend, Western Europe 2005 to 2015 (tonnes) 13,916 11,203 9,375

Minerals 60m

7,869 Vitamins 79m 6,526 5,468

2005

2010 Vitamins

2015f Minerals

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market analysis vitamins & minerals

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 named those special nutrients vitamines after vita meaning life

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market analysis vitamins & minerals

and amine from the vitamin thiamine. Later on the word was shortened to vitamin. Although there have been examples of foods being fortied since Roman times, most enrichment and/or fortication of food and drink began in earnest during the 1920s, 1930s and 1940s. Originally, enrichment was used to replace vital elements lost in processing whilst fortication was used where there was identied a particular deciency 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 fortication 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 fortication 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 educating their 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 specic vitamins and minerals play in the diet. While most will have heard of vitamin A, only a small minority will understand the part that

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

79m

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

98m

-0.4% CAGR 2005 to 2010

11,203 tonnes
2005 : 9,375 tonnes 1,681 Soft drinks Bread & morning goods 2,325 Other food & drink

80m

79m

7,197

2005 2010 2015f

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market analysis vitamins & minerals

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 benets of magnesium and 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 levels set for vitamins and minerals in food. According to EHPM, The Food Supplement Directive 2002/46/EC was adopted on 10 June 2002 to establish specic 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

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

60m

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

+2.2% CAGR 2005 to 2010

72m

6,526 tonnes
2005 : 5,468 tonnes

60m 54m

Pet foods 1,337 Breakfast 2,093 Bread & morning goods 787 Soft drinks 1,045 1,264 Other food & drink

2005 2010 2015f

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market analysis vitamins & minerals

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 scientic safety evaluation. The European Commission 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 fortied foods in order to ensure that any claims are viable, and also that nutrient proling may help prevent consumers from being misled about the health benets 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 for around 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 signicant part of global demand is manufactured in China and India.

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market analysis vitamins & minerals

Europe remains a considerable user of all vitamins consumed globally, while demand in Asia-Pacic 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 fortication, as some of the use of ascorbic acid (vitamin C) is as an antioxidant. The highest segments of use after soft drinks are baked goods and cereals, yellow fats and pet food which is, perhaps unsurprisingly, a much larger market than baby food. The use of minerals is more difcult 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 drink product developments in the future as consumer interest in maintaining good health continues to grow.

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outlook for ingredients

The future for ingredients natural avours


+4,484 tonnes
VOLUME OPPORTUNITY 2010 to 2015 2010 : 26,752 2015f : 31,236

natural colours
+2,055 tonnes
VOLUME OPPORTUNITY 2010 to 2015 2010 : 14,911 2015f : 16,966

678m +3.8% CAGR


FORECAST MARKET VALUE, 2015 2010 : 563m

630m +2.7% CAGR


FORECAST MARKET VALUE, 2015 2010 : 551m

colouring foodstuffs
+2,364 tonnes
VOLUME OPPORTUNITY 2010 to 2015 2010 : 6,740 2015f : 9,105

hydrocolloids
+24,070 tonnes
VOLUME OPPORTUNITY 2010 to 2015 2010 : 518,828 2015f : 542,899

297m +9.1% CAGR


FORECAST MARKET VALUE, 2015 2010 : 255m

836m +1.1% CAGR


FORECAST MARKET VALUE, 2015 2010 : 792m

intense sweeteners
+650 tonnes
VOLUME OPPORTUNITY 2010 to 2015 2010 : 9,005 2015f : 9,656

fat replacers
+37,588 tonnes
VOLUME OPPORTUNITY 2010 to 2015 2010 : 234,070 2015f : 271,658

141m +1.8% CAGR


FORECAST MARKET VALUE, 2015 2010 : 129m

283m +3.3% CAGR


FORECAST MARKET VALUE, 2015 2010 : 241m

vitamins in food & drink


+2,713 tonnes
VOLUME OPPORTUNITY 2010 to 2015 2010 : 11,203 2015f : 13,916

minerals in food & drink


+1,342 tonnes
VOLUME OPPORTUNITY 2010 to 2015 2010 : 6,526 2015f : 7,869

98m +4.4% CAGR


FORECAST MARKET VALUE, 2015 2010 : 79m

72m +3.7% CAGR


FORECAST MARKET VALUE, 2015 2010 : 60m

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definitions

Denitions
Notes Industrial food ingredients only. Usage via retail and foodservice channels excluded, except where in the form of an industriallymanufactured food product. All numbers rounded. ns = not signiant CAGR = calculated annual growth rate p = provisional f = forecast

