Preservatives are gradually becoming a part of most processed foods and personal care products. In recent times, the increasing lag between production and consumption of perishable commodities has led to a rise in the demand for more efficient and lasting methods of preservation. This is essential in order to ensure freshness and consistent quality.

New analysis from Frost & Sullivan, Indian Market for Preservatives Catering to the Foods and Personal Care Industries, reveals that the market earned revenues of $16.0 million in 2005 and is expected to reach $56.5 million in 2012.

“The Indian food and personal care industries are rapidly moving toward further processing and value addition,” says Frost & Sullivan Research Analyst Aparna Singh. “A combination of rapid urbanization and increasingly hectic lifestyles is fuelling this trend, leading to increased demand for preservatives to sustain products between production and consumption.”

Most food and personal care products are susceptible to decay by microorganisms and oxidation over time. The use of preservative substances, such as antioxidants and antimicrobials is a method to prevent it and extend the shelf life of food and personal care products. Nowadays, preservatives are important in the food and personal care products industries, as they ensure the quality of goods that reach the consumer.

However, while the market is growing, it is presented with challenges on both fronts, the low technology unorganized market that still does not see the need for preservatives, and the emergence of new technologies that do away with the need for conventional preservatives. Moreover, Indian manufacturers are likely to face competition from multinational companies, who are increasingly eyeing this emerging market. Manufacturers, therefore, need to foresee the growth of different segments and plan their product portfolio.

“The preservatives industry in India will experience restricted growth in value due to pressures on profit margins from customers and rising raw material prices,” notes Singh. “Since fast moving consumer goods (FMCG) manufacturers themselves are facing intense competition and lower margins, preservative manufacturers have been unable to charge higher prices for their products.”

Preservative manufacturers need to adopt a two-pronged strategy depending on the targeted end of the market. In the unorganized sector, the challenge is to create awareness regarding the role and usage of these products, while corporate buyers seek other benefits such as new molecules with better safety profiles, products that perform multiple functions, or possess a wider spectrum of antimicrobial activity.