We take a second look at the newly published Global Food Additives Market from Leatherhead Food Research, which indicates that shoppers are now seeking out unexpected ingredient combinations as well as flavours that deliver health benefits and tastes associated with the past.
The researchers note that the phrase 'no artificial flavours or colours' is now ubiquitous across processed food products worldwide, and the industry “is striving to find ever more efficient ways of producing flavourings which meet this requirement.”
As a result of recent EU regulatory changes, whereby the EU authorities set down minimal quantity levels regarding natural flavours, alternatives to synthetic flavours are likely to carry a higher cost, and Leatherhead expects this factor to remain a challenge for food and drinks makers in the years ahead.
The global market for flavourings used in food and beverages was worth an estimated $7.35bn in 2010. Market value increased by 3.5 per cent within the last year, and has risen by more than 15 per cent compared with 2006, said the analysts.
The soft drinks sector continues to represent a major category for flavourings. In the US, for example, the beverages sector accounts for around a quarter of total flavour usage by the food and drinks industry.
“Demand within the soft drinks industry has been sustained by the emergence of new sectors such as flavoured waters, flavoured dairy drinks, energy drinks and ready-to-drink (RTD) tea, which has compensated in many instances for static or decreasing consumption of carbonated soft drinks,” reports Leatherhead.
Flavour trends
Flavour combinations predicted to take hold over the 12 months include pickling spice and rice vinegar, fennel and peri peri sauce, and roasted curry powder and wild mushrooms.
“Some of the flavours currently in vogue include traditional fruits such as rhubarb and strawberry. This contrasts with ‘superfruit’ varieties such as goji berries, demand for which has not kept pace with initial expectations.
Botanical extracts such as lavender, rose and orange blossom have also performed well over the last few years, while the appeal of green tea continues to increase, aided by its health and ‘naturalness’ properties.
Spices such as ginger, pepper and chilli have also found increasing favour in sectors such as snacks and confectionery, while dual flavour profiles continue to feature strongly in many sectors,” finds the report.
Growth levels are forecast to remain highest within the savoury flavours sector, predict the UK based researchers. “Much of this will be driven by end-user sectors such as savoury snacks and ready meals, where demand for strong flavours is expected to remain strong,” they note.
The continued growth of the ethnic foods market is likely to drive customer demand for an ever wider range of flavours. “Regionality is becoming a key driver in many sectors of the ethnic foods market, thereby creating new challenges for manufacturers of flavourings,” finds Leatherhead.
In terms of developments in the sweet flavours sector, it seems likely that fruit-based varieties will continue to lead in categories such as confectionery and soft drinks, “largely on account of their links with naturalness and health.”
The analysts forecast that ever more exotic sweet flavours are likely to appear in these sectors, as consumer tastes become ever more adventurous and sophisticated. “However, not all are likely to become instantly successful, and it is worth noting that flavours based on traditional fruits continue to account for the bulk of sales,” they caution.
Consolidation
It seems likely that the current trend towards consolidation within the global food flavours market will continue, said the researchers.
Intensifying competition and pressure on prices continues to drive merger activity within the industry, as smaller players fail to achieve economies of scale and also lack the resources to make the sustained investment in R&D, which is an essential part of staying ahead in a changing marketplace.
In 2010, just four companies accounted for 71 per cent of the global flavours market, with the share taken by leader, Givaudan, amounting to almost a third (31 per cent).
Flavour enhancer trends
In terms of flavour enhancers, notes Leatherhead, consumer concerns over monosodium glutamate (MSG) and its supposed effects on health are expected to persist; a trend, note the researchers, which is likely to have an adverse affect upon demand and lead to the launch of more products marketed as being ‘MSG free.’
Partly as a result of this, consumption of MSG is likely to remain heavily skewed towards Asian and Far Eastern countries such as Japan, they forecast.
High demand for strongly-flavoured foods in sectors such as ready meals and savoury snacks (as well as Asian flavours) may aid future growth levels, adds the research team.
The continued growth of the ethnic foods sector, as well as consumer exposure to a wider range of flavours, is also likely to keep sales of flavours enhancers relatively high, finds Leatherhead.
The reported concluded that the natural trend is expected to drive sales of yeast extracts as flavour enhancers, whilst more research into alternative varieties is expected to dominate R&D here.