Ingredient denitions
Many will note that we have named all the products analysed here under the term ingredients. Often the term additive is used for those normally added at low levels and ingredient used to denote those included at higher levels in the nished product. We merely use the term as a collective noun to denote the many products that are added to food in order to: Add or modify avour Add or modify colour Add or modify rheology Preserve/retard spoilage Fortify Reduce calories

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definitions

Our denitions of ingredients, as measured in this report, are as follows:

Flavours It is not always easy to dene what is a avour. There are many examples where one ingredient may be classied in several ways: e.g. some avours may give colour (caramel, spice extracts), whilst the avour of some products may simply derive from their ingredients (orange peel, tomato paste, bouillon) and so on. In order to measure the usage of avours in a selfconsistent way, we have calculated usages only where a avour is declared in the ingredients and where average usage rates are in the range 0.05% to 0.5% of sold product weight, depending on application. Flavours, as dened here, may be natural, natureidentical (NI) or synthetic. Synthetic avours have the advantages of usually imparting intense avours (so less is needed), being more stable to heat and to light and of lower cost of usage. Their disadvantage can be that they lack the roundness of NI and naturals (e.g. vanillin versus vanilla). As with many areas of ingredient usage, the ability to use the term natural has become of increasing importance and, where they have proved to be stable and consistent, the usage of naturally derived avours now dominates key sectors. The European description is generally that a avouring substance (or substances) is obtained, by physical, enzymatic or microbiological processes, from material of vegetable or animal origin which material is either raw or has been subjected to a process normally used in preparing food for human consumption and to no process other than one normally so used. Food avourings are regulated under EU Directive 88/388/ EEC. This sets out general rules for their use and establishes maximum permitted levels of certain
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definitions

biologically active principals (BAPs are natural toxicants that occur in many biological sources). According to EU agreed denitions there are three principal types of avourings used in foods: Natural avourings Flavouring substances obtained from plant or animal raw materials by physical, microbiological or enzymatic processes. These can be either used in their natural state or processed for human consumption, but cannot contain any natureidentical or articial avourings. Natureidentical avourings Flavouring substances that are obtained by synthesis or isolated through chemical processes, which are chemically identical to avouring substances naturally present in products intended for human consumption. They cannot contain any articial avouring substances. Articial avourings Flavouring substances not identied in a natural product intended for human consumption, whether or not the product is processed. From the above it may be perceived that one of the problems in measuring todays market is that certain products conforming to the natural category may not need to be declared onpack as avour. Examples of this would include caramel, spices and plant extracts which, although they impart avour, may simply be declared as spices or extracts. When measuring this market we usually rely on onpack declarations to guide our classication. If an ingredient panel lists spices or spice extract we would normally categorise this under our spices analysis and would not be included here.

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definitions

Seasonings, herbs & spices Mixtures and blends of herbs, spices and other ingredients, essential to the creation of types of cuisine, for example: Jalapeno, chipotle, cumin, oregano = Mexican Basil, oregano, marjoram, garlic = Mediterranean Lemon, soy, ginger, aniseed, fennel = Chinese Lemon grass, galangal, star anise, green peppercorns = Thai Coriander, capsicum, cardamom, cumin, fenugreek, turmeric, fennel, ginger = Indian In the case of seasonings other ingredients may be added, for example, salt, our, sugar, colour, hydrolysed protein, etc.

