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RTS identifies growing market for natural flavour materials

By Caroline Scott-Thomas , 28-Sep-2012

Market research firm RTS has identified a burgeoning market for natural flavour materials as companies increasingly move away from artificial ingredients – but its first report on the market is intended to open discussion rather than clearly define market boundaries.

Natural flavour materials could include anything from garlic and yoghurt powders, to herb, spice and fruit and vegetable concentrates, the market researcher says. It broadly defines the market as “using natural foodstuffs in a concentrated form” with usage rates similar to those of herbs and spices – about 0.5% to 3% of finished product weight, as consumed.

“We understand how the food industry is moving,” RTS director Jamie Rice said.

Several years ago, manufacturers started switching artificial colours out of foods and beverages in response to consumer demand and Rice says he is beginning to see the same trend in the flavour market.

“While we recognise this is a broad category, we thought it was important to start the discussion…We think this is a good starting point for the industry.”

According to RTS analysis, the ‘flavour foodstuffs’ market may have the potential to take significant market share from traditional intense flavours, although the market is still relatively small. The global market for natural flavour materials stands at about 185,000 tonnes, the market researcher found, and is forecast to grow at about 3% a year to 2016.

“It is not a huge market value-wise, but it is a huge market volume-wise,” Rice said, adding that even traditional flavour houses are showing increased interest in natural flavour materials.

“It is quite significant but we are not predicting an overnight change in the flavours industry.”

He added that flavours of this kind may also serve as natural colouring materials, further blurring the definition of the market.

“For example, a soft drink might have raspberry pulp to add flavour but by the nature of the product, it provides colour as well. Colour becomes a grey area and flavour becomes a grey area,” he said.

As for the most popular sectors for natural flavour materials, soft drinks are by far the dominant category, accounting for 87% of the total food and drink market, while baby food and pet foods are also very fast-growing, according to Rice, followed by meat products and breakfast cereals and bars.

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