There is also evidence consumers will pay a higher price for products formulated with such natural ingredients. As many as 73% of consumers said they are willing to pay a higher retail price for a food or beverage product made with ingredients they recognize and trust, according to research published by Ingredient Communications, London.
In a survey of 1,300 consumers across Europe, North America and Asia-Pacific, more than half of the respondents said they would spend over 10% more on a food or beverage product that contained ingredients they recognized and trusted. Eighteen per cent said they would pay 75% or more extra.
The survey findings underscore the growing importance of clean labelling, transparency and the use of ingredients that are familiar to consumers. They also suggest there is a significant opportunity to harness the potential of co-branding between food and beverage manufacturers and ingredients suppliers.
“Co-branding of ingredients in the food and beverage industry is still fairly unusual, and yet our survey suggests it would resonate with many consumers,” said Richard Clarke, director of Ingredient Communications. “We have seen the power of the ‘Intel Inside’ concept in the home computer market. If it works for selling laptops, then why not food and drink?
“Marketing finished products that contain ‘branded’ ingredients that consumers recognize could be key to commanding a substantial price premium in-store. One barrier to co-branding is a perception among food and beverage companies that it reduces their ability to shop around among suppliers of raw materials to achieve the best price. However, with consumers willing to pay such large price premiums for products made with ingredients they know, this factor might easily be offset by increased sales and profits.”
The Ingredient Communications survey showed consumers in the United States are willing to pay the most — with 44% stating that they would pay extra for ingredients they recognized and trusted. This was followed by consumers in India (32%), the Philippines (29%) and Malaysia (26%), indicating a strong preference for recognizable ingredients among consumers in Asia.
Ingredient suppliers have been capitalizing on the natural trend by marketing and selling ingredients that are perceived as minimally processed for some time. In recent years, many companies have expanded their offerings with the development of formulation solutions for a variety of applications.
“Aside from the top-selling ingredients, very well-known botanicals that represent a category per se like cranberry or turmeric or ginseng, for example, we feel that the market is expecting natural solutions to alleviate certain health conditions,” said Elizabeth Bui, director of the Nutrition & Health business unit for Naturex, which has a U.S. office in South Hackensack, N.J. “When it comes to the need for a natural source of nutrients to address consumer demand for natural nutrition, the market is expecting us to provide natural solutions, rather than just specific single ingredients. This is why we designed the TasteRich and NutriRich offers.”
TasteRich is a solution from Naturex that allows manufacturers to improve the flavor of finished products with fruit and vegetables that consumers perceive as healthy. The NutriRich solution is a line of standardized powders that may be added to formulas to achieve the desired amount of specific vitamins, minerals and other ingredients. For example, the high vitamin C content in the portfolio’s acerola powders may be used to replace synthetic vitamin C. The line’s moringa powder is standardized in omega-9 fatty acids, vitamin E, calcium, protein and fibers and may be used in a variety of nutritional applications, according to the company.
Sensent Natural Ingredients, Turlock, Calif., has embarked on a similar path with the development and introduction of its Umami Natural and Smoked Vegetable solutions.
“The rationale behind the Umami Natural was to provide a clean label umami flavor profile with natural ingredients preferred by today’s consumers,” said Jean Shieh, marketing manager for Sensient Natural Ingredients. “The market shift is not necessarily focusing solely on reducing the number of ingredients, but rather on improving the quality of ingredients used to deliver the optimal product performance.
“Depending on product needs, in some cases, product developers replace synthetic ingredients with higher-quality natural alternatives, such as using paprika instead of artificial color for food coloring; in other cases, product developers might look at the product as a whole when reformulating, and that’s when a flavor solution such as Umami Natural would be most fitting.”
In early 2016, Sensient Natural introduced its Smoked Vegetables line.
“We cold smoke our dehydrated onion, red bell pepper, green bell pepper and paprika products with a proprietary blend of fruit woods, so the vegetables deliver a smoky note in the finished products without aids from any additional additives,” Ms. Shieh said.
At the Institute of Food Technologists’ annual meeting and food expo, held in July in Chicago, Kalsec, Kalamazoo, Mich., added Simply Aquaresin to the company’s line of water dispersible oleoresins. The ingredient solution has been formulated with emulsifiers that meet the requirements of most retail grocery stores and restaurants that have identified unacceptable artificial ingredients for many of their products, according to the company.
Kalsec also offers such solutions as Durabrite natural colors and Herbalox, which are low flavor and aroma antioxidants.
Ms. Shieh, of Sensient Natural Ingredients, said transparency and regional sourcing will become more important to the evolving market for clean label products sourced from natural ingredients.
“With several international retailers and food service providers making commitments to stop using artificial flavors and colors, products made without artificial ingredients are the table stakes now,” she said. “Consumers want to know which region or even which farm the ingredients are from, and what each ingredient is there for. We are seeing many of our customers start calling out ‘California Garlic’ and ‘California Onion’ on their product ingredients lists, and consumers are responding positively to this level of transparency.”