Caramel manufacturers look east for promising markets

Caramel colours manufacturers in Europe are operating in an increasingly mature market with average levels of growth of only 1 to 2 per cent per annum. But if they look to Eastern European markets the picture is very different, reveals a recent study from international market consultants Frost & Sullivan.

Lyndsey Greig, Food Market Analyst with Frost & Sullivan explained: "Many caramel manufacturers have started to look at these countries to maximise revenues. While the size of the markets might be small and certainly may not be worth developing local production facilities for, companies need a presence in this area either by way of a local distributor or their own sales offices to capitalise on the potential double digit growth."​

At the same time, caramel colour manufacturers will have to guard their market position against the threat from burnt sugar manufacturers who are working hard to convince food and beverage manufacturers that it is a viable replacement, notes the European Food Colours Market​ report.

Although burnt sugar may still have some doubts around its colouring properties, its advantage is that it is manufactured without chemicals and therefore not subject to E number legislation - an appealing trait for food manufacturers trying to meet consumer demand for reduced E numbers.

Frost & Sullivan valued the total European caramel market in 2001 at $27.6 million (€30.19m) , with growth forecast to reach $29.6 million (€32.37m) in 2008. Revenues are expected to be higher in the short term as raw materials stabilise and the soft drinks market continues to grow.

The study describes the total European food colours market which was valued at $237.4 million (€259.6m) in 2001 and makes forecasts to 2008. It is segmented by food colour type, including natural colours and synthetic colours, with a separate chapter considering the caramel colour market.