23 minute read
Making bold statement with food colors
FOOD INGREDIENTS
NEW TECHNOLOGIES AND MARKET TRENDS IN THE FORMULATION OF FOOD & BEVERAGE PRODUCTS
Making bold statement with food colors
The first few seconds after a buyer sees a product is a moment of truth; as it can be love at first sight convincing the buyer to add it to their basket or make them trudge forward in search of an alternative that is more appealing.
By Catherine Wanjiku
Color is a major part of a buyer’s decisionmaking process, and not just because it’s visually stimulating, it can also tease anticipated flavours or give impression about the freshness or quality of a product. Food colouring is therefore a very important tool for food producers as it acts both as a quality control sign and as a marketing tool to create temptation for the consumer. According to a study by Emerald Insights, 90% of shoppers decide whether or not to buy a product solely based on color and perceived taste. “We ‘eat with our eyes’ and if it looks good, we expect it to taste good and do us good. Each color has its own set of associations and meanings depending on the context, and small variations can make all the difference in how something is perceived,” says Nathalie Pauleau, global product manager for natural colors at Givaudan.
Originally, food colors were used to correct loss, variations or enhance colors in food products. The rise in food processing coupled with consumer preference
for packaged foods, boosted adoption of food colors to connote the perceived flavour offering in the wide array of offering. For instance, off-white in ice cream was linked to vanilla flavour while bright red or pink color in
cordials showcased strawberry flavour. With research and development efforts taking wings in the food industry, use of food color has also metamorphosised to not only enhance color, show case flavour but link to consumer’s metal concepts dictated by experiences, environment, and cultures. For instance, yellow is often associated with positivity and reassurance and, when used alongside ingredients like citrus and turmeric, it can have positive associations with energy, good digestion and benefits for inflammation. “Color can send out any number of messages about brands and products. It might signal a moment of blissful escapism, tell stories about origins and process, showcase powerful ingredients, or help to highlight healthy formulations,” remarks Jill Janssen, market development specialist.
Color trends are ever-changing, and as the industry matures there is a move beyond simply using color for enhancement or denotation of flavour, to use of targeted and customized approach as the world becomes more diverse and more inclusive. This has inspired the industry to innovate toward more visually appealing products with a variety of meanings across different cultures, situations and product categories including meat, dairy, baked goods, confectionery, beverages, oils & fats, among many others. The burgeoning growth has made the food color market a multi-billion-dollar sector with Markets and Markets highlighting it was valued at US$ 4.287 billion in 2021. It is projected to reach US$5.386 billion by 2026, recording a CAGR of 4.7% during the forecast period.
NOT TRADING HEALTHY FOR PRETTY
Food colors are broadly classified into artificial colors which are synthetically produced, natural colors made from natural raw materials, and coloring foods which are minimally processed and e-number free. While artificial or synthetic pigments have been preferred by formulators for a long time due to their vibrant coloring, shelf stability, wide variety, ease of application, availability and affordability, growing customers’ commitment to health and wellness, is encouraging developments of the natural colors category, phasing out the former.
According to an online consumer survey conducted
WHILE ARTIFICIAL COLORS HAVE BEEN PREFERRED BY FORMULATORS FOR A LONG TIME, GROWING CUSTOMER COMMITMENT TO HEALTH AND WELLNESS IS ENCOURAGING DEVELOPMENT OF NATURAL COLOURS.
THE BAN OF TITANIUM DIOXIDE IN EU HAS FORCED CHOCOLATE MANUFACTURERS TO SEEK ALTERNATIVE WHITENERS
from 2015 to 2020 by Sensient Technologies, the percentage of the general populace concerned about artificial colors was 46% in 2020, a 12% increase from 2015. This trend, according to a report featured on Institute of Food Science Technology, has been triggered by publications such as the Southampton study in 2007, which established a correlation between synthetic food colorants and hyperactivity in children. Additionally, the California Office of Environmental Health Hazard Assessment also undertook a health effects assessment concluding that synthetic food dyes can have adverse neurobehavioral effects on children. As a consequence of these scientific findings, the demand for natural colorants has skyrocketed. Further to that, the recent ruling that titanium dioxide was no longer permitted for use in food and beverages in the European Union, initiated a paradigm shift within the food industry from synthetic colors to natural colors. In 2021, IMARC group valued the global natural food colors at US$1.8 billion. It expects the market to reach US$2.5 billion by 2027, exhibiting a CAGR of 6.38% during 2022-2027.
