Food Ingredients

Food ingredients are categorized into food additives, preservatives, nutrients, pH control food colors, nutraceuticals, taste modifiers, sugar substitutes, cooking oils, algae food ingredients among others. The demand for food ingredients is growing due to propelling growth of 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 enhance the shelf life, texture and stability of processed food, the food ingredients plays a vital role. Increasing end use industry to meet the growing demand for processed food is propelling the growth of food ingredients market. 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, and thicken and to maintain nutrition. For instance salt is used to preserve meats & fish, sugar to preserve fruits, vinegar solution or citric acid to preserve pickle, also herbs & 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 & soybeans to maintain the consistency of food, beet powder to provide color in food, and ascorbic acid or vitamin c to increase the self-life of pickle.

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

Globalization has led to the world becoming a smaller place, characterized by increasing trade activities, including in the food and beverages sector. This has led to rampant increase in import and export of food items across region, so to maintain the quality of food and establish commercially, the self-life of food is need to be enhanced. Europe is the second largest market for food ingredients due to increasing demand for healthier alternative to regular food.

OPPORTUNITIES

Increasing population and rapid urbanization with 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, increasing health awareness and increasing prevalence of food borne diseases in turn fueling demand for natural food ingredients. North America is expected to dominate the global food ingredients market, due to rising number of women in workforce and inclination towards ready to eat food. However, Asia Pacific market is expected to witness significant growth, due to booming economy especially in China, India and Japan and propelling demand for convenience food. Also, rapid urbanization in Asia Pacific and adoption of western culture is expected to double the growth of food ingredients market.

Dairy industry is expected to witness highest growth due to increasing demand for protein food across the world. Moreover, favorable government policy of Asia Pacific is 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 by investing US$ 1.2 billion. According to India Brand Equity Foundation (IBEF), a trust established by the Department of Commerce, Ministry of Commerce and Industry, Government of India, the food industry of India is expected to reach US$ 65.4 billion by 2018.Also, in 2016, the food processing industry contributed 14% to the GDP of India. Moreover, rapidly growing population of China, 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 middle class Chinese household is expected to fuel demand for food ingredients in the country.

Companies introducing new product have increased the demand for food ingredients, for instance in April 27, 2017, DuPont Nutrition & Health introduced SUPRO XT55 Isolated Soy Protein, to increase profitability of high protein beverages, ready to drink. Soy protein, is the alternate to dairy product in terms of protein supply and economic. 

KEY CHALLENGES

Stringent government regulations and time consuming approval process before launching commercially, pressurizes the manufacturer to obtain approvals prior to distribution. For instance,

  • April 01, 2016, Food and Drug Administration of U.S. has directed gaur gum as a natural substance which is obtained from maceration of the seed of the gaur plant are 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 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.
  • July 01, 2008, The Government of the Hong Kong special Administrative region, introduced new regulations to control the use of preservatives and antioxidants in food.
  • December 24, 2014, the National Health and Family Planning Committee of China

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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