The global yeast industry will develop to a market value of close to $5 billion by 2015, an increase from $3 billion in 2009. This represents a compound annual growth rate (CAGR) of nearly 8%.
Bakery yeast is by far the largest yeast product in both volume and value. This market sector was valued at $904 million in 2009 and is expected to increase at a compound annual growth rate (CAGR) of nearly 8% to reach $1.4 billion in 2015.
The market for ethanol yeast is, compared to bakery and brewery yeast, relatively young but is projected to experience a compound annual growth rate (CAGR) of more than 18% through the forecast period, increasing from $87 million in 2010 to $240 million in 2015.
STUDY GOAL AND OBJECTIVES
This report investigates one part of the global fermentation industry that is rarely analyzed comprehensively: production and use of yeast and yeast–derived products.
Yeast is one of the most versatile microorganisms; it has been used for centuries in the manufacture of food products. It is not only that yeast is able to generate alcohol and thus is essential for the production of any alcoholic beverage such as beer, wine and spirits; it also produces carbon dioxide, which makes it one of the main ingredients in baking. Yeast is rich in protein and as such has a value for feeding but, even more importantly, yeast, through a number of different mechanisms, acts as a probiotic and helps to keep humans and animals healthy. In an autolyzed form, yeast is used as a flavor enhancer; without yeast the bio–ethanol and renewable energy industry is unthinkable. While most of such usages are known, and many of them very popular, the industries and market dynamics behind them are much less known.
There are reports that examine the subject of fermentation–derived products and there are reports that analyze certain sectors in which yeast plays a role, but it is rare that the yeast and yeast–derived product markets are analyzed in detail and comprehensively on a global scale. This is surprising as the global yeast industry has expanded massively over the past 20 years. There are still more than 600 yeast factories in operation, and the probability of new construction is high. But a few international companies dominate new investments.
Yeast manufacturing is a multibillion–dollar business and it is not only beer and baker’s yeast with which such turnovers are generated. The market for feed yeast and for autolysates also developed to the range of $1 billion. Yeast for bio–ethanol manufacturing has a smaller market value, but the availability of high–performing strains is decisive for a competitive bio–ethanol industry.
Yeast grows best on molasses and, while the standard process is not very complicated to operate, the manufacturing of specialized yeasts is nowadays a high–technology undertaking squeezed between rising molasses and energy prices and the need for manufacturing high performing yeast at the lowest prices for highly competitive end–product markets. Margins in yeast production can be substantial as long as some economy–of–scale effects can be exploited and market positions maintained; but it can also erode quickly when technological developments are not introduced fast enough or not appraised appropriately.
This report attempts to elucidate systematically and in detail an industry that, so far, has not been described properly. This report explains how the market is structured, how much volume of which type of yeast product is consumed, which prices are asked in which regions of the world, and what kind of development the industry has enjoyed in the past years. The report also explains why it is believed that during the next years, the yeast industry will continue to prosper, further expand and develop to a business that is expected to grow to a market value of more than $5 billion.
REASONS FOR DOING THE STUDY
The report reviews the global yeast industry with emphasis on nine different types of yeast and yeast–derived products:
Yeast for bio–ethanol manufacturing
Yeast as a by–product from industrial processes
Mineral yeast used in feed and food supplements
Active probiotic yeast used in feed and food supplements
Yeast cell wall extracts: mannans and beta–glucans
Yeast autolysates as fermentation starters and as flavor enhancers
The report provides the most up–to–date information on quantities of different types of yeast manufactured, on price developments and market values, as well as on industry structures. It enables the reader to understand the industry in general and provides a particular insight into the world of yeasts as intermediates and as end products. The report is designed to assist decision–makers in the fermentation industry by providing background information to be considered and to be used in strategic design and particularly in deciding on plant expansions or diversifications. The report should help the reader to understand that yeast manufacturing, on the one hand, is a large global and technically demanding business with some commodity character, but on the other hand still allows the generation of substantial margins, and guarantees volume growth rates, which became rare for many other food and chemical ingredients and intermediates.
SCOPE OF REPORT
After categorizing yeast products, each one is described by first highlighting historic developments and by profiling specific production technologies. Estimations on manufactured quantities follows and typical market prices are given. Distribution and value chains are discussed, particularly when the build–up of values over the chains is exceptional. Future developments are indicated in the context of volume growth and price increases. The industry section starts by profiling the major players in that industry and demonstrates how production is structured and where it is located. The report concludes by discussing possible future developments.
The methodology applied in this report is based on:
Outlining basic production processes for yeast and the provision of a glossary to better understand the terminology used by this industry
Highlighting the dynamics of the end–product markets for which yeast is used
Reviewing market developments for each type of yeast in order to better understand the current situation and positions in specific application sectors
Analyzing and describing time series of consumption for the past 10 to 20 years and profiling the current geographical consumption pattern
Discussing prices and price developments in the context of volume growth, competition and of socio–economic framework conditions
Providing market outlooks through 2015
Profiling the major players in the global yeast business, analyzing their strategies and objectives
Providing a picture of the regional distribution of yeast manufacturing plants
Concluding the report by highlighting a few innovations that are to be researched over the next years.
There is abundant information available on the usage of yeast. Data, however, on quantities of yeast used in different products and processes, on prices, and on interrelationships between technology, markets and consumers are very rare. Such data are thought to be essential for understanding the dynamics of the existing yeast markets and for assessing the potential that the industry still offers. It is the established intimate relationships between relevant companies and the author of this study that allows providing the basis for the high value of this report.
Dr. Ulrich März graduated in 1984 as an agro–economist from the University of Stuttgart, Germany. After 10 years working in the fine chemical industry, Dr. März started an independent consulting business for the food, feed and agro–processing industry. His specialities are the evaluation of the food, feed, and supplement ingredient markets, the design and market introduction of biotechnologically derived products as well as the economics of fermentation processes. Dr. März has authored a number of BCC technical market reports over the last decade.
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The information developed in this report is intended to be as reliable as possible at the time of publication and of a professional nature. This information does not constitute managerial, legal, or accounting advice; nor should it serve as a corporate policy guide, laboratory manual, or an endorsement of any product, as much of the information is speculative in nature. The author assumes no responsibility for any loss or damage that might result from reliance on the reported information or its use.
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