Vitamin E is a general term used for substances that are structurally or biologically related to the best known member of the familyalpha-tocopherol. Vitamin E is natural, fat-soluble and possesses superior antioxidant properties, which means vitamin E has a wide range of applications, such as taming free radicals and inhibiting the development of wrinkles, and preserving food, beverage and animal-feed products. Scientific research suggests there could be significant benefits in helping with complications related to heart health, cancer and Alzheimer's disease. Vitamin E also can be sourced from a wide range of foods such as eggs, plant oils, nuts, green leafy vegetables, spices such as oregano, and whole grains.
Because of the wide net of application possibilities afforded to vitamin E suppliers, the opportunity space each supplier faces is highly dynamic and in flux. The conventional vitamin E markets in Europe, the United States and Asia are saturated, such as dietary supplements and functional foods, but specific sectors are experiencing higher than average growth. Today, three key markets considered the hottest, in terms of market attractiveness for vitamin E, include nutricosmetics, natural shelf-life stabilizers and pet food. These three market segments will be the vitamin E market growth engine for the next five plus years. For example, the nutricosmetics segment is growing at a healthy compound annual growth rate (CAGR) of 6.7 percent in the U.S. market through 2020. Increasing demand in developing Asian markets is further driving global growth in this segment. Regarding the pet food segment, increased interest in switching away from synthetic antioxidants to natural mixed tocopherols is compounding the growth of this natural vitamin E segment; growth expectations range from a CAGR of 5 to 7.5 percent through 2020.
Increasing Importance of Vitamin E in Nutricosmetics
Vitamin E offers multiple functions. The double-digit growth of the vitamin E market for nutricosmetic applications is a testament to this fact and, in turn, is having a significant impact on the otherwise mature vitamins market. Examples of the claimed benefits of vitamin E include:
- Improves the skin texture and the moisture content in the skin
- Helps protect the skin from UV damage
- Increases the effect of sunscreen ingredients
- Inhibition of lipoperoxide-associated skin disorders
- Prevents melanin deposits
- Potent anti-inflammatory ingredient
- Improves the stability of lipid-based cosmetics
Such a varied functional profile has paved the way for the use of vitamin E in a wide range of cosmetic and skin care applications, such as lotions, age-defying creams, sunscreens and lipsticks. The introduction of an increasing number of cosmetic products and dietary supplements containing vitamin E with nutricosmetic claims has spurred growth in the vitamin E sector. The key success factor for the sustained growth in this platform is that claims are supported with solid scientific support. This lucrative business opportunity is encouraging manufacturers to invest in the research and development (R&D) aimed at exploring opportunities in the application sector. The anti-aging benefits are well-established and will continue to drive countries for vitamin E-based nutricosmetics all over the world.
Vitamin E as a Natural Shelf-Life Stabilizer
The demand for natural ingredients is growing globally, and specifically for shelf-life extension food additives market, as consumers increasingly opt for healthier alternatives to conventional antioxidants, which are perceived to be unhealthy if consumed over the long term. Negative media reports about the side effects of synthetic ingredients have popularized natural antioxidants such as green tea extracts, oregano and grape extracts. Brand owners are also partial to natural ingredients, as their clean-label tags will earn them a positive brand image among consumers.
Revenues generated by natural antioxidants in the shelf-life extension food additives market are set to exceed those of synthetic equivalents, mainly due to the rising consumer preference for natural ingredients in food products. According to Frost & Sullivan analysis, the European shelf-life extension food additives marketconsisting primarily of vitamin Eis expected to more than double in coming years, from revenues of USD $103.6 million in 2011 to $246.1 million in 2018. Moreover, the North American shelf-life extension food additives market earned revenues of $106.0 million in 2011 and is estimated to reach $197.8 million in 2018.
A new trend has emerged, however. Due to spiraling commodity prices and raw material shortages, manufacturers have started to blend different antioxidants in order to minimize production cost and maintain competitive pricing. Specifically, blending allows suppliers to partially replace natural antioxidants. The process includes blending rosemary extracts, for example, with mixed tocopherols and ascorbyl palmitate, which are synthetic. Blending antioxidants provides a less expensive product of equal quality and efficacy. Raw materials needed to manufacture antioxidants are scarce, which affects the natural vitamin E segment. The reduced volume production of mixed tocopherols results in a prevalence of alternate sources due to price increases. In the end, vertical integration will be crucial to overcoming challenges related to the scarcity in raw materials. Strategic partnerships and alliances with raw material suppliers will be vital to gain market share, especially in the natural shelf-life extension food additives market.
Vitamin E and the Pet Food Segment
The global pet food industry is posed for rapid growth through 2020. The pet food industry has been growing since 2005, driven by an expansion of the middle class in the developing world and the increasing demand for higher quality (such as natural or organic alternatives) in mature markets. Among the middle income group, pet ownership is also increasing, and they are feeding their pets commercial pet food products. With households getting smaller and more families becoming urbanized, pet ownership is increasing. The pet population in Thailand and Brazil increased from 10.3 million to 12.9 million and from 79.1 million to 92.3 million from 2005 to 2010, respectively. The amount of prepared food fed to dogs and cats is also rising in emerging countries. For example, in Russia, the pet food fed to dogs increased from 6 to 14 percent from 2005 to 2010. For cat food, the jump was from 14 percent to 23 percent. As the industry strives to meet the increase in demand, it becomes increasingly important to have a demonstrated product safety and meet a high level of quality.
All three of these hot growth areas have one thing in commonthey are all driven by the same set of underlining mega trends. These key mega trends can be grouped into three main buckets: globalization and changing economics in emerging regions, the growing need for health and wellness solutions, and the growing sensitivity to food safety and sustainability issues among consumers and manufacturers. Thus, companies that have a truly global market and product strategy that fully exploits the growing demand for health and wellness, and that has adopted an all-encompassing natural strategy, will come out on top and be the global leaders of the vitamin E markets.
Christopher Shanahan is the global program manager for food and agriculture at Frost & Sullivan.