Further, increasing innovations in the industry are driving down the cost of production, incorporating additional benefits in the products, and resulting in launching of new types of products. This acts as an important driver for the industry.
However, numerous regulations and consumers’ food safety concerns act as hurdles in the growth of the market. A case in point is the recent row over MSG and lead content in Maggi noodles, which has led the Indian food and beverage industry to look at food ingredients closely.
Categories and manufacturers
Specialty food ingredients primarily comprise food colours, acidulants, food & beverage enzymes, specialty starches, food emulsifiers, food & beverage starter cultures, sugar substitutes, food preservatives, hydrocolloids, food flavours, and functional food ingredients / nutraceuticals.
Food ingredients per se include dried vegetables, dried fruit and edible nuts, essential oils and oleoresins, honey, herbs, natural colours and flavours, natural gums and resins, pulses, seeds, spices, sugars, vegetable oils and fats, vegetable saps and extracts. These are used in the production of a range of food and beverage products.
Globally, leading manufacturers of specialty food ingredients include Cargill (US), Chr. Hansen (Denmark), DuPont (US), Royal DSM (The Netherlands), McCormick (US), ABF, Danisco, Givaudan, and Tate & Lyle (UK) and Kerry Ingredients India.
Growth stimulators
Growing population and evolving consumer tastes are likely to give a thrust to growth of the food ingredients business in the coming years. Further, there are a range of contributing factors propelling the demand, which are disposable incomes, dual incomes, urbanisation, and health concerns. Consumers will continue to demand natural colours, flavours, and additives with the awareness on health issues linked to dietary habits.
According to Sujesh Govindan, director, R&D projects, process engineering and materials, Griffith Labs, the scene for food ingredients is positive primarily because regulations in India through FSSA are coming of age. India has an impressive food manufacturing base but the market opportunity for food ingredients needs to be tapped the way in the Western world.
Chetan Hanchate, CEO, Centre for Processed Foods, states, “A critical development on the special ingredients front is that only approved FSSA products can be used. Over the next three to five years, India would be major player in this space.”
He adds, “This is primarily driven by three factors: Firstly, it is the access to qualified food researchers. Second is the support from venture capitalists and private equity space. Third is Union government’s Make in India programme that could see several players enter the fray.”
Natural space
T S Gulati, chairman and managing director, Sonarome, said that the specialty food sector was expected to witness robust growth prospects. Particularly the flavour segment is currently registering growth anywhere between 10 and 15 per cent. There is a large presence of small and medium manufacturers in the space. There is a growing demand for natural flavours. This is where we are gearing up to consolidate our presence in the market as a leading flavours and seasoning blends’player offering a range to confectionery, bakery, beverage and savoury sectors for premium customers like Britannia, Haldiram’s and ITC Foods among others.
“India is at the beginning of a tremendous growth phase and we expect to see this high growth continue over the next five years. There is immense opportunity for various ingredient manufacturers. Food grade antioxidants are slated to grow at a rapid pace,” states a report by Frost & Sullivan.
Research capability
The primary strength of India in food ingredients market is its research capability. There is an increased focus on research and development which allows the Fi sector to comprehend and evolve innovative, quality flavours and fragrances rapidly in line with consumer taste.
Currently, going by the demand in the industry, emulsifiers, lactose and lactose syrup, molasses, seaweed extracts, pectin and starches, tapioca, sago, arrowroot starch, rosin products, chickpeas and broad & horse beans, kidney beans, onions, tomatoes, garlic, carrots and olives,vegetable saps and extracts, are showing good growth.
Leading companies in India include Camlin Fine Sciences Ltd, Griffith Labs, Vivimed Labs, Global Calcium India Pvt. Ltd, Kerry Flavours, Sonorome, Vishaal Natural Food Products, Hima Food Additives, and Dawn Foods & Flavours, to name a few.
