Sales of natural flavours in Western Europe are set to be overtaken by sales in the Asia-Pacific market within the next three years, according to market research firm RTS.
This was just one of the findings to emerge from RTS’s Flavours – Natural and Synthetic report, which focuses predominantly on industrial flavourings and excludes areas such as herbs, spices and seasonings.
The report claims the global market in natural flavours is growing at a rate of 9.1% and was worth $3.3bn (€2.71bn) in 2010.
The report also states that yoghurt and confectionery categories are clocking up the fastest growth in natural flavours globally. Soft drinks and ice cream are the largest categories for natural flavour use, according to RTS.
Jamie Rice, RTS research and marketing director, told Food Navigator: “In terms of the markets offering most opportunity for natural, North America will be biggest in value and volume, but Asia-Pacific is going to overtake Western Europe in terms of natural flavours.“ China was a big market, with even a small shift towards natural flavours making a big difference, he added.
The market shift indicates how swiftly the region is adapting to Western trends. Mexico was also “one to watch”, said Rice, with value growth of 5.4% predicted in natural flavours in the next three years.
However, despite the rapid growth in some regions, RTS said this was set to slow, not only in Europe and North America but also in the emerging markets of China, India, Mexico and Turkey. For example, it said China, which enjoyed 15% year-on-year growth in the past five years, will see this slow to 7.5% year-on-year over the next three years. “Things are going to get tougher as competition increases,” Rice, said.
Sustainability time bomb
In addition, major issues such as sustainability of supply and stability under different processing conditions are preventing natural flavours from overtaking their synthetic counterparts, he said. “The sustainability time bomb is going to come soon. We can’t grow all the natural ingredients to meet demand. One or two companies are even investing in synthetic flavours because of price and consistency of supply.”
The market for synthetic food and drink flavours still remains larger than natural variants, at 184,236 tonnes . “I don’t think natural [flavours] will achieve parity with synthetics for another 10 years,” said Rice.
Referring to the swift growth in natural flavours for yoghurts and confectionery, he said in the past five years there had been value growth of 14.3% in confectionery and 7.9% for yoghurts and desserts. “People that buy in those categories seem to have a high awareness of what they are eating.”
In value terms, the global natural flavours market was worth about $200m (€163.9m) in confectionery, against $900m (€737.7m) for soft drinks, the biggest single market.