Natural food colors are sourced from vegetables, fruits, plants,
minerals, and other edible natural sources. For yellow and orange tones, there are carrots, pumpkins, paprika, achiote African sorghum and Thai starfruit; for festive pink shades, there are sweet potatoes; while dazzling purple shades are derived from purple carrots and berries. Stimulating greens and cool blues are derived from spirulina, and for shades of red there are black carrots, beets, rubired grapes, ancient grain amaranth, sweet potato and South American shrub achiote.
With the widening pool of raw materials, global food and beverage launches with natural food colors rose by 15.2% in CAGR from 2012 to 2016. To meet the growing demand, leading manufacturers have been beefing up their capacities through mergers and acquisitions of industry peers. In 2018, USA based Sensient Technologies acquired Peruvian GlobeNatural. Oterra, formerly known as Chr. Hansen Natural Colors acquired Secna Natural Ingredients Group and Symrise’s Diana Food’s coloring business in 2021 under its new owner, private equity firm EQT. In the same year, Givaudan completed the acquisition of DDW, the color house, becoming the number two global player in natural colors.
MORE ROOM FOR INNOVATIVE NATURAL FOOD COLORS
Despite the rise in use of natural food colors, the colors based on agronomy selection can take years to bring to market, are highly unstable in their native state and can easily be altered by factors such as chemical structure, temperature, light, oxygen and pH.
KEY NUMBERS
US$ 4.29B
ESTIMATED VALUE OF THE GLOBAL FOOD COLORS MARKET IN 2021
However, each type of natural color, depending on its original source, will react differently to different environments. In the style of Roman Goddess Cardea, seeking new ways and walking through new doors, Sensient’ s Cardea range was developed to unlock nature’s true potential. The Cardea coloring solutions are, through their unique composition, naturally protected against parameters such as oxidation and fading to safeguard colouring performance.
Meanwhile, with natural colors also faulted for being dull, ADM in 2019 launched new micronized color powders made from colouring foodstuffs and paprika extract, expanding its WILD Rainbow Range. The new micronized color powders are made up of particles that are much smaller than conventional color pigments, increasing their opacity giving food and beverages striking and consistent colouring.
In pursuit of more color intensity, GNT introduced the Exberry Fiesta Pink Micronized Powder in 2020. The product, according to the company is pH-independent, offers good light stability and has a 24-month shelf life below 25⁰C. “Exberry Micronized Powders were developed to deliver optimal performance in applications such as solid mixes, where they can achieve more vibrant colors at lower dosage levels compared to standard powders. With the launch of our stunning Fiesta Pink micronized powder, manufacturers are able to choose from an even wider range of shades,” said Sonja Scheffler, product manager at GNT.
Even by ticking all boxes, with today's consumers, natural colors are not always enough. Consumers demand that natural colors are not only safe to eat but also utilize recognizable ingredients and meet their lifestyle choices such as sustainable living, specific dietary requirements and conscience well-being.
For a while, carmine played a role as a suitable substitute to Red 40, one of the most commonly used "artificial" red food dyes. However, while carmine isn’t synthetic, since it is derived from the cochineal beetle, it may not align with vegetarian, kosher or halal diets, triggering an “ick” factor. According to Food Dive, in 2012, Starbucks faced backlash when consumers discovered it had replaced synthetic reds with the insect extracts in its Strawberries & Creme Frappuccino and strawberry banana smoothies. Chr. Hansen prior to renaming of its natural colors division to Oterra, unveiled the Hansen sweet potato™, a natural red color alternative to carmine and synthetic reds to satisfy the discerning consumers. The new vegetable variety from Ipomoea batatas was developed using traditional breeding methods to create the long-sought after vibrant, natural red color for use in food and beverage applications.
Players have also bootstrapped their research and development efforts to introduced organic food colors, a natural progression of the clean label trend. Diana Food North America, part of Germany’s Symrise Group, introduced a line of organic, non-GMO and sustainably sourced colors for foods and beverages in 2019. The company notes that it avoids the use of the chemicals and additives in the growth of the raw materials themselves.
