Natural ways to spark sales in specialty ingredients

by Jeff Gelski
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Natural sweeteners
Euromonitor forecasts continued growth in natural sweeteners.

LONDON — The compound annual growth rate for specialty ingredients should slow globally from 2014-19 despite healthy growth in cultures and a desire for natural preservatives and sweeteners, according to a May 26 Euromonitor International webinar.

London-based Euromonitor International forecasts a global CAGR of 2% for specialty ingredients from 2014-19, which would be down from 3% from 2009-14. The “clean label” trend should affect specialty ingredients as should a slowing down in the rise of processed foods in developing countries.

John Madden, Euromonitor
John Madden, head of global ingredients research for Euromonitor International

“Many specialty ingredients are chemical in nature and have poor clean label credentials,” said John Madden, head of global ingredients research for Euromonitor International, in the webinar titled “Clean Label Revolution: The Ingredients Industry Responds.”

Within specialty ingredients, cultures are forecast to have a 3.5% CAGR from 2014-19.

“(Cultures) benefit from a complete absence on many ingredient lists,” Mr. Madden said. For example, starter cultures used to make cheese do not appear on product labels.

“Cultures also benefit from a strong health profile in the case of probiotics,” he said.

Vitamins and minerals and botanicals/bioactives also are forecast to have CAGRs above 3% from 2014-19.

Growth should be more modest for other specialty ingredients. While preservatives/antioxidants and emulsifiers each are forecast to have CAGRs of over 1% from 2014-19, colors are forecast at about 1% and high-intensity sweeteners are under 1%. Flavor enhancers came in at about minus 0.5%.

“These categories are generally clouded with chemical ingredients or with ingredients with complex names, and consumers certainly don’t understand those,” Mr. Madden said.

Clean label developments also are taking place with these ingredients, he added.

Stevia extracts, a natural ingredient, grew to account for 3% of global high-intensity sweetener volume in 2014. Mr. Madden said Euromonitor expects more modest growth for stevia through 2019 as it is unlikely to erode much volume from other high-intensity sweeteners and is more likely to take away volume from sugar. If stevia replaces 0.5% of the sugar volume used in products, it could have a CAGR of 17% from 2014-19.

Fermented sweeteners

Fermented steviol glycosides, which are sourced from yeast and not stevia plants, potentially could bring confusion to the sweetener market.

“In terms of clarity, the lack of regulation regarding the use of the term natural could really be a potential problem for the ingredients industry in the future because advances in processing technologies and techniques will blur the lines further over what can and cannot be considered natural,” said John George, industry analyst, ingredients, for Euromonitor International.

The price positioning of the fermented steviol glycosides, which are more cost-effective and sustainable, is a great factor, but they may appear to be less natural to consumers, he said.

“It could just take one or two adverse stories in the media to generate debate, and again, as we have mentioned, perception really is everything,” Mr. George said. “Any kind of backlash could tarnish the image of stevia as a whole.”

Celery powder as a preservative

While natural ingredients are making volume gains in the preservatives/antioxidants category, chemical ingredients continue to dominate globally. Calcium propionate, widely used in baking, made up 38% of the preservatives/antioxidants used in food and drink applications in 2014, according to Euromonitor. Potassium sorbate was at 17%, and nitrites/nitrates, which often are used in meat products, were at 14%.

One natural preservative, rosemary extract, made up 3% of the preservatives/antioxidants used in 2014. Another natural preservative, celery powder, is becoming more widely used after its successful use in organic meat products, Mr. Madden said. For an example, Euromonitor pointed to Corbion Purac’s Verdad Avanta C100, a preservative for meats and fresh sausages that contains celery powder and vinegar.

Plant protein from aqua farms

For a promising plant protein ingredient, Euromonitor International pointed to Parabel’s Lentein, an ingredient sourced from water lentils in an aqua farm. Lentein is non-bioengineered/non-G.M.O., vegan, dairy-free and soy-free, Mr. George said.

“However, it’s actually the water lentils’ sustainability credentials that really set Lentein apart from the opposition,” he said. “Water lentils are grown in aqua farms, and so it’s fast growing and can be harvested every day. It’s also been described as a carbon-neutral plant source (as) 90% of the water used in its production is recycled.”

Lentein
Parabel’s Lentein is an ingredient sourced from water lentils in an aqua farm.

Targeting naturally healthy

Specialty ingredients designed for the naturally healthy category should do better in certain geographic areas. In the United States, the naturally healthy category should experience a CAGR over 2% from 2015-2020, which would compare to a CAGR under 2% for fortified/functional, according to Euromonitor. In Western Europe, Euromonitor forecasts CAGRs of over 2% for naturally healthy and under 1% for fortified/functional. In Latin America, the forecast CAGRs are nearly 5% for naturally healthy and a little over 4% for fortified/ functional.

Globally, the forecast CAGRs are 4.5% for naturally healthy and 5% for fortified/functional. The fortified/functional category continues to be strong in Asia, Mr. George said.

“There are many signs that consumers in this region, too, are paying greater attention to ingredient labels,” he said. “So perhaps we can expect naturally healthy to become increasingly important in Asia Pacific.” 
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