IMR International has launched the eighteenth business development forum: Food Hydrocolloids 2014. Three key elements of success in hydrocolloids will underscore the theme of the conference; Sustainable, Green and Good.
Sustainability in all parts of the food supply chain has become one of the key requirements not only for basic ingredients but also for specialty additives such as hydrocolloids. Hydrocolloids are ideally suited to qualify as sustainable ingredients. All hydrocolloids are derived from sustainable sources with opportunities for continued expansion. This is not to say that raw material issues have not and will not continue to occur. Weather, politics, competing industries and socio-economic factors all play a role in the supply of raw materials for hydrocolloid production. Hydrocolloid supply is definitely sustainable but not necessarily stable.
Green aspects of hydrocolloids covers a range of elements including GMO free, organic and “natural” whatever that means to consumers. Carbon footprint, water consumption and other environmental factors are gaining significance EVEN for ingredients used at 1% or lower concentrations. Some buyers are even delving into issues such as ‘rain-water’ or ‘irrigation’ derived ingredients.
Good properties of hydrocolloids can be viewed from multiple angles. Benefits to the food processor include improved processes, reduced cost and longer term stability. Benefits to the consumer accrue through cost savings. More recently, however, the ‘good for you’ properties of hydrocolloids are gaining visibility. Differentiation between soluble and insoluble fibers and their respective benefits are entering consumer dialogue. Pectin, HPMC, resistant starches, modified guar, gum arabic and a few other hydrocolloids are all in the process of developing nutritional and nutraceutical awareness with consumers. An IMR concept of “Employment Factor” and “Social Good” will be featured at the conference. For example $X purchase of one hydrocolloid employs Y persons whereas another hydrocolloid may employ 50xY or even 100xY persons.
Open innovation has been and will continue to be explored. The open innovation trend has made easier the attraction of end-users of hydrocolloids to the conference. Purchasers are concluding that the old days of waiting for suppliers to knock at the door are passé. They must actively engage the supply side with challenges and future needs.
The hydrocolloid industry currently benefits from a relatively low level of consumer awareness, either positive or negative. Some hydrocolloids periodically suffer from unwarranted connotations publicized in the mass media. There is still, however, an opportunity for industry to be pro-active rather than re-active in the forming of perceptions and understanding of hydrocolloids. There is no doubt that companies are having to ‘move significantly and rapidly’ to address consumer as well as functional issues. For several years now, IMR has concluded each conference with the reminder that, “The perception of consumers IS the reality of producers”
The massive use of guar gum in hydraulic fracturing for oil or gas production, (Hydro-fracking) has had a major impact on guar. It has had a domino effect on other hydrocolloids which are suitable alternatives such as xanthan and CMC. Price fluctuations affect market value significantly and also cause major shifts from one hydrocolloid to another. The price and availability of many hydrocolloids is volatile, each for different reasons. Locust bean gum prices depend on the harvest and harboring of seed in Spain and Morocco. Alginate and pectin prices are in a state of flux due to issues of raw material availability. The guar gum situation is, however, a unique event which has never occurred for any other hydrocolloid in the 28 years that IMR has been monitoring this market. The future of guar in food is predicated by developments in the notorious process of hydraulic fracturing (Hydro-fracking) to produce oil and gas.
About 120-130 high level attendees are expected in Edinburgh next April to discuss “Where we are? Where we’re going? And how we get there?” The food hydrocolloid market is valued at US$7.0 – 7.5 billion depending on price levels. Pectin remains the most ‘label friendly’ hydrocolloid along with NATIVE starches. Others suffer a negative image for less than scientific reasons such as, “Starts with an X…” or “Difficult to pronounce…” or “Contains the word locust… or … arabic..” There is much work needed to address these perceptions or rather mis-perceptions. Several hydrocolloids are growing at a healthy 4-6% in volume. Price fluctuations mean that growth rates in value can vary significantly whereas volume growth is steadier. Starches and gelatin are the large volume hydrocolloids accounting for about 80% of total tonnage but only around 40% of total value. Not surprisingly, the smaller volume hydrocolloids such as MC/HPMC and MCC are growing at above average rates. In general, hydrocolloids offer good margins and clearly fall in the category of specialty ingredients. Efforts by some to commoditize and standardize the purchase of hydrocolloids are often foiled by their specialty nature. Novel properties are constantly being discovered which will assure the long term viability of hydrocolloids as specialty, value added food additives. Investment in this field by corporate giants such as, DuPont, Ashland, Cargill and Dow, to name but a few, attests to the long term interest and growth potential with which hydrocolloids are viewed.
Executives from key end-users of hydrocolloids including major, global food companies will be amongst the carefully selected range of speakers. The conference provides a neutral forum for suppliers and users of hydrocolloids to meet. Views on the strengths, weaknesses and future requirements of this industry will be exchanged. In 2014, the conference is being held in the beautiful city of Edinburgh, Scotland from April 27-29, 2013.
