Protein ingredients markets facing tight profit margins

31/08/05 UK, Growing maturity in Western European countries and intensifying competition in the overall European protein ingredients markets, especially for nutritional applications, are compelling manufacturers to turn to new revenue sources such as functional food and sports products in order to maintain profit margins.

Large food manufacturers are demanding value-added products that provide specific functional and not just nutritional benefits. Protein manufacturers that respond to this trend with are more likely to gain a competitive edge.

With the application and client base expanding due to the development of the functional proteins, revenues in the European protein ingredients markets are expected to increase from EUR 3.77 billion in 2004 to EUR 4.43 billion in 2011. High-value milk protein isolates and concentrates have been one of the fastest growing sectors and account for 50.0 per cent of the market.

The increasing popularity of processed food in Eastern Europe is also likely to offer significant opportunities in this market. Price-sensitive consumers in Eastern European markets are demanding low-cost protein sources that serve as adequate meat substitutes and extender proteins.

Projecting a "healthy" image of protein sources, especially in the aftermath the bovine spongiform encephalopathy (BSE) crisis is another issue that manufacturers need to consider more seriously.

The key is to exercise greater control over the whole production line including the production of the raw material to ensure superior quality and to satisfy regulatory requirements for traceability of ingredients.

Value-added protein manufacturers that market their products for a particular niche market stand to gain immensely.

The demand for nutritionally balanced proteins is increasing, especially from markets such as diet and sports supplements, energy snacks and beverages and functional foods. Manufacturers often blend protein ingredients lacking in nutritional qualities with other protein or ingredient sources to provide the required nutrition profile.

In fact, blending and pre-mix companies are likely to play an increasing role in this market in the future. Partnership with raw material producers is likely to be another popular trend that will allow manufacturers to influence the properties of proteins at their origin.

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