Major categories of usage: Sausages and savoury meats Snacks Ready meals Sauces

However, the range of products that t into this category, together with their usage rates, is wide. For example, a pizza seasoning might comprise two or three different herbs, added at a level of 1%2% by weight of the nished product. On the other extreme, a seasoning used to avour an extruded snack might comprise 10 or more ingredients and be added at a weighttoweight rate of 8% to 12%. Due to the wide variety of foods and tastes available, the denition of a seasoning has to be exible. For example,

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definitions

some food manufacturers prefer to use a complete seasoning package, some a spice blend while others prefer to blend their own ingredients. For a relatively simple meat product like a sausage, a complete seasoning package can include several herbs and spices, spice extract/oleoresin, colour, avour, functional protein, hydrolysed vegetable protein, our, salt, sugar, and even a preservative. For a similar purpose, a spice blend may just contain the herbs, spices and other avours, although a colour or functional protein may also be added. Other manufacturers prefer to procure their own raw materials and blend in-house. This analysis has attempted to include all these possible instances.

Colours A denition of colour additives is: A colour additive is any material that is a dye, pigment, or other substance made by a process of synthesis or similar, or extracted, isolated, or otherwise derived, with or without intermediate or nal change of identity, from a vegetable, animal, mineral, or other source and that, when added or applied to a food is capable (alone or through reaction with another substance) of imparting a colour. Few would dispute that colour is an essential characteristic of food and drink, both as a marketing tool and in order to meet consumer expectations. However, it is not always easy to dene what is a colour and there are many examples where one ingredient may be classied in several ways: e.g. some colouring agents may impart avour (caramel, spice extracts), whilst the colours of other products may simply derive from their ingredients (orange

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definitions

peel, raspberries, tea, cheese) and so on. In order to measure the usage of colours in a selfconsistent way, we have calculated usages only where a colour is declared in the ingredients and where average usage rates are in the range 0.01% to 0.05% of the nished product weight, depending on the application. Caramel is excluded from this analysis. Colours may be natural, natureidentical (NI) or synthetic. Synthetic colours have the advantages of usually imparting intense hues (so less is needed) and of being more stable to heat and to light than natural and natureidentical colours. Synthetic colours can better survive heat processes, such as canning and boiling. Colours are added to improve the appearance of food and drink when they would otherwise be colourless, e.g. boiled sweets, table jellies. They may be used to restore colour lost during processing or to assist consumer preconceptions of avour before eating. Although not covered here, caramel is by far the most widely used colour by volume and accounts for more than 80% of all colours used. Its main uses are in beverages and gravy/sauce mixes. However, usage rates are relatively high and, when measured in value, caramel constitutes only around 11% of the total European colours market and only 9% globally. Natural colourings are typically sourced from vegetable and, sometimes, animal sources (insects) and are already used in a wide variety of food and drink products. Examples include: annatto, turmeric, paprika, beet, carmine, cochineal. Natural concentrated extracts, such as those derived from vegetable sources, for example anthocyanins, turmeric or paprika, are included in the analysis along with nature identical, synthetic and lake dyes. In the data, synthetics and natureidentical are combined and compared with naturals (excluding colouring foodstuffs).

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definitions

There is also also increasing usage of natural plant materials, colouring foodstuffs, to impart colour. Although there are many applications in which these natural extracts cannot be used effectively (due mainly to lack of stability) this trend towards undeclared colours does threaten the future of more traditional colours, and this is taken into account in the analysis. As with many areas of ingredient usage, the ability to use the term natural has become increasingly important and, today, the usage of naturally derived colours dominates the hues where natural extracts can provide good colouration, such as yellow and orange, although the stability of naturals in certain environments can be limited. However, as we understand the situation, there is still no precise denition of the term natural in this context. We all may think we know what is natural and what is not but without specic legislation we can never be 100% certain. It is considered that the most important results of this analysis are the orders of magnitude of the relevant markets and their trends.

