Plant sterols survive tight economy, says Cognis

The company yesterday reported a sharp decline in sales volumes for the first half of 2009 as it struggled to cope in an “extremely difficult”​ market environment.

However, stable sales of plant sterol ingredients helped push up the overall performance of the group’s food ingredients division, and reflects a continued consumer demand for cholesterol-lowering foods, said Cognis.

De-stocking effect​

The bulk of the declines were seen in the firm’s chemicals and construction businesses, which experienced “a real downturn in demand”,​ Cognis told NutraIngredients.com. In contrast, the more moderate sales decline in the group’s health and food ingredients division reflected a cautious approach from food and supplements producers, rather than a lower market demand for these products, said the firm.

Sales for Cognis’ Nutrition & Health division, which includes food and supplement ingredients as well as pharmaceutical ingredients, declined 8 per cent to €167m. Overall sales volumes in the first six months of 2009 declined by 15 per cent to €1,302m.

“We believe the lower sales in our Nutrition & Health division was a result of a de-stocking effect. Producers have been very cautious in the economic crisis and have been using up their existing stocks to very low levels before ordering new products. They’ve been reluctant to put in new orders because they didn’t know if consumer demand would get weaker,”​ said Susanne Marell, vice president of corporate communications at Cognis.

“But it’s really been a safety mechanism because if you look at market studies of how consumers behaved during this crisis there has not been much change​,” she said.

The market studies tracked by the company have reflected its sales performance in different divisions, revealing “relatively stable”​ demand for consumer goods products. In contrast, demand for all industrial applications has fallen significantly.

Indispensible health​

Plant sterols and pharmaceutical ingredients performed particularly well within the six months, with demand remaining steady and holding up overall division sales.

“It seems that functional foods that lower cholesterol levels have been stable in consumer demand,”​ said Marell, adding that the most popular applications for plant sterols were primarily yoghurts and spreads.

Similarly, pharmaceutical ingredients continued to sell well as “demand for medicine is not dependent on economic cycles”. ​