food additives sector needs to go natural - farrelly mitchell · the global market for food...

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Food Additives Sector Needs to go Natural Food firms need to balance the advantages of food additives against the perception that these ingredients are harmful to the consumer. On the one hand, additives offer improved prices, product quality, consumer acceptance and shelf-life to processors and retailers. On the other hand, the sector must increasingly consider consumer fears that these ingredients could have potentially harmful effects. Insights: December 2015 Global Market Food additives are substances that are added to food during processing or storage. The European Union permits more than 363 different additives, which have 23 recognised uses. On a global basis, food additives are segmented by product type, including flavours and enhancers; sweeteners; enzymes; colorants; emulsifiers; food preservatives; and fat replacers. Most food additives have little or no nutritional value. The global market for food additives is expected to exceed $30 billion by the end of 2015. Most of the transactions are business-to-business deals, yet as a sector it receives a lot of attention from consumers. According to a Transparency Market Research report, Europe held the largest market for food additives in 2014, however, it is projected that Asia Pacific will hold the largest market by 2021. The flavours and enhancers sector has the largest market share, followed by fat replacers and sweeteners. The E-number system for food additives was introduced in the 1960s – the E stands for European – and was intended to reassure consumers that additives were safe. From the 1980s onwards, all ingredients had to be listed on product labels. Manufacturers were allowed to use either the name of the additive, or to use the number of the additive on the ingredient list. Many chose to use the E numbers, to save space on the ingredients label. Stephanie O' Callaghan, F&B Consultant, Farrelly & Mitchell ‘‘The global market for food additives is expected to exceed $30 billion by the end of 2015. Email: [email protected]

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Page 1: Food Additives Sector Needs to go Natural - Farrelly Mitchell · The global market for food additives is expected to exceed $30 billion by the end of 2015. Most of the transactions

Food Additives Sector Needs to go Natural Food firms need to balance the advantages of food additives against the perception that these

ingredients are harmful to the consumer. On the one hand, additives offer improved prices, product

quality, consumer acceptance and shelf-life to processors and retailers. On the other hand, the sector

must increasingly consider consumer fears that these ingredients could have potentially harmful effects.

Insights: December 2015

Global MarketFood additives are substances that are added to food during processing or storage. The European Union permits more than 363 different additives, which have 23 recognised uses. On a global basis, food additives are segmented by product type, including flavours and enhancers; sweeteners; enzymes; colorants; emulsifiers; food preservatives; and fat replacers. Most food additives have little or no nutritional value.

The global market for food additives is expected to exceed $30 billion by the end of 2015. Most of the transactions are business-to-business deals, yet as a sector it receives a lot of attention from consumers. According to a Transparency Market Research report, Europe held the largest market for food additives in 2014, however, it is projected that Asia Pacific will hold the largest market by 2021.

The flavours and enhancers sector has the largest market share, followed by fat replacers and sweeteners.

The E-number system for food additives was introduced in the 1960s – the E stands for European – and was intended to reassure consumers that additives were safe.

From the 1980s onwards, all ingredients had to be listed on product labels. Manufacturers were allowed to use either the name of the additive, or to use the number of the additive on the ingredient list. Many chose to use the E numbers, to save space on the ingredients label.

Stephanie O' Callaghan, F&B Consultant, Farrelly & Mitchell

‘‘The global market for food additives is expected to exceed $30 billion by the end of 2015.’

Email: [email protected]

Page 2: Food Additives Sector Needs to go Natural - Farrelly Mitchell · The global market for food additives is expected to exceed $30 billion by the end of 2015. Most of the transactions

Insights: December 2015

‘‘Over time, the choice of which additive to use as an ingredient in a product became less influenced by its chemical role and increasingly influenced both by legislation, food activists and media’’

Figure 1: Model for Assessing NOEL standards in the testing of food additives. Source: WHO

During this period, some publications suggested that consumers should be suspicious of these additives. The E-number became identified, not as a mark of safety, but as a threat and a source of controversy. This is despite the fact that these E-numbers are tested and monitored by the WHO, which establishes a ‘no observed effect level’ (NOEL) of testing as the standard for safe food additives.