TABLE FOR TWO: MY SMARTPHONE AND ME
With color being a visually stimulating additive, consumers demand vibrant, eye-catching food colors that authentically illustrate nature’s brilliance. Research suggests as many as 69% of Millennials regularly take a picture or video of their food before they eat it. In correlation to this, Innova Market Insights Trends Survey (2018) found that 55 percent of Chinese consumers, 43 percent of US consumers and 24
percent of UK consumers aged 26-35 years share pictures of their food online once a week or more. This practice has gone vogue with the market researcher listing “Connected to the Plate” as a key top ten trend for 2019, noting that “never in history have we been more connected to the plate in front of us.”
As food and beverage posts on social media platforms like Instagram and Pinterest climb into the billions, Krahl at
Lorraine Jansen, GNT Content Marketing Specialist
SWEET POTATO FLESH IS A GREAT SOURCE OF NATURAL COLORS
Sensient Colors Europe GmbH, has highlighted that food sharing online will influence both the color and flavor of new product development saying, “The visual appearance of food is becoming ever more important with people often sharing food product images on social media such as Instagram. Combined with consumers looking for increasingly different taste experiences and the popularity of authentic ethnic flavors, greater authenticity of foods visual appearance is demanded.” To meet this need Sensient has expanded its range of natural colors and colouring foods with vibrant shades of yellows, oranges and reds in its new Pure-S™ Natural Color range.
While bright and bold may be best on Instagram, manufacturers need to remember that many consumers are still looking for natural products and what's more, products that look natural. “Coloring Foods can deliver vibrant, Instagrammable shades from across the rainbow, while maintaining clean and clear labels. As a result, it’s possible to create head turning products without compromising on their appeal to shoppers,” Lorraine Jansen, GNT’s Content Marketing Specialist, told FoodNavigator. In 2019, the Netherlands-based food colors maker expanded its Exberry natural colors range with new blue powders derived from spirulina, providing a jaw dropping intense blue hue.
CAPTIVATE CONSUMER IMAGINATION
With bright and vibrant colors finding liking among the social media-oriented society, one might wonder where is the place for bold colors with earthy tones? Nathalie Pauleau, global product manager for natural colors, Givaudan reveals that, as plant-based beverages and meat analogs continue to rise, so does the demand for toned shades of browns and reds in meat substitutes, white and orange for fish analogs and yellow in dairy-free products.
Natural colors are fundamental in the plant-based segment too as the base materials used to create the meat or dairy alternatives are not always appetizing shades or indicative of their imitating flavor. “Consumers are expecting these products to be really similar to normal meat in taste, appearance, texture. If you want to mimic beef, the color must be pink or red before the cooking process and brown after,” says Antoine Morel, colors product manager at Diana Food (part of Symrise Nutrition).
Diana Food is among the companies using red beet for this purpose, and Morel says it has been widely accepted by consumers for its natural browning reaction to heat. “As one of our core areas of expertise, we have created solutions to enhance and capitalise on this effect,” he explains. “This enables us to color vegetarian and vegan burgers that can be cooked rare, medium or well done with the color changing appropriately.”
Sensient, meanwhile, customises meat analogue solutions ‘for individual needs based upon aesthetic goals and manufacturing processes. “In a market with increasing new product development going on, color is equally used to differentiate flavour and special seasonings in meat substitute products,” says Pat Hanson, general manager Sensient. “Warm brown from Sensient’s Natural Brown range can support the barbecue concept in a chicken-like product, while a bright red-orange blend works well in spicy ‘chicken’ curry.”
