THE MARKET FOR
FLAVOURS & F L A V O U R TR E N DS
PROGRAMME Outlook for food & drink The market for flavours Flavour forces Natural versus synthetic Opportunities
ingredients & trends
measure, analyse & forecast
research to solutions
Outlook for
food & drink
Food & drink $5.1 trillion
Global market for food & drink • Industrially produced food & drink • Retail and foodservice • Global = circa 50 main countries • All values at consumer prices • Growth rates = annual averages (CAGR)
Source: RTS Resource from RTS database
The global market for food & drink Global: Consumer expenditure on food & drink by region, 2009
WESTERN EUROPE
$1,661
NAFTA
$1,072
EASTERN EUROPE
billion
$472
billion
billion
AFRICA & MIDDLE EAST
$242 CENTRAL & SOUTH AMERICA
$463
ASIA PACIFIC
billion
$1,160
billion
billion
Global market for food & drink = $5.1tr Source: RTS Resource from RTS database
The global market for food & drink Global: Growth in consumption of food & drink by region, 2004 to 2009 (CAGR)
WESTERN EUROPE
0.5%
NAFTA
1.5%
EASTERN EUROPE
1.8%
AFRICA & MIDDLE EAST
1.7%
CENTRAL & SOUTH AMERICA
ASIA PACIFIC
3.5%
1.4%
Global volume growth rate = 2.3% Source: RTS Resource from RTS database
The global market for food & drink Global: Growth in food & drink by key segment, 2009
Breakfast cereals & bars Ready meals Baby foods
volume value
Yogurt & desserts Meat & savoury products Confectionery Soft drinks Ice cream & frozen desserts 0%
2%
4%
6%
8%
Source: RTS Resource from RTS database
The market for
flavours
the market for flavours Global: Market value of flavours in food & drink, 2009
WESTERN EUROPE
$1,879
NAFTA
$2,387
EASTERN EUROPE
million
$577
million
million
AFRICA & MIDDLE EAST
$217 CENTRAL & SOUTH AMERICA
$454
ASIA PACIFIC
million
$1,188
million
million
Global market for flavours = $6.7
billion
Source: RTS Resource from RTS database
Global - key sectors for flavours Global: Market value of flavours by key segment, 2009
Beverages
$2,083m
Dairy spreads & ice cream
$1,353m
Snacks & confectionery
$925m
Bakery
$867m
Meat meals & savoury Culinary Other
$m
$760m $334m $379m
Source: RTS Resource from RTS database
The importance of
trends
Trends drive growth 4.0% Confectionery
16.2% Ethical
4.4% Dairy
4.6% Baked goods
13.6% Wellness
7.1% Food to go
5.0%
6.1%
Fruit & vegetables
Convenience
Flavour forces
flavour forces Healt h & wellb eing
s d n Tre
Enh anc ers
s e t s Ta
s e n i Cuis
Trends • Recession • Media • Aspirational vs austerity • Convenience • Immigration • Provenance • Flexibility
s d n e r T
Health & Wellbeing • Natural • Clean label • Health • Mood • Beauty
Healt h & wellb eing
health & wellbeing
Beauty
Still a relatively small but growing trend in Europe and US, more developed in Japan
Mood Could tie in with current consumer need for comfort in tough times
Tastes • Hot & spicy • Intense • Florals • Cool • Limited editions • Authenticity • Indulgence
g n i g Chan es tast
tastes Florals - geranium, rose, hibiscus, lavender, honeysuckle
Hot & Spicy - exciting new flavour experiences
Cool - refreshing tastes
also INTENSE flavours consumers are looking for stronger, more defined taste experiences
tastes Limited Editions
Authenticity
- new/limited/seasonal editions to keep consumer interest and trial new formulations
- ingredients and products that recreate the unique flavours of a country or region
Provenance is key
Indulgence - affordable luxuries
Cuisines • Malaysian • Vietnamese • Middle Eastern • Scandinavian • Eastern Europe • Fusion blends • Chinese/Indian Creole/African American/Mexican
s e n i s i u C
Cuisines
Fusion
Malaysian coconut, chilli, galangal, lemongrass, shrimp paste, lime
Moroccan Ras-el Hanout, rose, lemon, pomegranate
Scandinavian juniper, dill, ligonberry, horseradish, hot-smoked fish
Vietnamese layered flavours, coriander, lemongrass, fish sauce, dipping sauces
Asian-French, Chinese-Indian, Scandinavian-French, French-African (Creole)
Cuisines
Enhancers
Enh anc ers
• Salt & sugar flavour enhancers • Cocoa enhancers/natural honey replacers • rising material costs
• Fat enhancers • Masking flavours
Natural synthetic versus
EU(15) market for flavours • Total market worth €1.3bn • 62,000 tonnes of flavouring materials • Has been growing at 3.4% year-on-year • Growth forecast to slow to 1.6% per year in value (uninflated).