Hydrocolloids Thickeners are part of an important group of functional food ingredients known as hydrocolloids and are responsible for increasing viscosity. This capability can also have the additional effects of stabilising an emulsion, improving texture (mouth-feel), prevention of syneresis, moisture retention, foam formation, or binding-in/suspending, particulates. The usage of thickeners tends to be quite high in ingredient terms, often contributing between 2% and 5% of the weight of nished product. However, some specialist gums and cellulose compounds can be used at levels as low as 0.1% and still have a signicant effect on the nished product. Thickeners may be divided into eight groups:

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definitions

starches (mainly derived from maize or potatoes) modied starches gums (derived from plants and animals) gelatins (animal hides) celluloses (plant bre) alginates (seaweed) pectins (from fruit pulp) other (including caseinates, soya-based compounds and other proteins)

Usage of these materials is not straightforward. Often, combinations, or blends, of more than one thickener may be used in one product for a variety of technical reasons. Many products are also interchangeable and usage may be signicantly inuenced by prevailing prices. It is also important to remember that the total usage for starches and thickeners is much larger than that quoted here as they are often used in non-food products.

Fat replacers Although the importance of fat substitutes in food is well known, it is a difcult market to measure. The range of products used to substitute fat is wide and so are their usage levels. In order to measure the markets our analysis has been built rst on measuring the markets for food products claiming low- or reduced-fat contents and then to measure the market for fat substitutes based on the quantity and of fat replaced. Values are based on average values for hydrocolloids and others material used for fat substitution.

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definitions

Sweeteners There are just two basic categories of sweeteners: nutritive and non-nutritive (otherwise known as caloric and noncaloric or bulk and intense). Nutritive sweeteners provide calories or energy to the diet at about four calories per gram. Nutritive sweeteners include sugar sweeteners (for example, rened sugars, high fructose corn syrup, fructose, dextrose, corn sweeteners, honey, lactose, maltose, various syrups and invert sugars) and polyols or sugar alcohols (e.g., sorbitol, mannitol, xylitol and isomalt). Non-nutritive, or intense sweeteners (such as saccharin and aspartame) do in fact contain a signicant amount of energy but because usage levels in food and drink are so low (generally less than 0.1%) their caloric contribution to the diet is negligible. Polyols generally contribute slightly less sweetness than sugar (sucrose) on a weight-for-weight basis but, when consumed, are not totally absorbed by the intestines so much of their caloric value is simply passed out of the body. Sugar sweeteners Sucrose and fructose are the primary sugar sweeteners that occur naturally in the food supply or are added as sugars. These sweeteners add functional properties to foods through their effects on sensoric, physical (crystallisation, viscosity), microbial (preservation, fermentation), and chemical (caramelisation, antioxidation) properties. Sucrose is a disaccharide composed of glucose and fructose and provides 4 kilocalories per gram. Commercially, sucrose comes from processing sugar cane or sugar beets. Renement removes the yellow-brown pigments of unrened sugar to produce the white crystal form of table sugar. Molasses is the least rened form of sucrose.

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definitions

Fructose is a component of sucrose and is present in fruit (also known as fruit sugar or levulose), and is often added to foods and beverages as high fructose corn syrup (HFCS) or in the crystalline form. Fructose is manufactured through the isomerisation of dextrose in cornstarch. Although on a weight-for-weight basis fructose is much sweeter than sugar, HFCS is often adjusted to give the same effect as sucrose. Because of the way in which fructose is absorbed by the body, fructose intake may lead to a slower rise in blood glucose than sucrose-based sweeteners. For this reason, fructose is often used in diabetic products such as chocolate Polyols (sugar alcohols) Polyols can replace sugar sweeteners, usually on a one-toone or two-to-one basis whilst offering lower caloric intake and potential health benets such as reduced glycaemic response and reduced dental caries. The polyols sorbitol, mannitol, and xylitol are found in plant products such as fruits and berries. Commercially, these sweeteners are synthesised and not extracted from natural sources. All polyols are absorbed slowly and incompletely from the intestine. Therefore, an excessive load may cause diarrhoea. Because of their usually incomplete absorption, polyols produce a low glycaemic response.

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definitions

Vitamins and minerals Vitamins are organic compounds that are essential in small amounts to the life and health of humans and animals. Vitamins, by denition, cannot be synthesised in the body so they must be consumed regularly as part of the diet. Some animals are able to synthesise their own requirements for some of these compounds, but monogastric animals need all the vitamins in their diet in natural or synthetic form (with acknowledgement to BASF). Vitamins can be classed into two types: fat-soluble and water-soluble. 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.