Of course, visuals are just one aspect of the consumer experience. Other senses come in to play. “To take it to the next level, ADM’s food color experts also ensure that authentic browning comes alongside rich aromas, a great sizzle and a texture that evolves from raw to tender the way traditional meat would,” says Emina Goodman, senior director of colors at ADM. Emina further highlighted that color
from natural sources go hand-in-hand with plant-forward foods. “Many shoppers consider plant-based offerings better for their health and better for the environment, and they expect to see other ingredients derived from plants, beyond just proteins, used in these products,” she affirms. Around 95 percent of new colored alternative product launches contain color solutions from natural sources, and more specifically, from plant-based sources FBA
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UPDATE ON INVESTMENTS OPPORTUNITIES & MARKET TRENDS IN AFRICA'S FOOD & BEVERAGE INDUSTRY Report
Adding some fizz to Uganda's throats
Leading soft drinks players adopt innovation and creativity to remain relevant in an increasingly competitive environment
By Paul Ongeto
Once dominated by a duopoly of Century Bottling Company (bottler of Coca-Cola) and Crown Beverages (the franchise bottler for Pepsi), Uganda’s soft beverage industry is today one of the most competitive in the region. Entry of new players most notably Riham, Fizzy and Azam is reshaping the beverage landscape in the country, creating new competition for established players and accelerating market expansion.
The soft beverage industry in Uganda is however having to contend with new challenges ranging from shifting consumer tastes and preferences to inflation which is straining consumer budgets and affecting sales. Industry players from Crown beverages to Riham are however staying
at the head of the curve, investing in new technologies and product innovation to keep consumers coming back for more. Confident of the market’s performance, Market Research projects the soft drinks market to register a compounded annual growth rate (CAGR) of 11.75% per annum for the period 2020-2025. At the end of the forecast period, Uganda’s soft drinks market is forecast to reach US$470.45 million (in retail prices), according to Market Research.
NEW ENTRANTS BREAK THE COCA-COLA-PEPSI DUOPOLY
The entry of three beverage firms namely Riham, Azam and Fizzy between 2011 and 2012 lifted the lid off a market that had operated like a semi-monopoly for more than three decades and ended an era of wild growth and huge profits that the two beverage giants enjoyed. The list of new entrants continues to grow by the day even putting more pressure on Century Bottling now known as CocaCola Beverages Africa-Uganda (CCBA Uganda) and Crown Beverages. Paddy Muramiira, CEO of Crown Beverages Limited, blames PET bottles for the misfortune that his company currently finds itself in.
“The introduction of PET liberalized the soft drink sector,” Muramiira said in an interview with Macropolis. “Now, there are a number of players that come and go. It is easy entrance, easy exit. That has caused the sector to become more competitive than ever before despite the adverse effects of indisciplined PET disposal to the environment.”
With competition comes the inevitable reality of price wars. Riham, securing an easy entrance through PET, priced its 320ml PET bottle at Shs1,000 (US$0.4) and quickly gained an edge over Coca-Cola and Pepsi whose cheapest 300ml returnable glass bottled products were also selling at Shs1,000. “Immediately Riham hit the market, our sales dropped from 70 cartons a day to an average of 60 cartons per day,” confessed Rashid Kagoye, a manager at Agma Holdings Ltd, a Coca-Cola depot in Kampala. Coca-Cola responded to Riham’s incursion by slashing the price of its 300ml glass bottled soda from Shs1,000 to Shs800 (US$0.32) while the 350ml plastic-bottled Ka-Mini soda was cut from Shs1,500 (US$0.6) to Shs1,000. Both CocaCola and Pepsi cut the prices for the 500ml and one-litre plastic bottled sodas from Shs2,000 (US$0.8) to Shs1,500 and from Shs3,000 (US$1.2) to Shs2,500, respectively. Although price cuts were advantageous to consumers
THE INTRODUCTION OF PET LIBERALIZED THE SOFT DRINKS SECTOR. NOW, THERE ARE A NUMBER OF PLAYERS THAT COME AND GO. THAT HAS CAUSED THE SECTOR TO BECOME MORE COMPETITIVE.
Paddy Muramiira, CEO Crown Beverages Limited
who at the time paid relatively lower prices for sodas, they greatly impacted manufacturers, eating into their profits and in turn reducing taxes to government.
