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"Flavour market estimated at $300 m, growing at 10%"
Wednesday, 08 March, 2017, 08 : 00 AM [IST]
Takasago International India Pvt. Ltd was established in Chennai in June 2012. Since its inception just over four years ago, the company has moved into an owned facility at OneHub Chennai, Kancheepuram. With its headquarters in the Tamil Nadu capital and sales offices in Mumbai, Delhi and Bengaluru, it serves a regional and national client base with its varied palette of flavours and fragrances.
In an e-mail interaction with
T T P Shaheel
, the company’s managing director, spoke about the flavour market for food in India.
Where do you see the flavour market for food in the next five years?
The Indian processed food industry is primarily a fragmented and highly competitive market with product and taste innovation becoming profoundly significant for growth. The Indian flavour market, estimated to be in excess of US$300 million, has been growing at an average of 10 per cent. Takasago sees tremendous growth opportunity in this vibrant market, which is fuelled by region- and country-specific preferences. Convenience is a key trend that fuels a different array of products to target different usage spaces – an ideal opportunity for novelty in products to expand into new spaces. These are fuelling growth in new spaces, like in bakery for more indulgence cookies. There is also a huge demand for products that support claims like reduced sugar, natural, high-fibre food. This market demands that companies like Takasago be more dynamic and flexible to address its needs and with innovative and relevant competitive solutions.
What are the growth drivers for the flavour market in India?
India, a young country where over 60 per cent of the population is under the age of 30, is moving from a traditional to an experimentative market. Consumers’ changing lifestyle choices – nuclear families, health and wellness, indulgence, premiumisation and increasing government support to the food processing industry in the forms of investments in post-harvest, cold chain facilities, etc. – fuel growth in horticulture and agriculture. Reforms and developments like these are major drivers to innovate as the market grows.
What are Takasago’s observations on the regulations for food flavours?
As the food market becomes increasingly global, products emerge from complex sourcing chains that limit both traceability and accountability but increase the frequency of threats to food safety. The food and flavour industry is increasingly experiencing tighter controls similar to regulations that have been in place in the life science industry for years. The regulations are becoming more transparent and globalised as well as taking care of the local interests like vegetarian compliance. To enable the players with clarity on national and international requirements, the Food Safety and Standards Authority India (FSSAI) has embarked on a major harmonisation effort between the current Indian food safety regulations and CODEX. The demand from clients with respect to regulatory compliance is also growing. So Takasago needs to keep a constant watch on these regulations and plan to operate within the limits of usage of ingredients for its flavour improvements and developing new novel flavours.
What are the trends observed in the segment?
Flavours, in combination with format innovations, further blur the boundaries between categories that help expand usage occasions. With consumer awareness increasing, the market is also seeing a preference for the health and nutrition platform that revolves around natural, wellness and authenticity, new experiences with new cuisines and with taste sensations. As a global company of Asian origin, Takasago serves its customers with its regional understanding in addressing these new trends. The company believes in bringing the voice of consumers for providing actionable insights from its globally-connected marketing and consumer insights team to monitor the market and consumer trends.
With global taste preferences, consumers also look back for ethnicity and being natural. There is a growing preference for what is in it for me additionally, for which manufacturers should look for areas to improve the nutritional profile of foods and highlight the health benefits. Utilising Takasago’s state-of-the-art technologies like taste solutions and natural flavours, the company is expanding its flavour palate to address the various new trends and to meet its customer innovation requirements.
What are the challenges faced by the flavour sector in India?
India – known for its unity in diversity – needs to serve a diverse population with different preferences. The market has a lot of challenges from the consumers’ end, including convenience versus authenticity, and from the market space, like health and wellness, which demands technology plus flavour solutions. The flavour industry has to be prepared to understand and address the needs of the customer. Apart from being a flavour supplier, the flavour industry needs to take a broader view to deliver total solutions for their needs. Takasago needs to keep expanding the flavour portfolio and also invest in its technology and capabilities to add competitive benefits. While at the company’s research creative end, it has to tackle its greater dependency on natural ingredients for new flavours and taste experiences.
What steps is Takasago taking to overcome the same?
To proactively understand the changing consumer preferences and to tackle the market need, Takasago is investing in soft technologies like consumer insights and market research with its differentiating approaches like TrendSeeds (a proprietary trend tracking system), Consumer Insights Hybrid Approach and BeEPer Insight Panels. Takasago is also investing in research and development (R&D) to explore and discover new flavour creation ingredients from sustainable sources. As a Japanese organisation, it has strict adherence to traceability and its operation standards follow strict procedures to meet the requirements.
To tackle the regulatory requirements, the company has regular interactions with the authorities, educates its global suppliers to meet India-specific regulatory requirements and partners with local and global industry groups like the International Organisation of the Flavour Industry (IOFI), the Fragrance and Flavour Association of India (FAFAI), Flavours and Fragrances (F&F) and academia. Technology, backed with the company’s rich heritage and experience in the other parts of the continent, makes it an ideal partner. Hence, Takasago India will actively be collaborating with customers so as to harness the best of its capabilities to sort solutions and offerings that are innovative, relevant and distinguished.
Brief us about Takasago’s portfolio.
Takasago International Corporation was founded in 1920 as Japan’s first manufacturer of aroma chemicals. In 1936, Takasago International Corporation began to compound flavours and fragrances. Since then, the company has steadily established itself as one that is admired throughout the world for its technologically-advanced and cutting-edge products that are beneficial to society and the community. Takasago has four business divisions –flavours, fragrances, aroma chemicals and fine chemicals. The global Takasago organisation maintains offices, production sites and R&D centres in 26 countries. Through its network of global research, production, creativity and marketing, the company develops products tailored to the needs of individual markets. For more than 80 years, Takasago has developed flavours and fragrances for some of the most successful food, beverage, fine fragrance and household and personal care products. By utilising its technologies and its global network, the company develops high-quality and innovative products. It works together to give its customers the best value and best products.
Brief us about your expansion plans. How much are you investing for the same?
Currently, Takasago is investing in its new five-acre facility at OneHub Chennai, which was inaugurated recently by Satoshi Masumura, the company’s president and global chief executive officer. This facility will cater to India, Sri Lanka and Bangladesh. It has invested over $10 million in India and aims to be amongst the top five players in the country. One amongst the global top five, it has entered the Indian market, which has a lot of opportunities to explore. The market landscape has many home-grown players with a strong presence and experience. Takasago takes pride in its technologies and its people, who have made it the only Asian-origin company on the global charts. Takasago’s rich heritage and experience in the other parts of the continent, coupled with its technologies and our people, makes it an ideal partner to serve this market better.
How will the company be raising the funds?
We are part of Takasago International Corporation, so most of our investments are from internally-accrued funds. Further to this, the company is proud to share that it is among the fastest-growing players in the market. With all this expansion and growth, Takasago is sure that its growth in the Indian market will further fuel its future endeavours.
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