By 2008 food makers with a slice of the €3.24 trillion global processed food market will call on $5.1 billion (€4.14bn) worth of food additives in the US, finds a new report from market analysts Freedonia.
Demand for food additives in the US is projected to increase 4.8 per cent with gains spurred by increased levels of food production, and by growth for value-added products including high-intensity alternative sweeteners and nutritional additives such as vitamins, minerals and herbal extracts.
The market for alternative sweeteners holds considerable potential - growing 8.3 per cent year on year until 2008 - as rising health concerns drive consumers towards sugar free products and food makers introduce zero-calorie or low-calorie sugar substitutes into their new product formulations.
Sales will rise from a small base of $81m in 1998 to $189m in 2008.
Recent introductions of high-intensity sweeteners, such as zero-calorie sugar derivative sucralose, have been well received by the market.
A lift in demand for Tate & Lyle's sugar replacer, 600 times sweeter than sugar and sold under the Splenda brand, offered relief for the company hit by squeezed margins and higher raw material prices in its starch business, the London-based firm said last week.
Sucralose is permitted in 40 countries, but has only recently been accepted onto the EU25 market through an amendment to the 1994 EU Sweeteners Directive (94/35/EC), cleared in February this year.
Further low-calorie sweeteners currently used in the US include neotame (not available on the European market) and saccharin.
They join the polyols, sugar-free sweeteners that are carbohydrates and not sugars, used in a wide range of products including chewing gums, sweets, ice cream, baked goods and fruit spreads.
Those currently used in foods in the US are erythritol, hydrogenated starch hydrolysates (including maltitol syrups), isomalt, lactitol, maltitol, mannitol, sorbitol and xylitol.
According to the Freedonia report, strong gains are also forecast for bulk nutraceutical additives, again driven by consumer demand pushing for 'health maintenance and disease prevention' foods.
The report predicts that sales will rise by 6.5 per cent each year until 2008, to $370m from $210m in 1998.
In parallel to an increasingly complex food production system, the market for food preservatives has experienced strong growth and the Freedonia report forsees the pace to continue. Growing at 5.7 per cent each year the market is expected to be worth $415m by 2008, up from $216m in 1998.
But by 2008 flavours and flavour enhancers will remain the largest product segment, accounting accounting for nearly 40 per cent of overall additive demand. Annual growth for this segment is pitched at 4.3 per cent, rising from $1.39bn to $1.97bn in 2008.
"Increased consumer interest in ethnic and intense flavours will drive demand for these products, although slowing sales of processed foods (the largest outlet for flavours) will lead to slightly subpar growth through 2008," said the report.
Texturants and fat replacers will move slightly above the overall market pace, coming in at 4.9 per cent growth, valued at $820m in 2008 from $523m in 1998.