Figure 2: Food additives and the health controversy to which they were linked (Source: Food Chemical Safety—volume 2: Additives: David H. Watson)

External InfluencesThe industry faced reports which suggested that various food additives led to the formation of cancer-causing compounds; induced respiratory conditions; were linked to hyperactivity in children; or could even cause brain damage.

Over time, the choice of which additive to use as an ingredient in a product became less influenced by its chemical role and increasingly influenced both by legislation, food activists and media.

E number Name Controversy

(E249-E252) Nitrites Formation of cancer-causing compounds

(E220-228) Sulphites Induction of respiratory conditions

(E102) Tartrazine-containing colourings Linked to hyperactivity in children

(E621) Monosodium glutamate Is an excitotoxin causing brain damage

(E951) Aspartame Linked to mood swings and neurological problems

1. Determine structural class

2. Can the substance be predicted to be metabolized to innocuous products?

B3. Do the conditions of use result in an intake greater than the threshold of concern for the structural class?

A3. Do the conditions of use result in an intake greater than the threshold of concern for the structural class?

Substance would not be expected to be of safety concern

Additional data required

B4. Does a NOEL exist for the substance that provides an adequate margin of safety under conditions of intended use, or does a NOEL exist for structurally related substances that is high enough to accommodate any perceived difference in toxicity between the substance and the related substance?

A4. Is the substance or its metabolites endogenous?

Yes No BA

A5. Does a NOEL exist for the substance that provides an adequate margin of safety under conditions of intended use, or does a NOEL exist for structurally related substances that is high enough to accommodate any perceived difference in toxicity between the substance and the related substance?

B5. Do the conditions of use result in an intake greater than 1.5 μg/day?

Substance would not be expected to be of safety concern

Substance would not be expected to be of safety concern

Data must be available on the substance or a closely related substance in order to perform a safety evaluation

No

Yes

Yes

No

YesNo

Yes

No

No

Yes

Yes

Page 3: Food Additives Sector Needs to go Natural - Farrelly Mitchell · The global market for food additives is expected to exceed $30 billion by the end of 2015. Most of the transactions

Insights: December 2015

As a result, some natural additive products are showing growth at the expense of synthetics.

There is rising demand for fat replacers and sweeteners in the weight control market, while antioxidants functional food ingredients are thriving. This trend is being broadened to avoid using anything the consumer might consider to be additives, particularly those linked to colors and preservatives. Several food and beverage giants - including General Mills, Nestle, Hershey and Kraft – have announced that they will be removing artificial dyes and flavors from their products.

The FutureIn the future the processing and retail industry will have to pay even more attention to food additives and – rather than taking a technical or regulatory approach to food additives – should consider the consumers’ desire for attractive and tasty food products, which include the minimum of additives.

‘‘Several food and beverage giants - including General Mills, Nestle, Hershey and Kraft – have announced that they will be removing artificial dyes and flavors from their products’’

Page 4: Food Additives Sector Needs to go Natural - Farrelly Mitchell · The global market for food additives is expected to exceed $30 billion by the end of 2015. Most of the transactions

Contact Details: Farrelly & Mitchell

Head Office:

Malachy MitchellManaging Director

Unit 5A Fingal Business ParkBalbrigganCo. DublinIreland

Tel: + 353 1 690 6550Fax: + 353 1 883 4910Mobile: + 353 86 806 0843Email: [email protected]

Middle East & Africa Office:

Mohammed HajjarRegional Director

Al-Rusais BuildingSuite 5106468 Al-Ulaya Road - Al UlayaRiyadh 12211-3857Kingdom of Saudi Arabia

Tel: + 966 1 4634406Mobile: + 966 54 338 7199Email: [email protected]

www.FarrellyMitchell.com

Insights: December 2015

Disclaimer:The information in this article is intended to give information in general nature, great efforts has been exerted to ensure the accuracy of this data at the time the article was written Farrelly & Mitchell Business Consultants Ltd. and its Branch offices or affiliates does not provide any implicit or explicit guarantees on the validity, timing or completeness of any data or information in this article. Also we assume no responsibility on the appropriateness of the data and information for suiting any particular purpose or reliability in trading or investing.

Please note: Unless provided otherwise and in writing from us, all information contained in this article, including logo, pictures and drawings, are considered property of Farrelly & Mitchell Business Consultants Ltd.

© Farrelly & Mitchell 2015