FPSA State of the Industry and Forward Look - December 2006

Table of Contents

• Introduction
• FPSAresearch.org
• Definitions
• Functional ingredient definitions
• Health definitions
• Abbreviations and Terms
• Executive Summary
• Overview
• Exclusive FPSA R&D survey
• Sector insight
• Bakery
• Beverage
• Confectionery
• Dairy processing
• Fruit and vegetable processing
• Meat, poultry and seafood
• Snacks
• Forward Look findings
• Organic foods move mainstream
• Full flavor, less sodium
• Heart health
• Kids and obesity
• Omega-3 fatty acids
• Feeling fuller, longer
• Back to basics: food safety
• Probiotics and prebiotics
• Barley: not so boring
• Calorie control
• Service level opportunities
• Supply Chain Dynamics
• Overview
• Flavor and ingredient suppliers
• Raw material and ingredient availability
• Transportation costs
• Mounting processor expectations
• Food and beverage manufacturers
• The growing presence of private label
  • Figure 1: Consumer perception of private lable brands compared to national brands, 2006
• Retailer influence grows
• Health and wellness continues to guide development
• New product development challenges
  • Figure 2: Day-to-day concerns of product development professionals, 2006
  • Figure 3: Graph: Day-to-day concerns of product development professionals, 2006
• Spheres of influence
• The consumer
• Energy prices take dollars away from food purchases
• The changing needs of an aging population
  • Figure 4: U.S. population, by age, 2000-10
• Ethnic diversity
  • Figure 5: U.S. population, by race and Hispanic origin, 2000-10
  • Figure 6: Immigration to the U.S. by region of origin, 1999-2004
• The time factor
• Market Trends
• Market Size
  • Figure 7: Total U.S. manufacturer sales of flavors and ingredients projection, 2001-11
• Market Trends
• Consumer response to ingredients impacts development
  • Figure 8: Influence of consumer response on specific ingredients usage, by sector, 2006
  • Figure 9: Graph: Influence of consumer response on specific ingredients usage, by sector, 2006
• The health and wellness impact--for new products and reformulations
  • Figure 10: Importance of health and wellness in new product development and reformulations,
• The cutting edge of ingredient and flavor trends
  • Figure 11: Importance of being on the cutting edge for ingredients and flavors, by sector, 2006
• Trend prioritization in development work--the next three years
  • Figure 12: Expected influence of specific trends in development work--next three years, 2006
• Ingredient innovation desired by manufacturers
  • Figure 13: Ingredient innovations desired by R&D professionals, 2006
• Flavor innovation desired by manufacturers
  • Figure 14: Flavor innovations desired by R&D professionals, 2006
  • Figure 15: Flavor innovations desired by R&D professionals, 2006
• Regions driving flavor trends
  • Figure 16: Global regions driving flavor trends, 2006
  • Figure 17: Graph: Global regions driving flavor trends, 2006
• New product launch activity
  • Figure 18: New product launches, by sector, 2003-06 (partial)
• Bakery Sector Insight
• Industry trend impact
  • Figure 19: Bakery--expected influence of specific trends in development work--next three years, 2006
• Formulation challenges
  • Figure 20: Ranking of development challenges in bakery sector, 2006
• Prioritization of flavors and ingredients
  • Figure 21: Flavor and ingredient profiles indicated as "important" in development work, 2006
• Flavors in development
• Innovation potential
  • Figure 22: Bakery sector--ingredient innovations desired by R&D professionals, 2006
• Moving forward
• Bakery sector service enhancement opportunities
• Beverage Sector Insight
• Industry trend impact
  • Figure 23: Beverage--expected influence of specific trends in development work--next three years, 2006
• Formulation challenges
  • Figure 24: Ranking of development challenges in beverage sector, 2006
• Prioritization of flavors and ingredients
  • Figure 25: Flavor and ingredient profiles indicated as "important" in development work, 2006
• Flavors in development
• Linking key ingredients to health claims
• Innovation potential
  • Figure 26: Beverage sector--ingredient innovations desired by R&D professionals, 2006
• Moving forward
• Beverage sector service enhancement opportunities
• Confectionery Sector Insight
• Industry trend impact
  • Figure 27: Confectionery--expected influence of specific trends in development work--
• Formulation challenges
  • Figure 28: Ranking of development challenges in confectionery sector, 2006
• Prioritization of flavors and ingredients
  • Figure 29: Flavor and ingredient profiles indicated as "important" in development work, 2006
• Flavors in development
• Innovation potential
  • Figure 30: Confectionery sector--ingredient innovations desired by R&D professionals, 2006
• Moving forward
• Confectionery sector service enhancement opportunities
• Dairy Processing Sector Insight
• Industry trend impact
