London, August 1 - Fuelled by media attention, and research and support groups, consumers' interest in natural ingredients has increased significantly, causing them to choose food colours that are distinguished as completely natural. Natural food colours have been in existence for many centuries and have not been associated with health risks, unlike synthetic food colours that have an image tainted with cases of allergies and intolerance. This gives the natural and nature-identical food colours market a strong competitive advantage over synthetic colours.
New analysis from Frost & Sullivan, European Natural and Nature-identical Food Colours Market, reveals that the market earned revenues of US$198.1 million in 2006 and estimates this to reach US$247.7 million in 2013.
The market can build on this consumer and customer support advantage through an attractive pricing strategy and product development aimed at providing a range of colours that can replace synthetic colours in all application sectors including soft drinks, dairy and confectionery.
Some remarkable innovations and unfluctuating supply of raw materials have also aided the successful replacement of synthetic colours with natural colours. The natural colours produced in recent times are technically more advanced. Therefore, natural colours produced today are more stable in varying conditions of temperature, light and pH unlike the natural colours produced earlier.
"Moreover, the elevation of the functional platform of natural colours from simple colorants to health promoting ingredients has increased the demand for natural colours from retailers as well as consumers," notes Frost & Sullivan Industry Manager Sangeetha Srinivasan. "Many natural food colours including curcumin, beta carotene, lutein and lycopene have profound health benefits, which enhances the functionalities of food colours."
Both natural and synthetic colours are governed by the same EU legislation. Recently, the European Union introduced the E-numbers law, which require both of them to be labelled according to their assigned E-numbers to ascertain the safety of additives.
However, the lack of consumer awareness has led to the association of E-numbers solely with synthetic colours, which has significantly affected the natural food colours market.
Food and beverage manufacturers are therefore keen to market products with clean labels, which restrict the use of additives with E numbers.
"This offers natural colour manufacturers a narrow space to operate, since almost all natural colours have a specific E-number," observes Sangeetha. "For the sustained growth of the natural colours market, it is imperative to conduct awareness campaigns to inform consumers that the objective of E-numbers is to ascertain the safety of additives."
Participants in this highly fragmented and price-sensitive market also have to deal with another roadblock - the entry of Asian manufacturers in Europe.
However, some existing alliances and joint ventures with these Asian manufacturers has helped ease out the price pressure faced by the market.
Other strategies to facilitate growth include collaboration with industry bodies, market expansion, vertical integration, investment in R&D and strategic alliances.