Sales of natural flavours in Western Europe are predicted to be overtaken by sales in the Asia-Pacific market within the next three years.
According to a report by market research firm RTS, the global market in natural flavours is increasing at a rate of 9.1% and was worth $3.3bn in 2010.
Asia-Pacific to surpass Western Europe in sales of natural flavours
The report also talked of yoghurt and confectionary categories are clocking up the fastest growth in natural flavours globally.
Soft drinks and ice cream are the largest categories for natural flavour use.
Jamie Rice, the research and marketing director for RTS, said: “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”.
He also said that China was a big market with even a small shift towards natural flavours making a big difference.
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 9.3% predicted in natural flavours in the next forthcoming three years.
Even though there was some rapid growth in some regions, RTS said this was set to slow not just in Europe and North America but in the emerging markets of China, India, Mexico and Turkey.
For instance, 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.
He said that “things are going to get tougher as competition increases”.
There are some major issues such as sustainability of supply and stability under different processing conditions are preventing natural flavours from overtaking their synthetic counterparts.
He added: “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.
Rice said: “I don’t think natural [flavours] will achieve parity with synthetics for another 10 years”.
Rice also added that in the past five years there had been value growth of 14.3% in confectionary and 7.9% for yoghurts and desserts and people that buy in those categories seem to have a high awareness of what they are eating.
The global natural flavours market was worth roughly about $200m in confectionary, against $900m for soft drinks, the biggest single market.