What is the New Ingredients Data Telling Us?
In 2016, the ingredients industry continued to look to Asia Pacific and the Middle East and Africa for progress, with these being the only two regions to post growth of more than 1% from 2015 to 2016. Combined, these two regions have now increased their share of overall global ingredient consumption from 37% in 2011 to 42% in 2016. Conversely, developed regions remained stagnant, with Western Europe seeing an outright decline in ingredient consumption between 2015 and 2016 of over 300,000 tonnes, equivalent to -0.3%. On a country level, it is impossible for ingredient suppliers to ignore India, which recorded the best growth between 2015 and 2016, at 8% and also led the way in absolute growth with an increase of over 3.3 million tonnes (excluding commodities). However, suppliers should remember that many of the opportunities in India and similarly fast growing emerging countries will relate to bulk ingredients, and despite performing poorly in absolute volume terms, developed Western markets are likely to remain the main source of opportunity for higher margin speciality ingredients.
2016 Global Ingredients Market in Figures
Note: The figures above exclude the commodities ingredient category
Subtle changes as clean label remains strong
Clean label continues to be the prevalent trend in food and beverage ingredients as consumers force manufacturers towards simplicity. A look at ingredient volume consumption per 1,000 people shows this, with colours and flavours increasingly under threat of replacement by colouring foodstuffs and flavouring botanicals respectively, both recording declines in growth of 1% between 2015 and 2016. Meanwhile much maligned preservatives BHA, TBHQ and benzoates also declined. Going forward, the evolution of this trend is likely to see more products which claim to be ‘additive free’ or ‘minimally processed’, with a lack of artificiality increasingly considered a given. As seen in 2016, these claims mean an increased focus on the entire production process, and manufacturers must scrutinise their supply chains to ensure they can back up their claims or else risk getting into hot water with consumers.
Bread’s rising potential spelt out for protein suppliers
2016 saw an increase in the use of proteins in bread globally, suggesting that going forward this baked good will see further experimentation and move away from the relatively unchanged traditional product which remains dominant. Between 2015 and 2016, whey protein concentrate use in bread grew by 16%, the most of any single ingredient. ‘Other proteins’, which includes proteins not explicitly tracked by Euromonitor International, such as algal, rice and oat protein, also performed strongly, growing by 15%. While it must be acknowledged that this growth comes from a low base, with whey protein concentrate and ‘other proteins’ only constituting a combined 6,266 tonnes of total global bread consumption, it shows that bread manufacturers recognise the need to tap into consumer appreciation of protein and are willing to experiment with new products which challenge established formulations. With bread the second largest packaged food category, behind dairy, further infiltration, to the point where protein is less a novelty and more of an essential, will see soaring demand for suppliers.
Dishwashing detergents going greener
In 2016, the EU proposed to extend the phosphate ban on water-polluting phosphates in laundry detergents to include dishwashing detergents, with phosphates and sodium triphosphate, which recorded 2016 consumption of 15,000 and 52,000 tonnes respectively in Western Europe, the key ingredients affected. The ban has forced manufacturers of automatic dishwashing detergents to move away from phosphates from January 2017, with methylglycine diacetic acid trisodium salt (MGDA) and citrates each forecast to grow by 13,000 tonnes in Western Europe between 2016 and 2017 as a result.
Protection at the heart of consumers’ preferences
With global demand for sunscreen ingredients projected to reach 52,000 tonnes by 2021, sun protection remains the largest category for sunscreen ingredients in the beauty industry. UV protection is becoming an essential function across all beauty categories with more products incorporating sunscreens as skin health concerns are becoming top of mind for consumers. This is especially true in Asia Pacific where skin care is the largest category, accounting for over 50% of the total volume of sunscreen ingredients in the region.
With increasing awareness of the effect of sun on the skin, pollution hitting critical levels and the growing dependence on technological devices which emit blue and infrared light, full environmental protection claims are expected to be at the centre of the beauty industry radar over the next few years. Botanical ingredients with antioxidant, anti-inflammatory and shielding properties are expected to benefit from this trend with an expected volume CAGR of 7% during the forecast period. Whether this is a marketing strategy or the new anti-ageing flagship, remains to be seen.