flavour usage by segment Western Europe: Share of value of flavours by segment, 2009
Meats & sav 12%
Culinary 5%
Other 6%
Snacks & Conf 14%
Dairy, spreads, ice 20%
• Beverages 31% • Dairy 20% • Snacks 14%
Bakery 13%
Source: RTS Resource
Beverages 31%
• Bakery 13%
flavours by country Western Europe: Share of value of wellness foods by benefit, 2009 Others 15%
France 14%
Germany 24%
UK 23%
• Germany 24% • UK 23% • France 14% • Spain 10%
Spain 10% Source: RTS Resource
Neth 5%
Italy 9%
Natural versus synthetic • From 20 Jan 2011, legislation will do away with the distinction between ‘nature identical’ and ‘synthetic’ flavourings, meaning that all nonnatural flavourings will simply be called ‘flavouring substances’.
Natural versus synthetic • Meanwhile, natural flavourings can be labelled in one of four ways, depending on their precise make up: !
‘natural flavouring’;
!
‘natural flavouring substances’;
!
‘natural (strawberry) flavouring’ and
!
‘natural flavouring (strawberry) with other natural flavours’.
Natural versus synthetic • For named natural flavours, (natural strawberry flavour) 95 per cent of the flavour must come from the named source. • However when natural flavours are used with other named flavours – for example ‘natural strawberry with other natural flavourings’; those ‘other natural flavourings’ may not be strawberry derived.
flavours: synthetic v natural Western Europe: Value of flavours in food & drink, 2009
â‚Ź726
million
million
Synthetic flavours
Source: RTS Resource
â‚Ź570
Natural flavours
flavours: synthetic v natural forecast Western Europe: Value of flavours in food & drink, 2014
â‚Ź731
million
Synthetic flavours
Source: RTS Resource
â‚Ź671
million
Natural flavours
usage of natural flavours Segment
!m 2009
Beverages
156
Dairy, spreads, ice cream
117
Bakery
96
Meat, meals, savoury
93
Snacks & conf.
47
Culinary
29
Other foods
32
TOTAL Source: RTS Resource
570
forecasts: natural v synthetic & NI flavours Annual average growth, 2009 - 2014, uninflated
Natural
Synthetic & NI
6% 5% 4% 3% 2% 1% 0% -1%
Bev Source: RTS Resource
Dairy
Snacks
Meat
Bakery Culinary Other
growth opportunities growth in values 2009 to 2014 (€m)
Synthetic & NI €1
Bev Dairy Snack
Natural Flavours €32
Bev
-€4
€17
Dairy
€1
Meat
€2
Meat
Bakery
€2
Bakery
Culinary
€2
Culinary
Other
€2
Other
Source: RTS Resource
€14
Snack
€11 €19 €3 €5
natural flavours 1. New legislation will help to identify “naturals� 2. Becoming increasingly developed & used 3. Greater opportunities for growth 4. Stability can be a major issue 5. Beverages main user 6. Usage of flavours remains diverse and fragmented
Opportunities
opportunities by segment 1. All types of natural flavour 2. Usage in baked goods 3. Confectionery 4. Snacks 5. Beverages 6. Pet Food
opportunities 1. Global industrial production of food & drink is driving increased use of flavours 2. Need to target growth ‘trends’ to maximise profitability 3. Opportunities for increasing flavour usage - even in mature markets 4. Understanding multiple, complex and evolving ‘Flavour Forces’ 5. Opportunities for naturals especially in baked goods, snacks, confectionery & beverages
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Flavours Report published October 2010