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Key Note estimates the UK market for food
ingredients to have been worth £626m at manufacturers' selling prices
(msp) in 1995, a 9.4 percent increase on 1991. In real terms, however, growth has been
more elusive, with the market only rising by 1 percent.
The report focuses on
the supply of flavourings and ingredients to food manufacturers. The major
product groups are emulsifiers and stabilisers, flavours, yeast and enzymes,
acidulants, colours and sweeteners.
The health of the ingredients
industry is closely linked to that of the overall food industry. While people
are eating more processed and convenience foods than ever before, the prices
paid have remained low. The early 1990s was a time of recession, and since
then, supermarkets have embarked on a price war which has squeezed
manufacturers and their suppliers, including the food ingredients industry.
Factors influencing the wider food market have repercussions for the
ingredients industry. The increasing number of working women, for example, has
given a boost to convenience foods of all kinds, as women now have less time to
shop and prepare meals for the family. Indeed, family-based households are in
decline, with 27 percent of households now containing only one person; for these
people too, convenience foods are simpler than cooking for one.
As part
of its drive to reduce levels of heart disease, the Government has set out
healthy-eating guidelines. Manufacturers have reacted by creating low-fat
versions of standard ranges, or reducing the levels of salt and sugar in their
food and drinks. Growth in prepared ethnic dishes has benefited the flavours
market, while more healthy foods have used an increasing amount of intense
sweeteners and cereal products as bulking agents and fat replacers.
During 1996, the industry will need to adapt to the impact of several
European Directives which have been enacted in British law and which took
affect from the start of the year. These Directives cover colours, sweeteners
and other miscellaneous food additives. In each category, permitted lists have
been drawn up, along with maximum levels allowed for use.
Future food
trends are likely to see more health foods and vegetarian foods. Functional
foods -- those with added ingredients to promote particular health benefits --
could be a major new market in the second half of the 1990s.
Text © 1997 Key Note
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Last updated by Duncan Nottage 5th March 1999