Novozymes sees continued momentum for enzymatic solutions in food and beverage

By Mary Ellen Shoup

- Last updated on GMT

Despite declines in its other divisions, Novozymes saw increased organic sales in food & bevereages (=%%), household care (+1%), and bioenergy (+9%).
Despite declines in its other divisions, Novozymes saw increased organic sales in food & bevereages (=%%), household care (+1%), and bioenergy (+9%).
Novozymes, a global producer of enzymes that controls roughly 48% of the market, is seeing its focus on food and beverage solutions and innovation pay off in 2018.

Globally, enzyme technology has been applied to making detergents, biofuels, feed, and other technical applications, which represents a larger market ($2.45bn) than food ingredients and processing aids ($1.47bn) currently. But, Novozymes sees the food and beverage market as one of the largest opportunities for the use of enzymes since they can perform many functional attributes like improving the quality and nutrition of products while helping companies clean up their labels.

The food and beverage category is a key focus for Novozymes​ and its enzyme technology as the company values an untapped market potential worth nearly $49bn worldwide. However, it’s also a highly fragmented market with more than 300 products across applications worldwide, according to the company.

Novozymes, with a North American headquarter in Franklinton, NC, accounts for roughly 31% of the food and beverages enzyme market, whereas the top five other players (DSM, DuPont, and others) make up 20% of sales. 

Andrew Fordyce, Novozymes executive vice president of food & beverages

“Trends continue towards healthy, ‘clean label’ foods with less additives. Consumers are more aware than ever of the health impacts of the foods they consume,”​ Andrew Fordyce, executive vice president, food & beverages, said.

“We continue to invest in and develop our innovative solutions to help our customers improve the quality of their food and beverage products, and are pleased to see the positive and profitable momentum continue.”

The company reported a Q1 2018 organic sales grow by 2% with its food and beverage division registering a 5% sales increase for the quarter. The company forecasts full-year sales growth of 4% to 6% despite “significant currency headwinds,”​ Peder Holk Nielsen, president and CEO, said.

In comparison, Novozymes' agriculture & feed and technical & pharma saw organic sales declines of 5% and 10%, respectively. 

"There is still some uncertainty in the agriculture-related business, including from recent geopolitical tensions. However, with current insight, we remain firm about accelerating sales growth throughout 2018 and beyond,” ​Nielsen added.

Product innovation across baking and lactose-free dairy

Novozymes has ramped up its product innovation across a multiple food and beverage categories, especially in bakery, one of its core focusses.

Enzymes play a major role in the baking industry as it they can  improve softness, freshness, and dough strength, according to the company. Novozymes also works with manufacturers to replace unwanted ingredients like gums and emulsifiers, common yet increasingly unwanted ingredients in packaged baked goods.

A new innovation and technology center was built in Instanbul, Turkey, featuring a “state-of-the-art baking lab”​ to enable the company to develop region-specific baking solutions, according to Nielsen.

The low-lactose dairy category is another area Novozymes sees massive opportunity, especially with its ingredient Saphera.

Saphera is an enzyme designed for lactose-free dairy like yogurt and other fermented milk products that helps reduce the amount of added sugars while achieving the same sweet taste

“Saphera, our on-trend sugar- and low-lactose solution, continues to perform well across regions into the beginning of 2018, especially through increased sales in Latin America,”​ Fordyce added.

“We continue to see an increase in demand for our F&B solutions in emerging markets as producers look to improve quality, reduce cost, and increase variety for their consumers. One of our long-term focus areas is bringing our innovative solutions closer to our emerging markets customers.”

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