  • Figure 31: Dairy processing--expected influence of specific trends in development work--next three years, 2006
• Formulation challenges
  • Figure 32: Ranking of development challenges in dairy processing sector, 2006
• Prioritization of flavors and ingredients
  • Figure 33: Flavor and ingredient profiles indicated as "important" in development work, 2006
• Flavors in development
• Innovation potential
  • Figure 34: Dairy processing sector--ingredient innovations desired by R&D professionals, 2006
• Moving forward
• Dairy processing sector service enhancement opportunities
• Fruit and Vegetable Processing Sector Insight
• Industry trend impact
  • Figure 35: Fruit and vegetable processing--expected influence of specific trends in development work--next three years, 2006
• Formulation challenges
  • Figure 36: Ranking of development challenges in fruit and vegetable processing sector, 2006
• Prioritization of flavors and ingredients
  • Figure 37: Flavor and ingredient profiles indicated as "important" in development work, 2006
• Flavors in development
• Innovation potential
  • Figure 38: Fruit and vegetable processing sector--
• Moving forward
• Fruit and vegetable processing sector service enhancement opportunities
• Meat, Poultry and Seafood Sector Insight
• Industry trend impact
  • Figure 39: Meat, poultry and seafood--expected influence of specific trends in development work--next three years, 2006
• Formulation challenges
  • Figure 40: Ranking of development challenges in meat, poultry and seafood sector, 2006
• Prioritization of flavors and ingredients
  • Figure 41: Flavor and ingredient profiles indicated as "important" in development work, 2006
• Flavors in development
• Innovation potential
  • Figure 42: Meat, poultry and seafood sector--ingredient innovations desired by R&D professionals, 2006
• Moving forward
• Meat, poultry and seafood sector service enhancement opportunities
• Snacks Sector Insight
• Industry trend impact
  • Figure 43: Snacks--expected influence of specific trends in development work--next three years, 2006
• Formulation challenges
  • Figure 44: Ranking of development challenges in snacks sector, 2006
• Prioritization of flavors and ingredients
  • Figure 45: Flavor and ingredient profiles indicated as "important" in development work, 2006
• Flavors in development
• Innovation potential
  • Figure 46: Snacks sector--ingredient innovations desired by R&D professionals, 2006
• Moving forward
• Snacks sector service enhancement opportunities
• Forward Look
• Health and wellness areas to watch in 2007
  • Figure 47: Prioritization of Forward Look areas, by sector, 2006
• Organic foods move mainstream
• Market drivers
• Organics are a lucrative market
• Supply does not always meet demand
• The old organic consumer vs. the new organic consumer
• Anticipated market activity
• Impact on applications
• Full flavor, less sodium
• Market drivers
• New sodium consumption guidelines
  • Figure 48: Sources of dietary sodium, 2005
• Regulating sodium content
• Companies are at work on alternatives
• Anticipated market activity
• Impact on applications
• Heart health
• Market drivers
• Who' s at risk for heart disease?
  • Figure 49: Concern about heart health, by race, June 2005
• Making heart-healthy foods easy to identify
  • Figure 50: Requirements for AHA Heart-check Mark certification, 1995
  • Figure 51: FDA heart health claim approval history, by food category, 2006
• Anticipated market activity
• Impact on applications
• Kids and obesity
• Market drivers
• Incidence of childhood obesity on the rise
  • Figure 52: Increase in child and adolescent overweight over time, 1963-2004
• Reasons for obesity abound
• Changes in progress
• Anticipated market activity
• Impact on applications
• Omega-3 fatty acids
• Market drivers
• Consumers want their omega-3s
• Anticipated market activity
• Impact on applications
• Feeling fuller, longer
• Market drivers
• What is the glycemic index?
• Incidence of diabetes is on the rise
• How controlling glycemic index can help
• Anticipated market activity
• Impact on applications
• Back to basics: food safety
• Market drivers
• Awareness of food-borne illnesses is high
• Anticipated market activity
• Impact on applications
• Probiotics and prebiotics
• Market drivers
• Prebiotics and probiotics are gaining attention in the U.S.
• Probiotics are appearing in new products
• Anticipated market activity
• Impact on applications
• Barley: not so boring
• Market drivers
• Barley is a multi-tasker
• Anticipated market activity
• Impact on applications
• Calorie control
• Market drivers
• Calorie and portion control are the next big thing
• Anticipated market activity
• Impact on applications
• Monitoring Forward Look trends
• FPSAresearch.org
• FPSA State of the Industry survey
• Executive interviews
• FPSA member surveys
• Online focus group research
• Mintel sources
• Trade press review
• Appendix: About FPSA
• FPSAresearch.org
• Appendix: About Mintel