Food Ingredients: Opportunities in Times of General Market Stagnation

Aug 13, 2013, 04:00 ET from UBM Live

FRANKFURT AM MAIN, Germany, August 13, 2013 /PRNewswire/ --

Despite unchanging food consumption - Food ingredients market in Europe shows further growth

The food and beverage market in Western Europe accounts for a whopping EUR 1.3 trillion per annum. Yet this figure cannot hide the fact that the latest increase in volume was only minimal at 0.5 percent growth from 2011 to 2012. This is not only due to potential market saturation, but is also caused, for example, by the economic crisis hitting the Southern European countries. The impact on consumer buying behaviour is clearly felt. To maintain or even expand their share of the stagnating market, food producers must find the courage to innovate and respond to the latest trends with great flexibility. The trade fair, Food Ingredients Europe (19th to 21st November 2013 in Frankfurt am Main), not only presents an overview of current food trends, but first and foremost, is a forum where food producers can find a plethora of new ideas for creating innovative, top-selling products. 1,500 exhibitors and 26,000 decision-makers are expected to attend the world's most important gathering of the food industry this year. 25 percent of global sales in the food ingredients segment are transacted here, with average spending per trade visitor amounting to just under EUR 1 million.

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Natural ingredients gaining ground in Germany

Compared with its European neighbours, Germany is the biggest food producer, and its food and beverages industry constitutes the country's fourth largest industrial sector. This branch of the industry is characterised by some 6,000 small and medium-sized enterprises which produce goods worth EUR 163.3 billion in total.

The developments which food and drink producers must keep an eye on are primarily those brought about by demographic changes. Germany is home to a growing number of older people whose consumption patterns are determined in large part by changing physical needs. Health and wellness products play a central role, as do functional foods which can help, for instance, to keep diabetes, high blood pressure or cholesterol levels in check. The second major development is the rise of organic products to the point at which they have surpassed their initial status as a niche trend and have become a mainstay on day-to-day shopping lists in Germany. This is clearly reflected by the current market data - a volume of EUR 6.6 billion makes Germany the undisputed front-runner in terms of production and consumption, and the largest market in Europe by far.

Food Ingredients Europe offers solutions to address precisely these trends. The showcased palette includes organic food ingredients that make products interesting for a target group that has developed an exacting awareness of the provenance and natural content of foods. Exhibitors will also be presenting ways to reformulate products, or to replace sugar or fats. These approaches make it possible to create products that provide additional nutritional value whilst maintaining taste, and thus meet the needs of an older demographic intent on buying food products that contribute to a healthy lifestyle.

European market figures reveal trends

The developments in the German market are representative of Europe as a whole. Despite an overall decrease in spending due to the protracted depression, the situation also presents an opportunity for producers of food ingredients. Companies are forced to rely on innovative ingredients in order to retain their market share in the face of the current development. This has introduced a welcome element of change to the market. The figures reflect the natural foods trend. With a sales volume of EUR 563 million and an expected 3-percent growth rate, natural flavours are outselling artificial flavours, having previously already attained a 40-percent share of the overall market in this segment. Natural food colouring agents are also seeing increasingly widespread use. Their share of the total colourant market has grown by 68 percent to EUR 551 million since 2005. Another possibility to produce foods with additional nutritional value, fewer calories and the same intensive flavour as before is to introduce sweeteners. Sweetening agents such as stevia and sugar substitutes are used in an ever-growing number of soft drinks and sweet foods. The market volume of sweetening agents as food ingredients has grown to over EUR 257 million to date. The same applies to ingredients used to replace fat. This market is worth EUR 241 million per year, and utilises 234,070 tons annually for the production of low-fat products. Forecasts indicate a growth of 3.3 percent.

Foods with additional health benefits are particularly popular with the older generation. The market has already responded: Annual sales of vitamins and minerals total more than EUR 138 million, of which vitamins account for EUR 79 million and 11,203 tons, while minerals respresent EUR 60 million and 6,526 tons.

The German and European market for food ingredients has been shaken up. This has created a situation in which opportunities exist for producers to win market shares, provided that they read the signs of the times correctly and orientate their activities on the latest trends. Specialised trade fairs such as Food Ingredients Europe offer a wide range of information, products and innovations, and many avenues to explore.

Sources:    "The Food & Beverage Industry in Germany - Issue 2012/2013," Germany Trade & Invest

    "The future for natural and health ingredients - Western Europe edition 1" - RTS Resource, 2011

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Food ingredients was launched in Utrecht, The Netherlands, in 1986. Its portfolio of live events, publications, extensive data, digital solutions and high-level conferences, are now established throughout the world and provide regional and global platforms for all stakeholders, in the food ingredients industry. Over 500,000 people have attended our shows over the years with billions of Euros worth of business created, as a result. With over 25 years of excellence, our events, digital solutions and supporting products, deliver a proven route to market, with a truly global audience.

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