World Markets for Citric, Ascorbic, Isoascorbic Acids: Antioxidants in Food

Report Highlights

• The global market for isoascorbic acid, ascorbic acid and citric acid is estimated at $1,700 million.
• Food applications account for $1,080 million, feed applications for $90 million.
• Chinese producers currently have a market share of 37% in isoascorbic acid, 65% in ascorbic acid and 34% in citric acid.
• Sales of isoascorbic acid will grow from $65 million in 2002 to $75 million in 2007, at an average annual growth rate (AAGR) of 2.9%.
• The European market for citric acid accounts for a total of 37% of sales and the U.S. market for 28% of sales.

INTRODUCTION

STUDY GOAL AND OBJECTIVES

Since the early 1990s, food and feed ingredient markets have been characterized by a dynamic development not seen before. Due to population growth, an increasing standard of living in many countries of the world, and a change in population structure, the requirements for food in general and for different types of foods are changing. While in Western Europe and in the U.S. population growth is small, significant growth rates in Asia, Africa and Latin America drive the global demand for food, including animal products, which again require an increasing amount of compound feed. More disposable income in Europe, in the U.S. and in most Asian countries is changing attitude vis-à-vis food qualities. The requirements for food processing are increasing. The aging population predominantly in Western countries also adds to an increased demand for high quality foods. The intensified activities of women and men reduce the time available to prepare foods from crude products and drive the demand for pre-packed, preserved and processed food products.

Consequently, the demand for specific ingredients used in preparing high quality and preserved foods also increases. While 10 years ago food preservation was of little importance from a global perspective, it is now one of the key issues for every food processor. Several additives are enjoying a high popularity, especially when they significantly contribute to food preservation and additionally support an appealing presentation, or add some other value to preserved foods.

Of outstanding importance in this sector are ascorbic acid, isoascorbic acid and citric acid. Ascorbic acid, in addition to its role in preservation, has a vitamin character. The popularity of vitamin C is still increasing as scientific data support its beneficial affect on human health. Isoascorbic acid is the isomer of ascorbic acid and has a strong popularity for the preservation of meat and fish products. Citric acid is a standard acidulant and, due to its flexibility, it is virtually found in every preserved food. Until the early 1990s, ascorbic acid was essentially sold as a vitamin in supplements or pharma-like products produced only by a few companies, and it was highly priced. Today, strong competition, especially from China, drives prices down and makes production economics the key issue in vitamin C production.

Use of vitamin C in foods and feed became very popular for various reasons. Isoascorbic acid is a relatively new product, licensed for use in the U.S. for 10 years and in Europe only since 1995. However, since that time it strongly competes with ascorbic acid and some market segments virtually switched completely from the use of ascorbic acid to isoascorbic acid. Citric acid is a typical fermentation product, originally produced by large fermentation companies in Western countries. The Chinese impact on the citric acid market, in combination with an expansion of its use in food as well as in detergents, is still extremely strong and forces producers to continuously improve processes and focus on economies of scale.

These market dynamics make it difficult for producers and users of these products to keep a complete overview of the markets, the driving forces behind them, the different available production technologies, and the competition.

STUDY FOCUS

This report focuses on the markets, production economics and companies active in the production and marketing of:

• ascorbic acid
• isoascorbic acid
• citric acid.

Since Chinese producers of all of these products play an outstanding role and were partly responsible in the past for stimulating the market's dynamics, a section of the report is specifically devoted to the description of Chinese companies active in the . Special attention is given to a detailed analysis of the market dynamics and application of these products, production processes and key players in the market.

CONTRIBUTION OF THE STUDY

BCC Inc. seeks to provide insight into an industry that is responsible for the advancement of production technology and the design of new food products. Citric acid technological applications, for example in detergents, contributed particularly to the design and marketing of more environmentally friendly consumer products. The report is intended to assist companies and players in the food, supplement and chemical industry by providing them with a comprehensive overview of the industry in order to make strategic and planning easier and more reliable. As economy of scale is key in the production of the reviewed products, the report should also be of relevance to companies considering expansion and diversification into products which still show a high level of use by the application industry and higher market dynamics than other chemicals.

SCOPE AND FORMAT

Product forms and descriptions are discussed first, followed by an application review. Production technologies and economics are discussed extensively. Market data, breaking down historic and current use by segment, by geographic area and by volumes sold follow. Price trends and market value development are discussed. Each section concludes with an outlook on the markets to 2007. An extensive section on the industry structure follows. Market shares of individual companies are shown, strategies described and profiles of major producing companies are given. Since Chinese producers are major participants in these products, a fairly complete overview and company characterization of Chinese companies active in the reviewed concludes this report.

METHODOLOGIES

The methodology applied in this report is based on

• Review of the application sectors for the products;
• Description and analysis of production processes;
• Detailed characterization of the markets and market forces;
• Presentation of producing companies; and
• Strategies of Chinese companies and their impact on global market dynamics.

INFORMATION SOURCES

In the Western hemisphere, there is a limited number of producers of the reviewed chemicals, which are well known. In China however, the picture is less transparent and in addition to a few major companies, many small factories are still active and supply local, regional and international markets. The use of the products is well documented, however, production technologies, production volumes and market values are less reviewed. Therefore, direct contact with the producers and suppliers of raw materials allows the presentation of reliable and confirmed data.

ANALYST'S CREDENTIALS

Ulrich März is experienced both as a food scientist and technical economic analyst in the field of food and feed ingredients. He has made significant contributions to technology, and performed industry and market analysis of vitamins, colorants, enzymes, organic acids, amino acids, and other fermentation derived food and feed ingredients, with BCC multi-client and custom studies. Dr. März has been with BCC for over 5 years. M.Sc., Chemical Engineering; Ph.D., Economics and Management, University of Stuttgart, Germany.