Information for the ingredients market To plan for the future effectively requires a total view of the market, enabling comparisons to be made, and its likely developments. Therefore, this report is built upon the belief that there is a need amongst manufacturers of food and drink, retailers and suppliers of ingredients for a unique series of up-to-date reports that: uniquely quantify the global market for food and drink, by segment, by region and by main country

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definitions

uniquely quantify the global market for food and drink ingredients, by type, by segment, by region and by main country analyse trends in ingredients usage and identify the markets and trends that drive usage provide self-consistent details for each country, by food and drink sector provide a powerful overview of the global status and future of each market deal with the corporate implications of the above.

Most ingredients suppliers - and many manufacturers - now operate, or at least compete, on an international basis. Therefore it is considered to be essential to: be able to take a synoptic view of the total market and its interactions possess detailed information for each market segment, country, and main category of ingredient usage assess which trends will affect the markets and how these will develop.

This report has been designed to pin-point areas of growth, decline and opportunity and to facilitate the targeting of markets and key customer needs, both now and in the future.

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Objectives The key objectives of these reports are: to provide a unique, relevant view of the ingredients market, its areas of growth, decline and opportunity to break this down into each region, main country and ingredient category to enable international strategic, marketing and sales planning on a level and scale previously unavailable.

Our design strategy for these reports is: to provide a unique, quantitative, view of the market for food and drink ingredients from 2005 to 2015 to itemise all main segments of food and drink consumption, by country, and to make an analysis of the usage of ingredients, by type, for each category. Food and drink categories covered comprise the whole of the market categorised by 26 key segments comprising 140 sub-segments (see below) to cover food and drink markets as well as strategic and business development issues to report in detail on each ingredient segment (as dened) and further sub-divide categories where possible by using import/export statistics and trade estimates to use the latest available base data and to cover, in detail, the key markets in Western Europe to enhance the tables with relevant qualitative data regarding current and future trends and developments in food and ingredients to provide tables and commentary summarising the key trends and issues facing the food and drink market today and over the next ve years
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to be of benet to both food and drink manufacturers as well as suppliers of ingredients, their agents and representatives.

The reports are further enhanced by a section containing the key suppliers of each type of ingredient in each country/ region and a section on major users of ingredients, by main country.

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Methodology
Research For this report data, observations, forecasts and analyses have been based on the following: The RTS database, containing millions of pieces of data on food, drink and ingredients from around the world, built up over 20 years Primary research comprising personal/telephone interviews conducted with the relevant supply, manufacturing, retail and distribution industries. Condential interviews have been held at various levels from chief executives to managers of marketing and sales functions. Also included were technologists, importers, exporters and wholesalers and representatives of distributors, as well as trade associations and governmental agencies representing various facets of the industry Review and analysis of secondary sources (ofcial and unofcial) such as trade journals, databases, business libraries, publishers and distributors of trade literature, newspapers, on-line sources, publications of various trade associations and independent studies by both governmental and international agencies Review and analysis of statistics published by relevant companies, trade associations and national statistics ofces of the countries under review as well as those published by trade commissions, the European Union (EU), the United Nations (UN), the FAO and the Organisation for Economic Co-operation and Development (OECD) RTS own new product database, encompassing comprehensive new product launch data from around the world

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Information gained from visits to major international trade exhibitions and international store surveys has been used to support interviews and other data RTS' own computer-based market model capability.

Market model At the heart of the report is a unique pan-global spreadsheet and computer model of each market for food, drink and ingredients, built upon the consumption and production of food and drink in each country. The results focus upon both the base markets and on the usage of industrial ingredients. As food and drink for catering purposes is also included in the base statistics, the analyses include a break-down of ingredients used in all sectors that we have been able to identify. Consumption data has been categorised by the types of ingredients used for each food category in each country, for the years 2005 to 2010, with latest data and calculations for 2010. For example, the numerous statistical sources used give the total market sizes for each food and drink sector (see below); then, using technical and industry data, together with our own research, observations and analyses from the RTS new product database, it has been possible to determine the percentage of usage of each ingredient in each product. In this way, a highly detailed model of ingredients usage can be built up and double-checked against available ingredient statistics and supported by interviews with representatives from the industry. Therefore, unlike other ingredients reports, the usage of ingredients has been built and checked both bottom-up and topdown, giving an unprecedented degree of detailed information. The methods used to obtain this breakdown and to build the model include: observations and measurements taken in each country
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trade data and estimates ofcial production, consumption, import and export statistics database searches interviews industry and press reports.

