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Europe, 2nd-largest market for specialty ingredients
Saturday, 12 November, 2022, 16 : 00 PM [IST]
Venkatesh Ganapathy
The world (particularly after the pandemic) has embraced health-consciousness with consumer interest focusing on alternative lifestyles and diets. Consumers in Europe are displaying a predilection for consuming vegan foods. Food manufacturers have to adopt new methods of manufacturing enabled by technology and incorporate food ingredients to meet the needs of consumers. This is both an opportunity and challenge for food ingredient manufacturers.

Opportunity presents itself in the form of increased sales revenues and leveraging an ecosystem that supports innovation and new product development. However, regulatory challenges and the complexities in manufacturing processes using functional ingredients have to be dealt with by ingredient manufacturers. Functional foods are costly when they contain natural ingredients. The manufacturing process has to be geared to deal with the complexities associated with incorporating functional food ingredients.

Food ingredients sold in Europe must not only be tasty, safe and affordable but they must also be produced using sustainable techniques. Functionality, quality, and performance of the food ingredients is inextricably intertwined. Ingredients are needed for food preservation, food freshness, food safety, taste and flavour enhancement, texture formation, flavour intensification and increased shelf life of food products.

Food ingredients market
The global food ingredients market size is valued at US$37.68 billion in 2019 and is expected to reach US$84.97 billion by 2027 at a CAGR of 10.6%. In 2020, plant-based food ingredients market in France was US$570 million. This figure is expected to reach over US$ one billion by 2026. The global specialty food ingredients market is estimated to be valued at US$148.2 billion in 2022. It is projected to reach US$196.2 billion by 2027, recording a CAGR of 5.8%. The United Kingdom food additives market is projected to grow at a CAGR of 3.02% during the forecast period (2020 - 2025).

European market is segmented into the UK, France, Spain, Germany, Italy, Russia, Sweden, Denmark, Switzerland, the Netherlands, Turkey and Czech Republic. In 2019, Europe was the second-largest market for specialty food ingredients. European cuisine is world famous. Italy, France and Belgium import specialty food ingredients.

Consumer demand is concomitant with sweeping changes in government regulations and directives on food safety and promotion of well-being resulting from healthier food choices.

Growing demand for convenience foods has led to increasing use of preservatives to increase the shelf life of those products. Rising demand for functional beverages has led to sale of specialty food ingredients like stevia, specialty flavours, and acidulants. Other ingredients that are in demand in the UK market are sweeteners, emulsifiers, anti-caking agents, enzymes, hydrocolloids, flavour enhancers, food colourants, and acidulants. The processed food industry in the UK has developed substantially leading to a stable market for preservatives.

Products that address nutritional deficiencies

Rising rates of diabetes and obesity in Europe have made association of wellness with consumption of food a weather vane for consumers’ food choices. Consumers in Europe are demanding food products with extended nutritious value, demand for cold storage foods and low-calorie diet foods. Consumers desire products that address nutritional deficiencies.

Clean label products that are devoid of artificial ingredients and synthetic chemicals are what European consumers desire leading to their preferences for vegan and plant-based products, products free from allergens and probiotics, alcohol free beverages and fermented food. Millennial consumers choose food products based on their personal values.

Consumers in the UK have diverse preferences (including desire for plant-based and natural products) and this necessitates importing some of the food ingredients. Health and well-being are the key trends that are driving the demand for plant-based food ingredients in the European market. The pandemic led to consumers focusing on healthy food products and reducing their cravings for cakes and pastries.

Food acidulants are much in demand in the UK, Germany, France, Spain, Italy and Russia as they offer higher order functional benefits. For example, lactic acid is an acidulant that reduces microbial contamination. Milk-based products like butter, cheese, flavoured milk and yogurt are also in demand leading to increased demand for natural food flavours that can enhance the taste of dairy products.

Antioxidant rich berries, super powders, teas, medicinal mushrooms are some of the popular flavours that are in demand in Europe. After the pandemic, European population is insisting on buying clean-label items that are free of artificial flavours and colourings. The challenge lays in ensuring that these flavours are stable during the manufacturing process. Food emulsifiers are being used in bakery products particularly in Brazil and Argentina.

Table 1: Research outcomes in UK (post pandemic)

% Of households in UK that avoid dairy products


% Of household in UK that prefer dairy substitutes


% Of consumers who prefer ingredients that are sustainably sourced


% Of consumers who believe that improved gut health leads to better immunity


Popularity of ready-to-eat frozen and canned foods, breakfast cereals and confectionery products has expanded the European market for specialty food ingredients. Cooking oils are now fortified with vitamins and antioxidants.

Food coating ingredients are used in dietary supplement products to enhance the organoleptic properties of ready-to-eat processed products, bakery and confectionery products.  Organoleptic properties add to the sensory appeal of food and influence customer experience.

Ingredients in food coating are derived from natural and minimally processed sugars, honey, chocolate and sauces. Growing sales of chocolates and baked products has led to spiralling demand for food coating ingredients. Antimicrobial coatings have to be developed in accordance with local European regulations. Food coating ingredients improve flavour, colour and sweetness of the product being coated. Flour is an attractive coating ingredient in fried meats and fast foods.

Food manufacturers face the daunting choice of reducing the sugar, fat and salt content in their products. Artificial flavours, colours and preservatives do not hold any appeal any longer as “natural” seems to be the buzz word.  

Innovation in food ingredients

The global market landscape for food ingredients will be characterised by intense competition in the future. Diversified food products will necessitate the need for innovations in developing food ingredients that balance taste with affordability and functionality with sustainability.

Food ingredient suppliers have to innovate to ensure that their products meet the requirements of the food industry. Additionally, the food ingredients manufacturers have to comply with stringent regulations too. New regulations pertain to the use of plastic packaging and use of ingredients that are rich in salt, sugar and fat in moderation. Innovations have become a necessity in food flavours and enhancers. Natural extracts with fruit flavours are also in demand.

New trends in food processing technology have sharpened the focus on new product development. Food processing and confectionery companies abound in the UK and Germany. Flavours and colours are used in candy, cakes, chocolate and ice cream. Confectioneries and functional foods and beverages bank on innovative food ingredients.

In the food industry in particular, when food legislation and consumer demand reach a tipping point, they act as a springboard to spur innovation. For example, stringent regulation on imported vegetables and fruits and food ingredients has led to the emergence of hydroponic farming techniques in the UK. This may affect future imports. This soil-less farming technique uses less water than traditional farming. It has been used to grow tomatoes, baby plum and vine.

(The author is associate professor,
Presidency Business School, Bengaluru)

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