PRODUCTION INNOVATION BECOMES THE NEW BATTLEGROUND FOR MARKET SHARE
Price wars being unsustainable in the long term, players in Uganda’s beverage sector have turned to product innovation to attract more customers. CCBA Uganda has been a leader in this field. The company in 2018 stepped into the flavored milk market with the launch of Climb Up Milk while in 2021 the company expanded its portfolio of non-carbonated beverages with the launch of Ades nutribushera, a plant-based beverage which is a modification of the traditional drink made in Ugandan households with millet. The company also expanded its Minute Maid with the launch of Fruity Boost Mango to offer consumers more variety in the juice category. Coca-Cola’s launches tapped into consumer demand for healthy and sustainable products. In Uganda, consumers preferences have shifted to more natural products with “clean label”, including fermented drinks, teas, lower sugar beverages and fortified drinks with health benefit claims, notes Market Research. “In fact, people are increasingly embracing the non-carbonated drinks, but the consumption of drinks with high-sugar content is rather occasionally than regularly, as they are perceived more as an indulgence.”
Not to be left behind, Riham, a new entrant, expanded its soda portfolio to include Skyview, what’s up, and Funtime brands to tap into increasing demand for low-cost carbonated soda beverages. This investment was in the right direction as carbonates account for 71% of East Africa’s soft drink consumption and are on track to keep growing, according to a report by Standard Bank, a major African bank. The beverage brand owned by Harris International also expanded into fruit juice with the launch of Oner brand.
AS COMPETITION INTENSIFIES, SOFT BEVERAGE COMPANIES HAVE BEEN EXPLORING OPPORTUNITIES IN THE BOTTLED WATER MARKET WITH THE ALL THE THREE LEADING COMPANIES NOW HAVING A BOTTLED WATER LINE.
RIHAM'S ONER FRUIT JUICE BRAND IS TARGETED AT HEALTH CONCIOUS CONSUMERS
Oner is targeted at health-conscious consumers who prefer low sugar drinks. With the pandemic accelerating shift towards beverages perceived as healthy, Riham also launched oner apple juice with no-added sugar to bring more consumers to its fold. The company has also explored the energy drink sector with its Rock Boom brand whose market success forced Crown beverages to respond with its own Sting energy drink. The makers of Pepsi also expanded the soda range with a new Pepsi Max a low-calorie and sugar-free cola. The soda launched in 2021 was targeted at consumers conscious of their daily sugar intake and was meant to rival Coca-Cola’s zero sugar variant Coke Zero which had been in the market since 2017. Century Bottling CEO Muramiira notes that new entrants have helped Uganda’s soft beverage market to grow. “The total industry has moved from about 20 million cases 10 years ago to about 60 million cases now and there is still good potential for more growth,” he revealed.
Market Research, in its research, projects that in the next five years, Uganda’s soft drinks market will grow at a CAGR of 8.31% per annum, presenting further opportunities for new and existing players.
WATER BOTTLING, THE NEXT GROWTH FRONTIER
As competition intensifies, soft beverage companies have been exploring opportunities in the bottled water market. All the three leading soft beverages namely CCBA Uganda, Crow Beverages and Riham have bottled water brands in the Ugandan market. To bolster its market presence, Riham partnered with French packaging equipment supplier Sidel in 2013 to install a new Combi PET bottling line with capacity of 16,000 bottles per hour. Crown Beverages responded in 2017 with its Nivana water. Not to be left out of the water rush, Coca-Cola Beverages Africa (Uganda) in 2019 commissioned a US$10 million Natural Water production line for its Ruwenzori water brand. To extend its lead in the water market, early adopter Riham unveiled, in 2021, a new premium water brand dubbed ‘Krystal Natural Mineral Water’. A few months later Crown Beverages responded with a new plant with two dedicated water processing lines and unveiled a new 20 litre jumbo size bottle of its Nivana water brand. All these investments are aimed at diversifying product portfolio from the highly competitive CSD market. Bottled water is also being embraced by more Ugandans for convenience and hygiene reasons and thus presents the greatest prospect for soft beverage companies. Market Research projects that the Uganda bottled water market which was equal to US$89.00 million (calculated in retail prices) in 2015 will reach US$323.01 million (in retail prices) in 2025, increasing at a CAGR of 10.62% per annum for the period 2020-2025. Unlike CSD, this market is also very competitive, having more than 40 licensed water bottlers as of 2012. Riham, Century Bottling, and CCBA Uganda are capitalizing on their established distribution logistics, marketing capabilities, and higher technologies to establish market dominance. Water bottlers are also looking beyond Uganda. According to data from Bank of Uganda, driven by demand from neighboring countries, Uganda’s export earnings from bottled water jumped by 55 per cent in October 2021 to Shs12 billion (US$3.127 billion), the highest monthly record since 2013. South Sudan is currently the largest market for
KEY NUMBERS
60M
THE NUMBER OF SOFT DRINK BEVERAGE CASES THAT UGANDA PRODUCES IN A YEAR
CROWN BEVERAGE'S STING IS ONE OF UGANDA'S LOW COST ENERGY DRINKS
Uganda’s bottled water, but market players are projecting that DR Congo could in the near future become an even bigger market.
