Chemicals are known to be the indispensable building blocks for almost all the things we find on earth, including animals, plants, human beings, and even food. Food provides nutrients, such as protein, carbohydrates, fats, and others, to the human body, and most of these nutrients are found in their natural form in the food we eat. Yet, over the years, with the changing preferences for different types of food amongst individuals, there is a growing demand for food and food products that require a variety of specialty chemicals for manufacturing them.
“The concept of using chemicals for manufacturing food products isn’t new. It is said that in ancient China, people burnt paraffin wax to ripen fruit as the burnt paraffin produced traces of ethylene and propylene, which combined with the food and helped it to ripen faster. On the other hand, in Egypt, people used saffron to color food, while in Rome, the Romans added potassium aluminum sulfate, popularly known as alum, in bread to make the color whiter.”
Over the years, with the advancements in the food and beverage industry, individuals learned the various application of specialty chemicals in the manufacturing of food products, and with the increasing commercialization of food products, food manufacturers started using widely the special chemicals for manufacturing different types of food products, ranging from bakery foods to ready-to-eat food products.
What exactly is Specialty Chemical?
Specialty chemicals are the chemical products that are used across different end-use industries to formulate or manufacture a product. These chemicals can either be organic or inorganic. In the food and beverage industry, food manufacturers prefer utilizing organic specialty chemicals for the manufacturing of food products. These chemicals are usually manufactured using batch processing techniques in batch chemical plants. Some of the application areas of specialty chemicals in the food and beverage industry are mentioned below in figure 1:
Primarily, the specialty chemicals that are used in the food and beverage industry include cleaning materials, and food additives among others, and each of these chemicals are used in their varied forms across different methods of the food manufacturing process, such as canning, fermentation, frozen, modified atmosphere packaging, pasteurization, smoking and others. According to our research, the global food and beverage chemicals market is projected to grow with a notable CAGR during the forecast period 2021-2029, backed by the growing demand for plant-based food & beverages products, which are manufactured by utilizing bio-based food ingredients, along with the demand for clean and ethical label food products. On the other hand, change in food preferences amongst the consumers owing to changing lifestyles and growing disposable incomes, increasing focus of consumers for healthy food products and increasing demand for specialty chemicals amongst the end-users are some of the factors anticipated to drive the demand for food and beverage chemicals in the coming years.
Food Additives as Specialty Chemicals in the Food & Beverage Industry
There are different types of food additives that are used widely by food manufacturers. Some of them are mentioned below in figure 2:
Out of all these types of food additives, some of the most commonly used categories are sweeteners, colors, preservatives, flavor enhancers, anti-caking agents, and thickeners among others.
The Road Ahead for Food Specialty Chemicals
Food manufacturers are increasingly raising their focus on utilizing food specialty chemicals to manufacture food products as a measure to overcome the lost opportunities in the market caused by the COVID-19 pandemic and to support the overall supply chain. Both government and private entities are focusing on the global agri-food supply chain, so as to meet the Sustainable Development Goals (SDGs) of 2030.
“According to a research report of the United Nations Conference on Trade and Development (UNCTAD), economists claim that the trade contraction from COVID-19 has been deeper than the 2008 financial crisis. The World Trade Organization (WTO), on the other hand, projected the world trade to fall by 13-32% in the year 2020.”
On the other hand, as many low-income developing nations are dependent on imports for their food consumption, hence, regulatory bodies are focusing on enhanced food security and on reducing food waste. Apparently, the food manufacturers are focusing on reducing food waste and food losses along the supply chain by utilizing the right volume of preservatives in their food products.
“According to the Food and Agriculture Organization (FAO), around one-third of the food produced globally for human consumption is lost or wasted along the supply chain.”
Moreover, with the increasing population worldwide, which is raising the demand for a variety of food and food products, food manufacturers are accenting on to increase their production volume so as to meet the requirements of the customers. Also, during this whole process, the food manufacturers are emphasizing on proper food storage and are also ensuring that there is no change in the taste of the food product. Hence, an adequate amount of food additives is being added to these food products to overcome the challenge, which is also anticipated to drive the demand for different types of food additives.
Additionally, with the growing awareness amongst consumers for healthy food products, backed by the rising incidences of health diseases, food specialty chemical manufacturers are focusing on to develop advanced food additives by investing more in research and developments or by partnering with other companies for the development of a sustainable food specialty chemical product. For instance, in the month of November 2020, one of the global leading companies in taste and wellbeing, Givaudan SA (SWX: GIVN), announced a long-term research partnership with one of the leading producers of industrial enzymes, microorganisms, and biopharmaceutical ingredients, Novozymes A/S (CPH: NZYM-B), so as to develop innovative technologies and ingredients for their customers in the field of food and cleaning. On the other hand, one of the largest chemical manufacturers, BASF SE (ETR: BAS), invested around 4% of its revenues for research and development, amounting to around USD 608 million in Q3-2020.
Players Operating in the Development of Food Specialty Chemicals
There are numerous players who are operating in the development of food specialty chemicals. Few of the key players include DuPont de Nemours, Inc. (NYSE: DD), Archer Daniels Midland Company (ADM) (NYSE: ADM), Spectrum Chemical Manufacturing Corp., Givaudan SA (SWX: GIVN), BASF SE (ETR: BAS), Evonik Industries AG (ETR: EVK), Agropur Cooperative, Brenntag (ETR: BNR), Univar Solutions Inc. (NYSE: UNVR) and Solvay (EBR: SOLB) among others. Most of these companies are working towards the development of advanced food additives which are required for the manufacturing of different type of food products.
The Cons of Food Specialty Chemicals
The manufacturers of food specialty chemicals face numerous challenges when it comes to the production and marketing of these chemical products. Legal obligations to abide by the standards and norms of both national and international regulatory bodies, such as Food and Drug Administration (FDA), National Food Safety and Quality Service (SENASA) (Argentina), World Health Organization (WHO), Canadian Food Inspection Agency (CFIA), Public Health and Food Safety (EU) and Committee on the Environment among others, are raising the need amongst the manufacturers to constantly monitor their product offerings and update these products whenever required.
Moreover, it becomes more challenging for the manufacturers of food specialty chemicals as the regulatory bodies who are associated with food safety and regulations, have control over the usage of different ingredients that are used as food specialty chemicals. Manufacturers, hence, require to constantly update themselves with the presiding norms in different countries for direct or indirect use of these chemicals in food manufacturing and processing.
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