The speed with which China has built a dominant position in the global supply of food additives and ingredients is truly astonishing, according to a new report from Leatherhead Food Research (LFR).
China now accounts for more than 80% of global vitamin C production and 60% of xanthan gum production, according to LFR.
The world’s third largest economy after the US and Japan, China also accounts for almost two-thirds of global monosodium glutamate production, almost a third (30%) of global production of food colours and vitamins, 40% of the market for emulsifiers, stabilisers and thickeners and a quarter of global starch production. It has also become the world’s leading supplier of soy protein isolate and regained the top spot in global honey production after an import ban earlier in the decade.
While some businesses have been built up over several decades, others have grown at record speed, notes the report. For example, China’s production of flavours and fragrances for food use more than doubled from around 145,000t to 300,000t between 2000 and 2008, while vitamin E production tripled from 10,000t in 2000 to 29,000t in 2005.
Indeed, within a decade, production of certain ingredients has shifted almost exclusively to China as US and European manufacturers have thrown in the towel or struck deals with Chinese producers to try and get a slice of the action. Multinational firms such as Associated British Foods (via British Sugar), Givaudan, Cargill, Firmenich and DSM have also made significant investments in the market, both in production and research and development facilities.
But China’s rapid growth in food ingredients has not been without controversy, said LFR, with some commentators claiming it was able to price competitors out of the market thanks to export subsidies from the government enabling it to sell goods below cost, while some firms did not maintain the same quality, traceability, health and safety and environmental standards as their Western counterparts.
Food safety has also been a major issue following a series of food scares culminating in last year’s melamine scandal, while intellectual property has also proved contentious, with some firms accusing Chinese manufacturers of patent infringement.
As for finished food and drink products, China has also made staggering progress over the last decade, notes the report, and is now a leading supplier of meat, seafood and dairy products. Perhaps more surprisingly, it is also the world’s fifth largest wine-maker (volumes almost doubled between 2005 and 2008).