The model has been built bottom-up, involving the detailed analysis of nearly 150 separate items of food and drink in each country analysed. The results of the model have then been double-checked top-down, using published and trade data, supported by interviews and checking with the industry, and the model rened as necessary until the information generated is considered to t with all available data. The result is a unique, self-consistent model, analysis and perspective of the global ingredients market broken down into key trend data for each country, food category and ingredient type. Having reported on and analysed the food and ingredients industry since 1987, RTS is aware that, in a work of this magnitude, there is always potential for discrepancy, disagreement and varying views. Indeed, many people we have spoken to during the course of this work often do not agree with each others views or data; even the available statistics can be at variance. What we have tried to bring to this sector is: more thorough research new levels of detail a tying-up of all the available ofcial data consistency.

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It is considered that one of the main values of the data contained herein is to enable suppliers and users of ingredients to make much more detailed analyses of the usages of ingredients, by segment and by region so that better decisions can be made regarding future business and product developments on both macro and micro levels.

Denitions and coverage


Countries covered Western Europe : Austria, Belgium (including Luxembourg), Denmark, Finland, France, Germany, Greece, Ireland, Italy, Netherlands, Portugal, Spain, Sweden, UK The food and drink market The market for food and drink has been broken down in accordance with categories generally recognised by the industry. Ultimately, categorisation is determined by the available statistics, which can and do vary from country to country. The number of food categories covered reects the size and complexity of the analysis made herein. Throughout this report every effort has been made to maintain consistency and uniformity and to comply with the following categorisations. However, in certain instances in order to attain completeness and consistency it has been necessary to make estimates.

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Product category Fruit & vegetables

Products analysed fresh fruit fresh vegetables fresh potatoes & other starchy root eggs canned/bottled fruits canned/bottled vegetables dried fruit pulses and beans frozen fruit frozen vegetables frozen potato products jams, jellies & spreads marmalade honey sugar other sweeteners beef and veal (bovine) pigmeat sheepmeat (mutton and goat) poultry edible offal

Carcase meats

Meat & savoury products fresh & cooked sausage semi-preserved sausage hamburgers pte canned meats ham and bacon value added poultry quiches, tartes, ans, pies pizzas and other savoury snacks sandwiches meat-free products Ready meals canned meals ambient meals frozen meals chilled meals dry meals

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Product category Fish & seafood

Products analysed whole sh sh llets sh esh/paste breaded and battered sh salted, smoked, dried sh processed sh (canned) other preserved sh crustacean molluscs crustacea products mollusc products wheat our rice pasta (dry, fresh, canned) noodles (dry & instant) bread morning goods sweet savoury coated crispbread cakes and pastries (fresh/ ambient) cakes and pastries (frozen) ready-to-eat breakfast cereals oat akes and hot cereals breakfast and other cereal bars whole milk semi-skimmed milk skimmed milk buttermilk milk drinks whole milk powder semi-skimmed milk powder skimmed milk powder buttermilk powder casein whey powder

Flour, pasta, rice

Bread & morning goods Biscuits/cookies

Cakes & pastries

Breakfast cereals, bars

Milk & milk drinks

Milk powders

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Product category Butter & yellow fats

Products analysed butter margarine yellow fat spreads hard semi-hard soft blue-veined fresh processed

Cheese

Cream & condensed milk cream (all types) condensed and evaporated milks Yogurt & desserts yogurt (plain and set) yogurt (stirred fruit) drinking yogurt junket, pap, vla chilled and cream desserts other milk desserts other fermented products dessert mixes ice cream ice cream snacks sorbet and water ices Chocolate confectionery plain tablets lled tablets and countlines pralines other chocolate sweets Sugar confectionery toffee, fudge and chews boiled sugar sweets jellies, gums and pastilles gum (including bubble gum) other, including medicated confectionery

