Food enzymes face a competitive market

Thursday, 27 December, 2007


While the performance benefits of enzymes are increasingly being acknowledged by food product manufacturers, enzyme suppliers still have to contend with price pressure and intense competition while at the same time delivering quality customised solutions and service, according to a report on the food enzymes industry.

An analysis by Frost & Sullivan, Strategic Analysis of the Australian Market for Enzymes for Food Applications, found that enzyme suppliers for food and beverage applications in Australia generated revenues totalling AU$25 million in 2006, which is expected to increase by a CAGR of 3.5% to reach around AU$32 million by 2013.

"The consistent performance of enzymes as processing aids has helped reinforce their relevance to food product manufacturers and sustain demand for enzyme solutions," said Ivan Fernandez, consulting manager at Frost & Sullivan Australia.

"The commercial benefits offered by enzymes to food product manufacturers include easier and faster processing, higher specificity of action, improved yield, reduced wastage, improved stability and handling, reduction in the formation of undesirable by-products of the process, as well as greater flexibility and higher final product quality."

The fact that enzymes are biodegradable also makes them more attractive than conventional chemical alternatives.

However, with many enzymes for food applications reaching commodity status and with intense competition among enzyme suppliers, there is considerable pressure to bring down prices. The report found the average prices of dairy enzymes in Australia declined by 10% over the 18 months to October 2007 — a trend that will limit margin growth, profitability and overall revenue.

"Added to that, the lack of genuine product innovation hinders price and revenue growth," said Fernandez.

"This is due to the fact that enzymes require long product development cycles and customers appear satisfied with existing enzyme offerings.

"Finally, the volume of enzymes used is directly impacted by the state of the major end-user application sectors. Any significant decline in end-user product volumes results in a corresponding decline in the volume of enzymes used," he said.

The report found enzyme suppliers sustain their competitive advantage through aggressive pricing, offering a wide product portfolio and delivering customised solutions and technical support.

Related News

Preventing Salmonella from affecting raw eggs

Researchers have developed a decontamination method to prevent salmonellosis from affecting raw...

Aussie wheat takes the cake in Asian biscuit market

Australian soft wheat could be used to make sweet products in key Asian markets, opening the door...

Plant-based bacteria used to make vegan yoghurt

A lactic acid bacteria from Danish plants has been used to make an entirely vegan...


  • All content Copyright © 2020 Westwick-Farrow Pty Ltd