New report identifies key growth sectors for flavours

The market for natural and functional ingredients is set to explode, according to a new report on the future of food and drink flavours.

The new Business Insights report, which examined global trends in flavours, also identified key growth markets that ingredients firms should target.

Ethnic foods and fusion flavours

Interestingly, German and Slavic flavours stand out as the fastest growing ethnic flavours in terms of new ethnic product launches recorded by Productscan between 2004 and 2006.

Products launched that contained the flavours increased by 163.0 per cent over the period.

The report found that foods from the Scandinavian region also witnessed a surge in popularity among Continental Europeans, driven by the perceived health benefits of the cuisine (particularly the high intake of oily fish and steamed vegetables) - and the expansion of a Swedish food range in Ikea.

But of all ethnic products launched in 2004 and 2006, the largest share (39.0 per cent in 2006) contained Asian flavours. Business Insights said that this is unlikely to change in the next three to five years, and still offers huge potential for new product development.

Asian is also the second most popular ethnic flavour in terms of product launches in the global bakery and cereals market.

Fresh, natural and authentic flavours and ingredients

Consumers are becoming more interested in the journey pre-packaged food, often purchased in a hurry, has made to get from farm to fork. Whole, natural, fresh and authentic flavours and ingredients provide more of a guarantee to interested consumers about this journey and imply it has been shorter, and perhaps more environmentally friendly.

'All-natural has therefore become a buzzword in the global food and drink industry.

Agave nectar for example is a whole and natural ingredient with 'exotic' qualities that can be easily incorporated into new products to make them sweeter without having to rely on artificial sweeteners.

More snacks products are using exotic herb and botanical flavours for innovation.Over a quarter of all snack products launched that contained natural flavours between 2004 and 2006 were made up of these flavours.

Traditional spices, particularly cinnamon, were in 14.2 per cent of confectionery products launched that contained natural flavours.

A taste for health: fruits

In the short-term, a stronger focus on the provenance of fruits is expected. Consumers are also increasingly interested in organic fruits that are free from pesticides.

Superfruits will continue to be successful and the list will grow from the current favourites pomegranate, blueberries and cranberries to include more exotic fruits.

In fruits previously categorised as exotic such as coconut and pineapple are becoming more mainstream, and consumers are looking for new, interesting and exotic fruits such as guava, lychee, pomelo, yuzu, and tamarind.

Overall though, the leading flavours in products launched between 2004 and 2006 are strawberry, lemon and apple. These top three flavours are also popular combinations; Pur Natur launched two Pur Natur Bio Cocktail Drinks in lemon and strawberry and lemon and apple flavours.

Flavours and ingredients with added health benefits

Business Insights said that consumers are also looking for more natural ways of boosting their essential fatty acid intake, and manufacturers are starting to become more creative with how these healthy ingredients are packaged to appeal to a wider target audience.

Soy takes the largest share of food and drinks launched containing flavours with functional benefits over the past two years but it has not demonstrated the strongest growth. In fact, food and drinks launched containing the flavour decreased by 15.2 per cent between 2004 and 2006.

Brand and marketing managers promoted pomegranate as the new cranberry in2005; a strategy that worked in favour of this functional fruit, which is now a regular feature in new healthy product launches.

In 2006, pomegranate took a 1.4 per cent share of food and drinks launched containing flavours with functional benefits, but this was a 100 per cent increase from 2004.

Raspberry is the second most influential flavour in food and drinks launched containing flavours with functional benefits between 2004 and 2006. It is the leading flavour in the confectionery and soft drinks sectors with a share of 30.8 per cent and 14.0 per cent respectively.

Dairy products are arguably the most recognised functional products in the global food industry. According to 73.9 per cent of respondents to the Business Insights survey, dairy will still offer the highest sales growth potential for flavours with functional benefits in 2011.

Future flavour forecasts

If a company chooses to include a novel ingredient into a new product, Business Insights said it should be prepared to explain the origins and unique selling points of the ingredient on packs and through point of sale merchandising as a minimum.

A growing trend will be the fusion of fruit flavours with more indulgent ingredients such as chocolate outside of the traditional categories of desserts and confectionery. These flavours will be increasingly combined in typically savoury dishes such as ready meals, meat, pasta and pizzas.

Popular flavours such as raspberry, soy and cinnamon will continue to translate to high value sales for European functional food and drinks.