Rising cheese consumption and rising consumer demand for low-lactose and lactose-free dairy products is driving Europe's $65.5m dairy enzyme market forward, according to a new report by Frost & Sullivan.
Development has also been spurred on by dairy processors' increasing desires to bump up earnings across the industry. Many firms are trying to add value to products like cheese and milk, which have been bogged down in commodity categories.
The report says that demand for new flavours and premium products will maintain dairy enzyme innovation.
The good news for processors is that dairy enzyme prices have fallen consistently since 2000 thanks to market consolidation and new production technologies.
Frost & Sullivan predicts this trend will continue as the market becomes more competitive: "Cheese making is shifting from an art to science and enzyme products from various producers can be directly compared."
So who is ahead of the game?
Frost & Sullivan puts Chr Hansen head and shoulders above the other main players - Novozymes, DSM and Danisco - with half the European dairy enzymes market.
Chr Hansen is the largest producer of natural, fermented and microbial ingredients for cheese manufacture and other dairy products. "Highly effective enzyme products, innovation and close co-operation with its customers have helped Chr. Hansen retain its dominant position in the market," says the report.
Hansen's products include: CHY-MAX, a milk-clotting coagulant for premium cheese-making; Hannilase, targeted at the lower end of the cheese market; and Naturen, derived from calf or cow stomach extracts and designed to deliver high cheese yields.
The firm recently doubled capacity at its dairy cultures plant in France, now said to be the world's largest. "From a marketing point of view, we have moved ahead of the competition over the past couple of years and we intend to do everything to keep that position," said Lars Frederiksen, Hansen's new chief executive.
DSM is Frost & Sullivan's other forerunner in the dairy enzyme market's emerging trends.
The firm has a broad range of coagulants used for cheese production, such as Fermentation Produced Chymosin (FPC), and is a strong producer of lactases, used to make low-lactose dairy products.
"High quality products and excellent technical support are the strengths of DSM," says the report.
Cooperation between firms is also becoming more common. Last autumn, Chr Hansen linked up with Novozymes to work on a cheese enzyme development project.
What are the major challenges?
The debates over the safety of genetically modified (GM) enzymes, and over which ingredients need to be labelled as GM on finished products, are major challenges to the industry and its growth trends.
"This has restrained growth in the market for dairy enzymes as cheese manufacturers are reluctant to adopt GMO-derived enzymes in cheese-making," says Frost & Sullivan.
But, the report also says that the use of GM enzymes in cheese manufacture is increasing because they are cheaper.
Anti-GM attitudes and legislation issues will restrict enzyme market growth in Europe in the short-term, the report says, yet the impact is expected to be less in the long-term.
"Most of the companies are global. By supplying to other markets it is in their interest to keep track of global trends, and carry-out new product development on GM enzymes intended for other markets," said Kathy Brownlie, programme manager at Frost & Sullivan.
"Hence if the attitudes to GM in Europe change, they will be well-positioned to make the most of this opportunity," she said.
Further details about the report European markets for enzymes in food applications can be obtained from Frost & Sullivan