Various applications
The global specialty food ingredients market has grown considerably in the last few years and is estimated to grow at a rapid pace in the near future. The application of specialty food ingredients is in bakery, confectionery, dairy, convenience foods, beverages, meat & seafood products and functional food products.
According to research reports, the demand for food and beverage industry with regards to food ingredient product development is focussed on superior quality, fine texture, pleasant flavour, extended shelf life, enhanced nutritional value and cost control.
The regulation in labelling of health claims is expected to be extremely demanding. Manufacturers will now need to indicate to consumers every proof of the contents verified by clinical trials only to convince that the products are of quality and safe for health. This according to Hanchate will see only quality and committed players surviving and succeeding.
Sugar-free and low salt variations
There is a huge demand for sugar-free and low salt variations in food products. Manufacturers in the coming years will see a clear cut demand for food ingredients used for different age-groups and diseases. This will create a new line of products, according to Gulati of Sonarome.
Flavouring agents will now need to adhere to a set of norms. “Therefore taste makers, beverages, diary products, bakery, savoury and convenience foods will need to abide by the new rules of the FSSA,” points out Hanchate of Centre for Processed Foods.
Global demand for gelatin which is a key gelling agent is expected to touch volume of around 396,000 metric tonne by 2017. Demand is driven by the world’s ageing population, and increasing awareness of health issues, and end-use industries including pharmaceuticals, nutraceuticals, and food and beverages. Demand in emerging markets such as India and China will also fuel expansion, along with rising standards of living and the availability of vegetarian gelatin options. Obstacles to industry growth include consumer concerns regarding the potential health threat in using products derived from animal body parts, according to some global industry analysts.
Emulsifiers industry
The worldwide emulsifier industry is expected to exceed a volume of 2.5 million metric tonne in 2017. Emulsifiers used in food and beverage products will now see consumers opting for natural emulsifiers. The market is also being driven by the trend of fat replacement in food products and product innovation, pointed out a report by Global Industry Analysts (GIA).
The global sugar and sweetener market is witnessing the addition of many sweeteners made from corns, such as high fructose corn syrup. Sugar still dominates the market followed by high fructose corn syrup and high-intensity sweeteners. High-intensity sweeteners hold strong market growth potential due to advantages over other traditional caloric sweeteners, noted a GIA report.
According to Boston Consulting Company, the worldwide yeast market is expected to reach almost $5 billion in 2015. This represents a $2 billion increase in six years for a yearly growth rate of almost 8%. Bakery yeast represents the leading market segment, worth $904 million in 2009, and is forecast to record yearly growth of 8% to reach $1.4 billion by 2015.
The health and wellness trends in food industry nowadays have not been easily cashable by manufacturers. Particularly during 2013-14, food regulatory issues were worldwide discussed as a continuous debate by food scientists, law experts, clinicians and industry representatives in conferences and food journals. The specialty food ingredients and additives, whether natural or nature-friendly or synthetic, in general are now likely to be examined for the health and nutrition claim making status. However the natural trend is likely to persist in food trade because consumers increasingly prefer to buy a ‘preservative free’ or ‘natural’ labelled food products, as per the BCC report.
Imminent trends
The current trend in the food ingredients space is demand for natural ingredients used in flavours and additives. There is also need for backing every ingredient used with scientific information on the labels.
Dominant challenges
The challenges are that there is a lack of understanding of the FSSA among the small and medium enterprises, according to Govindan of Griffith Labs.
As per Gulati of Sonarome, the recent Nestle crisis has created wave of apprehension among specialty food ingredient manufacturers. Further, the country’s food testing labs need advanced equipment. There is need to maintain data on the processes during manufacture and submit the same during audits. It is vital to ensure certificate of analysis and material safety data sheet (MSDS), residue of solvents, metals, sodium and sugar content. The government needs to ensure that extensive training of its inspectorate teams is ensured only to instill confidence in global food ingredient companies which are keen to set up production plants in India.
