Weak margins spur protein makers to target functional foods

"Not only will these value-added products expand the application base, but as they have fewer substitutes, they tend to be far less price sensitive compared to other protein products,"​ said Frost & Sullivan​ programme manager, Kathy Brownlie.

Functional proteins are expected to increase applications and attract new customers, growing the European protein ingredients markets from last year's value of €3.77 billion to €4.43 billion in 2011, estimates the firm's new report.

High-value milk protein isolates and concentrates have been one of the fastest growing sectors in recent years and account for half of the total market.

In the future, value-added protein manufacturers that market their products for a particular niche market stand to make the biggest gains, predicts Brownlie.

"Increasing the amount of marketing documentation that highlights the nutritional benefits of specific protein sources will help raise the profile of protein ingredients as nutraceuticals in the food ingredients industry,"​ she added.

Blending and pre-mix companies are also likely to play an increasing role in this market in the future.

The demand for nutritionally balanced proteins is increasing, especially from markets such as diet and sports supplements, energy snacks and beverages and functional foods. Manufacturers often blend protein ingredients lacking in nutritional qualities with other protein or ingredient sources to provide the required nutrition profile.

Yet protein makers need to work harder to create a "healthy" image of protein sources, especially in the aftermath the bovine spongiform encephalopathy (BSE) crisis.

The market will also see increased partnership with raw material producers that will allow manufacturers to influence the properties of proteins at their origin.