Phyto-Sources builds capacity for functional food demand
sterol production capacity for the second time in one year, due in
large part to EU demand for its product.
The Houston, Texas-based company reported a 30 percent increase in capacity due to debottlenecking, technology improvements, and capital additions at its facility. This follows closely on the heels of a similar announcement in January, when the company instigated a 40 percent increase in capacity through streamlining and capital investments. The bulk of Phyto-Source's clientele consists of food manufacturers from Europe, where demand for non-genetically modified plant sterols is growing. "The EU sterol market place is growing and we're meeting the need," Tom Stegmann, manager of Sales & Marketing at Phyto-Source, told NutraIngredients-USA. Phyto-Source's facility is now able to supply 3,000,000kgs of non-GMO wood sterol per year. The company also attributes its larger ratio of European business to the fact it manufactures a non-GMO product. "The biggest issue is non-GMO versus GMO," said Stegmann. Because legislation in North America does not require that GMO products be labelled as such, the market for these more expensive products is not as developed as in Europe, according to Stegmann. As such, the company claims less North American food manufacturers are willing to pay the premium for such ingredients. Nonetheless, the phytosterol category is set to see rapid growth. Frost & Sullivan has estimated the United States phytosterol market to grow to $196.7m by 2012, doubling from $103.9m in 2005. Phytosterols have the added boost of holding a US Food & Drug Administration approved health claim for foods containing this ingredient: "Foods or beverages containing at least 0.4 grams per serving of plant sterols, eaten twice a day with meals for a daily intake of at least 0.8 grams, as part of a diet low in saturated fat and cholesterol, may reduce the risk of coronary heart disease." Based on the distribution of its own ingredients, Phyto-Source says the largest portion of phytosterol ingredient demand is for margarines, spreads and yoghurts. However, it indicates the fastest growing market is the mini-drink or functional 'shot' market. Euromonitor estimates the 'drinking yoghurt' market in Western Europe alone is currently worth $4bn, while in the US is it worth $0.6bn. The company is hinting at further changes down the road - beginning with further expansion of capacity and product varieties at their Houston facility and eventually building a major manufacturing plant in Europe to feed that market's demand.