Other convenience food sectors, such as chilled foods and desserts, are also expanding briskly, especially in Southern Europe. Emulsifiers are also experiencing increased uptake in Germany and other countries where industrial plant bakeries are becoming increasingly important.
As a result, suppliers are learning that these innovative products not only provide enormous competitive advantage but also help to build customer loyalty. Suppliers are beginning to focus on other aspects such as customer service and delivery systems.
"Developments in delivery methods for emulsifiers in the production process can also add value to the product," said Anna Ibbotson, food research manager with Frost & Sullivan. "The use of encapsulated products or pumpable systems aids better product delivery in the production process and enables modified production techniques, while also reducing storage and handling costs."
But for all their potential, emulsifiers also face a mounting threat of being replaced by enzymes, especially in the bakery sector. Enzymes are chosen over emulsifiers for their superior crumb softness, volume, shelf life and capabilities as processing aids.
Importantly, enzymes are exempt from EU regulations on genetically modified (GM) foods mandating non-GM products to declare on labels that they use non-GM source material.
"The new EU regulations are expected to lead to a rapid increase in demand for certifiable non-GM products," said Ibbotson. "Initially at least, there are likely to be problems in establishing audit systems and there could be shortages of certified material, which is expected to lead to higher prices and thereby, reduced demand for emulsifiers.
"In the medium term, the non-GM certification systems are likely to be effectively organised and prices are expected to stabilise."
If widespread use of GM products does not lead to any health or environmental problems, consumer opposition is likely to subside. This is a hopeful scenario for emulsifiers, especially since EU organisations claim that GM products are not harmful and restrictions are in place only to allay consumer concerns.
As new EU requirements for fully traceable non-GM materials are introduced, natural emulsifiers are likely to be sold at a premium. While this can increase the profit margins for suppliers of natural emulsifiers that can secure high-quality raw material, synthetic emulsifiers can steal business away from them with their lower prices.
"End users have varying price points and quality requirements," said Ibbotson. "Suppliers that can devise ways to segment their own products to meet the range of market preferences are expected to stay ahead of competition in the emulsifiers market."