The changing lifestyles and hectic work schedules have spawned a large
market for processed and packaged convenience foods. The booming
organised retail sector further extends the reach of processed foods.
The changes in eating habits and the frequent introduction of new
products and product lines, particularly in the functional food and
beverage market for low-fat, low-calorie products, spells growing
opportunities for the food additives market.
The market also finds encouragement in supportive government measures, such as policies to promote easy access to loans for small-scale food processing industries. Analysis of Indian Food Additives Market – a new study from Frost and Sullivan – found that market revenues, which stood at $484.2 million in 2012, are expected to reach $897.7 million in 2017. The study covered the food additive classes of flavours, colours, preservatives, emulsifiers, stabilisers and sweeteners.
Among these segments, flavours account for 47 per cent of the market; while sweeteners – which are growing at the rate of 25 per cent – contribute the least. However, the latter is expected to become increasingly popular in the coming years. Flavours are expected to grow at 13.9 per cent, synthetic colours at 7.4 per cent, natural colours at 12 per cent, preservatives at 15 per cent and food emulsifiers at 10.1 per cent.
“The additive industry in India is veering towards natural emulsifiers and nature-derived colours,” said Frost and Sullivan’s chemicals, materials and food research analyst. He added that this change in preferences emanated from the increasing health consciousness among Indians. However, natural food additive manufacturers find it difficult to source raw materials due to the lack of the centralised supply chain system and presence of multiple sourcing points.
The study found that the participants could forge partnerships with cooperatives and invest in contract farming to counter this issue. Such strategic alliances and joint research and development (R&D) could also lower the prices of nature-derived products and lead to customised pre-mixes with application specific combination of flavours, colours and other additives for clients.
Some of the market restraints include the lack of cold storage infrastructure, an advanced logistics and transportation system for perishable goods which leads to substantial wastage of agro-produce, adversely affecting farmers and natural food additive manufacturers. In response, the Indian government has allowed 100 per cent foreign direct investment (FDI) to attract large industry groups to invest in developing cold chain logistics.
“Ironically, certain government policies could stifle innovation,” the analyst noted. “For instance, the Food Safety and Standards Act (FSSA), 2006, which governs the food additives segment, permits only certain colours that are certified by the Bureau of Indian Standards (BIS),” he added.
Nevertheless, continuing product and process innovations in the food and beverage sector would motivate the additives market to expand its product portfolio, along with the entry of global participants would serve as market drivers, and can lead to an increase in market consolidation. As smaller retailers from the unorganised sector are acquired, the margins of larger manufacturers will improve.
The market also finds encouragement in supportive government measures, such as policies to promote easy access to loans for small-scale food processing industries. Analysis of Indian Food Additives Market – a new study from Frost and Sullivan – found that market revenues, which stood at $484.2 million in 2012, are expected to reach $897.7 million in 2017. The study covered the food additive classes of flavours, colours, preservatives, emulsifiers, stabilisers and sweeteners.
Among these segments, flavours account for 47 per cent of the market; while sweeteners – which are growing at the rate of 25 per cent – contribute the least. However, the latter is expected to become increasingly popular in the coming years. Flavours are expected to grow at 13.9 per cent, synthetic colours at 7.4 per cent, natural colours at 12 per cent, preservatives at 15 per cent and food emulsifiers at 10.1 per cent.
“The additive industry in India is veering towards natural emulsifiers and nature-derived colours,” said Frost and Sullivan’s chemicals, materials and food research analyst. He added that this change in preferences emanated from the increasing health consciousness among Indians. However, natural food additive manufacturers find it difficult to source raw materials due to the lack of the centralised supply chain system and presence of multiple sourcing points.
The study found that the participants could forge partnerships with cooperatives and invest in contract farming to counter this issue. Such strategic alliances and joint research and development (R&D) could also lower the prices of nature-derived products and lead to customised pre-mixes with application specific combination of flavours, colours and other additives for clients.
Some of the market restraints include the lack of cold storage infrastructure, an advanced logistics and transportation system for perishable goods which leads to substantial wastage of agro-produce, adversely affecting farmers and natural food additive manufacturers. In response, the Indian government has allowed 100 per cent foreign direct investment (FDI) to attract large industry groups to invest in developing cold chain logistics.
“Ironically, certain government policies could stifle innovation,” the analyst noted. “For instance, the Food Safety and Standards Act (FSSA), 2006, which governs the food additives segment, permits only certain colours that are certified by the Bureau of Indian Standards (BIS),” he added.
Nevertheless, continuing product and process innovations in the food and beverage sector would motivate the additives market to expand its product portfolio, along with the entry of global participants would serve as market drivers, and can lead to an increase in market consolidation. As smaller retailers from the unorganised sector are acquired, the margins of larger manufacturers will improve.
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