The most influential Megatrends set to shape the world through 2030, identified by Euromonitor International, help businesses better anticipate market developments and lead change for their industries.
Phytoestrogens, botanicals, cultures, polysaccharides and proteins are set to be the top five food and beverage ingredients, with the highest forecast growth rates globally. This shows the increasing consumer trend towards healthier and functional products, not only in developed markets such as Western Europe but also in the BRIC countries.
Nearly 30% of all food and beverage ingredients globally were consumed in Asia Pacific in 2012, up from 24% in 2007. The primary cause of the shift was increased consumption of commodity and bulk ingredients such as cereals, meats, milk, oils and sweeteners. However, added-value ingredients performed well despite their smaller volumes, particularly oligofructose and maltodextrin in the polysaccharides and oligosaccharides category, flavour enhancers and artificial sweeteners.
While Asia Pacific gained share in the overall global ingredients market, the shares of North America and Western Europe declined. The two regions combined still consume over one-third of the world’s food and beverage ingredients but the economic downturn took its toll, with volume sales in packaged food and soft drinks stagnating in both regions.
Share of Global Food and Beverage Ingredient Consumption by Region (tonnes) in 2012
Source: Euromonitor International
Within Asia Pacific, Vietnam was the single best performing country in terms of absolute volume growth in both the packaged food and soft drinks industries over 2007-2012, and therefore achieved the highest growth rate for total ingredients. Vitamins and minerals did particularly well in Vietnam, with the rising popularity of fortified and functional soft drinks such as RTD tea and juices spurring growth.
Perhaps unsurprisingly, Greece was the worst performing country globally in terms of absolute volume growth of food and beverage ingredients. Sales of both packaged food and soft drinks declined over 2007-2012, despite manufacturers aggressively discounting products in an effort to protect volume sales. The forecast for Greece’s ingredients industry remains bleak, with not a single food or beverage ingredient category anticipated positive growth over 2012-2017.
The US is the only Western country that appears in the top five markets for flavour enhancers. While China dominates the market, consuming 1.3 million tonnes in 2012, Indonesia is set to achieve the fastest growth globally in absolute terms, at just under 150,000 tonnes, over 2012-2017. The Asian flavour enhancer market is driven by monosodium glutamate (MSG), which is used as an ingredient in sauces, snacks and noodles as well as being added directly to freshly prepared food.
In 2012, over 50,000 tonnes of xylitol were consumed in sugar-free gum and mints globally. Despite the recently approved European health claims for xylitol relating to oral health and bone strength, xylitol is expected to perform poorly in Western Europe over the forecast period as chewing gum sales remain flat.
Regardless of sliding sugar confectionery sales in both volume and value terms, consumption of natural product colours has grown by over one-third since 2007 in this category in Western Europe. The trend towards natural colours, flavours and preservatives in confectionery has been very strong as consumers become wary of their children in particular eating products that contain synthetic ingredients.
In North America, 5% of protein ingredients were consumed in snack bars in 2012, yet the product category accounted for 30% of total volume growth of these ingredients over 2007-2012. In the US, sales of energy and nutrition bars reached US$2.3 billion in 2012 as they became mainstream, moving from the gym bag to the handbag. As consumers continue to use them as a source of protein, vitamins, minerals and fibre to supplement their diets, the category offers a good opportunity for protein ingredient players not only in the US but also in Western Europe and Australasia where energy and nutrition bars are also popular.
There are good opportunities for speciality fibre and protein ingredients in meal replacement and convalescence products, despite this being a relatively niche category. Consumption of maltodextrin, milk and soy protein concentrates in meal replacement products is forecast to grow strongly, especially in South Korea, India and Brazil.