Food Ingredients

Food ingredients are categorized into food additives, preservatives, nutrients, pH control food colors, nutraceuticals, taste modifiers, sugar substitutes, cooking oils, and algae food ingredients among others. The demand for food ingredients is being driven by the growth of the food and beverages industry across the world. Food ingredients are added to food in order to enhance its flavor and taste. These are used for coloring, emulsification, preservation, and nutrition enhancement. They also help to enhance the shelf life, texture, and stability of processed food. Moreover, food ingredients are largely used in bakery, dairy, confectionery, meat & sea food, convenience food, and functional food.

Food ingredients are used to preserve, increase flavor, blend, color, thickness, and maintain nutrition. For instance, salt is used to preserve meats and fish, sugar to preserve fruits, vinegar solution or citric acid to preserve pickles, and herbs and spices to enhance flavor. Demand for natural food ingredients is increasing due to lower side effects and favorable regulations. Natural food ingredients are extracted from natural sources such as corn and soybean to maintain the consistency of food, from beet powder to provide color in food, and from ascorbic acid or vitamin C to increase the shelf life of pickles.

Synthetic food ingredients are used to increase the shelf life of food. For instance, ethanol is used to enhance the shelf life of wine. Also, butylated hydroxyanisole (BHA), benzoic acid and vitamin C are easily available synthetic food ingredients which restrict the bacterial growth and provide better shelf life.

Globalization has led to increasing trade activities in the food and beverages sector. There has been an increase in import and export of food items across the globe. To maintain the quality of food, the shelf life of food products has to be enhanced. Europe is the second largest market for food ingredients due to increasing demand for healthier alternatives to regular food.

OPPORTUNITIES

Increasing population and rapid urbanization owing to rising disposable income is expected to fuel growth of the market for food ingredients. Moreover, changing lifestyle and rapid adoption of convenience food is driving growth of the global food ingredients market. Also, the increasing health awareness and prevalence of food borne diseases is fueling demand for natural food ingredients. North America is expected to dominate the global food ingredients market due to rising number of women in the workforce, and inclination towards ready-to-eat food. However, the market in Asia Pacific is expected to witness significant growth due to an economic boom in China, India, and Japan which is propelling demand for convenience food. Moreover, rapid urbanization in Asia Pacific and influence of western culture is expected to favor growth of the food ingredients market in Asia Pacific.

The dairy industry is expected to witness the highest growth due to increasing demand for protein food across the world. Moreover, favorable government policies in various regions are expected to create a conducive environment for growth of the market. For instance, in 2017-2018 budget, the government of India announced plans to set up a dairy processing unit with an investment of US$ 1.2 billion. According to the India Brand Equity Foundation (IBEF), a trust established by the Department of Commerce, Ministry of Commerce and Industry, Government of India, the food industry in India is expected to reach US$ 65.4 billion by 2018. Also, in 2016, the food processing industry contributed 14% to India’s GDP. Moreover, the Association of Food Industries of China predicts that China would become the world’s largest consumer of food by 2018. Also, growing disposable income of the middle class Chinese households is expected to fuel demand for food ingredients in the country.

Market players are introducing new products in the market to meet the growing demand and to strengthen their product offerings. For instance, on April 27, 2017, DuPont Nutrition & Health introduced SUPRO XT55 Isolated Soy Protein to increase profitability of high protein beverages. Soy protein, is an alternative to dairy product in terms of protein supply. 

KEY CHALLENGES

Stringent government regulations and a lengthy approval process is likely to hamper growth of the market for food ingredients to some extent.

  • On April 01, 2016, the U.S. Food and Drug Administration stated that Gaur Gum is a natural substance which is obtained from maceration of the seed of the gaur plant, and is safe and can be used in specified limit.
  • June 20, 2016, The Government of India’s (GOI) Food Safety and Standards Authority of India (FSSAI) introduced new regulations for 11,000 food additives used in various food categories. The new list of food additives bans the use of potassium bromate and cyclamates in any food category.
  • On July 01, 2008, the government of Hong Kong introduced a new regulation to control the use of preservatives and antioxidants in food.
  • On December 24, 2014, the National Health and Family Planning Committee of China introduced the National Food Safety Standard for Food Additive Use (GB2760-2014).

Introduced the National Food Safety Standard for Food Additive Use (GB2760-2014), which will be implemented on May 24, 2015

Some of the key players in the market are Cargill, Incorporated (U.S.), Ingredion Incorporated (U.S.), Archer Daniels Midland Company (U.S.), Kerry Group PLC (Ireland), Associated British Foods PLC (U.K.), E. I. Du Pont De Nemours and Company (U.S.), Arla Foods (Denmark), BASF SE (Germany), Koninklijke DSM N.V. (Netherlands), DMH Ingredients (U.S.), and Ajinomoto Co., Inc. (Japan).

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