ATTRACTIVE GOVERNMENT INCENTIVES STIMULATE INVESTMENTS
Starting a business of any Kind in Uganda is relatively easy compared to its counterparts Kenya and Uganda. According to the world Bank, the country’s average cost of starting and running a small to medium sized enterprise in 2021 was valued at US$163, almost half the amount charged in Kenya (US$353) and Tanzania (US$322). Overall, the country ranked 12th in ease of doing business in Africa.
Sector specific incentives include an attractive 12% excise duty on beverages, which is significantly lower than the UN recommended tax of 20% on all sugar sweetened beverages. The highest rate in Uganda (15%) is charged on powder for reconstitution to make juice or dilute-to-taste drinks, excluding pulp. These alone make Uganda attractive to both local and foreign investors seeking to invest in the soft beverages sector. The chief executive officer of CCBA Uganda Jacques Vermeulen indicated how important the attractive tax regime was in informing the company’s decision to invest in a new bottling plant back in 2018. He said: “This [US$ 15 million] investment was made on a promise of reducing taxes (on soft drinks), from 13% excise duty to 12% in the 2018/19 financial year, and we are glad it was implemented. This is confirmation that a favorable tax regime can attract more investment for the industry.” Even with a low tax regime already in place, the beverage sector is still pushing for taxes to be reduced further to 10% to increase competitiveness of Uganda’s soft beverages in the East African market and allow beverage manufactures to expand production and create more jobs
Uganda also has a tax exemption on fruit and vegetable juice made from at least 30% of pulp and fruit from Uganda. The exemption is aimed at promoting the use of local raw materials in the production of beverages. Beverage manufacturers, particularly Coca-Cola, have exploited this opportunity and launched new products such as Ades Nutri-Bushera and Climb Up milk that are largely formulated with locally sourced products.
GROWING MIDDLECLASS TO DRIVE FUTURE GROWTH
Uganda’s middle class, composed of those with daily per capita consumption of US$4-$10, surpassed the 8 million mark for the first time in 2021 and is expected to show robust growth in the near future as the country works towards achieving a middle income status by 2025. This class which lives above the subsistence level and can save and consume non-essential goods has been the major driver of the beverage sector contributing greatly to consumption per capita which in value terms reached 1.83 USD per capita (in retail prices) in 2015, according to Market Research. As the middle class expands, the market research firms projects that average consumption per capita in value terms will grow at a CAGR of 7.95% per annum between now and 2025. This presents new opportunities for beverage players to grow their bottom line.
To gain an edge over competitors, beverage makers must however align with important trends on the carbonated soft drinks in Uganda which according to Standard Bank align with global trends in the sector. According to the bank, healthy and sustainable products will certainly rise in demand as empowered consumers demand goods that are both good for their bodies and the environment. In order to remain competitive, Market Research advises beverage makers to reduce their use of sugar and to include fortified carbonated soft drinks, as well as zero-calorie drinks in their portfolio. Coca-Cola and Pepsi already have an edge in these area with their zero calorie drinks. In addition, the number of people, who are paying attention to labelling is increasing. Thus, companies also need to focus on transparency and simplicity regarding information in order to gain customers’ trust.
Although competition still continues to squeeze revenues, established players believe that their brand equity will enable them to weather the storm in the long run. Crown Beverages CEO Paddy Muramiira is particularly not worried about these small players. “They come in and out quickly, so we are not worried.” Instead, Muramiira is focused on expanding the horizons of the Pepsi franchise in Uganda. He believes that opportunities for the industry to grow still exists despite incursions from competitors. “The driver for our anticipated growth is a high rate of population growth, a young population, political stability and improved business environment.” FBA