Ice creams & frozen desserts Confectionery

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Product category Snacks

Products analysed potato crisps extruded snacks baked snacks nuts and similar pot snacks fresh & frozen soups canned soups cubes and packet soup instant soup bouillon & gravy mixes pasta & noodle sauces other cooking sauces sauces mixes (dry) ketchups & similar fermented & soy sauces other condiment sauces mayonnaise dressings condiment sauces, including mustard pickles cooking fats and oils infant formulae baby meals cereals/rusks baby drinks dog food (canned) dog food (dry) cat food (canned) cat food (dry) food for other pets pet treats teas, tisanes, matte coffee cocoa powder and similar other hot drinks

Soups & bouillon

Sauces & dressings

Baby foods

Pet foods

Hot beverages as sold

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Product category Juices, soft drinks & carbonated

Products analysed juices and nectars carbonated soft drinks concentrates mineral waters avoured (near) waters functional drinks rtd tea rtd coffee beer (all types) cider wines (still and sparkling) spirits avoured alcoholic beverages

Alcoholic drinks

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Notes on data and calculations


Data sources Due to the variations in data collection that still exist throughout the world, there are often larger numbers of data available for certain countries as opposed to others. For this reason, together with the fact that the larger markets are often those of most interest, a greater degree of detail is reported for the major markets of USA, China, Japan, France, Germany, Italy, Spain and the UK. For the smallest markets, where fewer data are available, a summary only is given. Generally, tables are given for all countries analysed, although the amount of detail and market commentary might vary. Smaller and emerging markets often necessitate the use of more estimated data. Most data refer to industrially-produced and/or supplied products although, throughout the world, there is still much artisan and retail level production of food and drink. In South America, Asia Pacic, Middle East, Eastern Europe, as well as in Italy, Greece and Portugal, there is a signicant quantity of food produced and sold locally. Such production is not included in ofcial statistics. Ofcial statistics issued by various countries may sometimes be inuenced by political considerations and therefore do not always agree with each other. Other distortions may be due to variations in data collection and product classication, which this report has attempted to rationalise. In each case, effort has been made to measure the total industrial market, which includes that produced for foodservice as well as retail.

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Apparent consumption Throughout the reports, consumption gures refer generally to apparent consumption as these are the only ofcial data available. They take no account of stock held in store at either the beginning or end of any particular year. Apparent consumption is arrived at by the following formula: production + imports - exports = apparent consumption

Market forecasting A market forecast is the future size of the market or market sector in volume or value, that is considered likely in the years covered. In most tables this is denoted by the letter f. The forecasts generated in this report are the result of computer-based predictions combined with detailed analysis by experienced analysts and forecasters. Such forecasts are also viewed against per person consumption trends and against the total food market, including relevant factors such as socio-economic, demographic and consumer trends. Generally, the latest published gures for a market are between one and two years old. These data can be updated by using manufacturers estimates and latest market and/or retailer reports. In the tables contained in this report estimates are generally denoted by the letter e. When dealing with the current year of this report (2010) data used often fall between a latest estimate (e) and a forecast (f). Therefore, we have used the sufx p to denote a provisional gure. It should also be noted that although these reports use the base years of 2005, 2010, and 2015, the data are derived from a wealth of historic records for every year ranging from 1985 up to 2010. The tonnage (volume) tables presented in this report usually refer to tonnes or to thousands of tonnes and are rounded
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accordingly. Often, these gures are derived from more accurate data. As percentage growth columns refer to the more accurate gures, they may not always appear to concur with the rounded tonnages. Total columns, also, may be slightly distorted for the same reasons. As a result, percentage growth and total gures are mathematically correct whilst tonnages have been rounded to the nearest one or one thousand tonnes and values to the nearest $0.1m. The base data are the latest available: historic data for 2005 2010 (latest gures and RTS updates) 2015 (forecast)

NOTE: The authors have been making these and similar analyses for over 25 years and their database holds analysed data stretching back to the mid 1980s.

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