Emulsifiers a prime example of innovation, says Frost

By staff reporter

- Last updated on GMT

Related tags: Raw material prices, Economics

Innovation in by emulsifier producers is good example of how
ingredients producers can revive a mature market by catering to
changing conditions and demands, says Frost and Sullivan in a new
briefing paper.

Consultancy Frost & Sullivan valued the European emulsifiers market at US$574m in 2006. It identified some 40 players on the market, including specialist ingredients firms Danisco, Kerry and Cargill. But research analyst Arthi V said in a new paper, entitled "Innovations revitalize growth in the European emulsifiers market",​ several factors have conspired to fuel innovation in the sector. These include interest in trans-fat free and low calorie products, where emulsifiers are needed to enhance taste so that consumers are not put off. Arthi also said that that some factors that could be seen as deterrents to the market are actually drivers for innovation as well. These include rising raw material prices, declining margins, negative views on additives, and the threat from substitutes like enzymes. Danisco is one company that has been making an effort towards countering raw material prices, for instance, with the developing a range of emulsifiers aimed at reducing the need to use commodity products such as wheat, gluten, and vegetable oils in food formulations Moreover, Arthi's colleague Chandrasekhar Shankaar recently wrote a market insight on the competition between emulsifiers and enzymes. Even though enzymes do not need to be labelled as additives and so have an advantage in the clean label wars, GM issues surrounding enzymes were said to negate this. Moreover, emulsifiers are more functionally diverse. Shankaar's conclusion was that enzymes do not pose a serious and long-term threat to the enzyme market. "In today's competitive market, research and innovation have become the corner-stone of success,"​ wrote Arthi. However the paper coincides with the publication of an economic report commissioned by the CIAA, which found that innovation in the food sector is being severely hampered by regulations. In particular, delays over novel foods approvals and limited financial benefits of being 'first' mean that it makes more economic sense to imitate than to innovate. This, warned economist Graham Brookes, is affecting the EU food industry's competitiveness in the global market.

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