DD Williamson extends caramel colours in China

- Last updated on GMT

Related tags: Starch, Alcoholic beverage, Food

Looking to boost growth in the sluggish caramel colour market, the
world's largest manufacturer, DD Williamson will extend its reach
in the burgeoning Chinese market with the extension of its liquid
product line for Asia,writes Lindsey Partos.

Already part of the US firm's portfolio, DD Williamson said it will start production at its Asian facilities of three colours for sauce and brewing applications, and a caramel for flavour and alcoholic beverage applications.

One of seven manufacturing sites located around the world, the line extension at the firm's Chinese facilities reflects a current trend in the ingredients industry to protect market share and compete for new sales.

The rising power and ongoing growth of the multiple global retailers is putting constant pressure on ingredients companies to keep up with the pace, deliver products at competitive prices and guarantee supplies.

Driving the market is the increased spending power and changing eating habits of China's 1.3 billion people who are transforming the country's food sector, both domestically and in foreign trade.

China food industry sales took off in the mid 1990s rising from under 100 billion yuan (€9.2bn) in 1991 to well over 400 billion yuan (€37bn) just ten years later.

Not only facing high raw material prices, European ingredients companies working with caramel colours - used extensively in soft drinks such as Coca-Cola - must inject growth into a mature market that sees average levels bundling along at only 1 - 2 per cent per year.

Market analysts Frost & Sullivan valued the total European caramel colour market at €22.7 million in 2001, forecast to creep up to €24.1 million by 2008. But this is just fraction of the total European food colours market estimated at €193.4 million in 2001.

The analysts predict that revenues for companies in caramel colours - of which privately held DD Williamson is the number one supplier - are expected to be higher in the short term as the soft drinks market continues to grow. But the impact of higher global prices for sources of carbohydrates - notably wheat and corn - will eat into these revenues.

Competition in Europe stepped up at the beginning of last year when the US caramel leader bought Cargill's Cerestar caramel colour facilities in the UK. Under terms of the agreement DD Williamson sources glucose syrup via a pipeline from Cargill's Cerestar starch refinery in Manchester to manufacture 'a broader line of caramel colour and burnt sugar products for global markets'.

Related topics: Market Trends, Flavours and colours

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