Increasing incidence of health issues such as diabetes, obesity, and blood pressure is prompting consumers to maintain a healthy lifestyle. Thereby, they are more inclined towards the consumption of functional foods. Furthermore, with increasing penetration of the Internet and smartphones globally, consumers are engaged in finding the origin, ingredient, processing etc. of the product before making a purchase. Additionally, consumers also make price comparisons, and this trend is more prominent among millennial consumers and is also spreading across several regions. Growing awareness among the millennial population regarding the harmful effects of food additives, antibiotics, and chemicals has increased the adoption of organic products, especially in developed regions, and this is expected to trigger the demand for industrial fat fraction in the coming years.
Europe to lead owing to high usage in bakeries and confectioneries
Last year was momentous for Europe, as the United Kingdom voted to leave the European Union (EU). Pressures exerted by the Greece debt crisis and influx of refugees from the Middle East continue to pose challenges to policy and growth. Although the continent is in turmoil, many experts are of the opinion that the current situation can also offer conditions for course correction. There has been clamor for reforms in the EU, and as the threat of disintegration looms large, a transformation might be in the offing. Angela Merkel’s weaker-than-expected victory in Germany could create challenges for greater integration and collaboration in the EU. The consumption of certain products has altered after the political changes in the region. This has resulted in a high usage of industrial fat fraction in the region as Europe is one of the largest consumers of butter in the world and the growing awareness among consumers along with the need to adhere to the policies and regulations is expected to benefit the market in the long run.
The business environment in Europe remains positive with many countries in Western Europe ranking highly on the World Bank’s ‘Doing Business’ index. The United Kingdom, France and Germany are ranked among the top 30 countries in the index. However, the business environment is in stark contrast in Eastern Europe vis-à-vis Western Europe. The EU has endeavored to encourage cross-border business activity; however, the rising tide of protectionist measures can stymie investor confidence. The proliferating investments are expected to benefit industries such as bakery and confectionary, in turn supporting the growth of related industries such as industrial fat fraction.
North America to try to catch up with Europe
The food and beverage industry in North America remains on a steady pitch, owing to the stability in consumer spending on food and beverage products. In the U.S., changes in the Food Safety Modernization Act (FSMA) can mean that America’s food safety laws will focus more on prevention of food contamination, rather than responding to entitlements of food adulteration. Growth in awareness on the role of food in health and well-being has made consumers in the U.S. and Canada more attentive towards the ingredients used by manufacturers. The preference towards healthy foods has made North American food and beverage companies develop new product portfolios. This factor is expected to trigger growth in several industries, one of them being the industrial fat fraction market.
Food and Beverages Global Industry Outlook
The food and beverage industry in North America is colossal and comprises and number of players in largely fragmented and multi-tiered supply chains. The industry is stringently regulated and players often have to adapt to a landscape that changes quite frequently. The primary demand drivers in North America are witnessing fast-paced evolution, as dietary habits receive emphasis, especially among consumers who scour every label to read the ingredients. Although mergers and acquisitions have been a staple in the food and beverage industry, uncertainties in political climate in Europe and America lead to a slowdown in 2016. As there is more clarity on the U.S. Presidential election and Brexit, the pace of mergers and acquisitions is likely to pick up.
The evolving tastes and preferences of consumers are not lost on manufacturers, as offerings have been broadened to accommodate organic and natural food products. Many established players are focusing in acquiring smaller companies which have the expertise and reputation of being pros in specific organic and natural domains. These smaller companies have deep brad loyalty, and owing to the small scale of production, it is much easier for them to come up with innovative products. These factors, combined with increasing emphasis on organic and natural, are likely to make smaller companies attractive targets for mergers and acquisitions.
In Europe, notable developments that the food and beverage industry needs to lookout for are stricter monitoring of unfair trade practices (UTPs) by the European Commission (EC). Many food and beverage manufacturers are currently assessing the risk to business once Brexit comes into effect. As the timing and full impact of Brexit is still uncertain, food and beverage companies are focusing on taking preventive action to secure their business interests.
List of factors tracked in the Food Ingredients Market Report
In the food ingredients sub-domain, the following factors have been tracked.
- Food ingredients consumption by different markets
- Food ingredients produced by key manufactures
- Allied market growth
- Utilization of ingredient by volume in food products
- Key use area (eg. Bakery, beverages, dairy, baby food etc.)
- Parent market growth and share for allied industry
- Level of usage
- Key manufacturers
- Forms available (Form of ingredients)
- FOB and CIF pricing Final product- Consumption pattern and preferences
- Demand for organic, natural and conventional
PMR utilizes robust methodology and approach to arrive at market size and related projections. The research methodology for this report is based on 3 dimensional model. We conduct about 45-60 min duration detailed interviews with product manufacturers; apart from this we also collect market feedback from industry experts. To validate this data, we interact with senior panel members having more than 10 years of experience in relevant field. The panel members help in validating the findings and fill the gaps if any. In addition, we leverage on our existing pool of information, paid database and other valid information sources available in public domain. Usually industry interactions extend to more than 50+ interviews from market participants across the value chain.
PMR collects data from secondary sources including company annual reports, association publications, industry presentations, white papers, and company press releases apart from these we leverage over paid database subscriptions and industry magazines to collect market information and developments in exhaustive manner. After being done with desk research, detailed questionnaire and discussion guide is formulated to initiate primary research with key industry personnel; the discussion aims at collecting key insights, growth perspectives, prevalent market trends and quantitative insights including market size and competition developments. Both of these research approaches help us in arriving at base year numbers and market hypothesis.
In this phase, PMR validates the data using macro and micro economic factors. For instance, growth in electricity consumption, industry value added, other industry factors, economic performance, growth of top players and sector performance is closely studied to arrive at precise estimates and refine anomalies if any.
Data Analysis and Projection
Data analysis and projections were made based on proprietary research frameworks and statistical analysis, which was further validated from industry participants. These frameworks include Y-o-Y growth projections, macro-economic factor performance, market attractiveness analysis, key financial ratios, and others.
For public companies we capture the data from company website, annual reports, investor presentations, paid databases. While for privately held companies, we try to gather information from the paid databases (like Factiva) and based on the information we gather from databases we estimate revenue for the companies. In addition, the team tries to establish primary contact with the companies in order to validate the assumptions or to gather quality inputs.
Standard Report Structure
- Executive Summary
- Market Definition
- Macro-economic analysis
- Parent Market Analysis
- Market Overview
- Forecast Factors
- Segmental Analysis and Forecast
- Regional Analysis
- Competition Analysis
The global industrial fat fraction market has been segmented on the basis of the following:
- North America
- Asia Pacific
- Latin America
- Middle East and Africa
- Blended Products with Value Added Fats
- Blended Products with Different Melting Characteristics
Specific Report Inputs
In order to come to certain conclusions, the analysts working on this report have examined the total butter consumption globally and regionally and have also gauged the total dairy consumption country wise. Production data from the key players has further been taken into consideration.