Internationalisation of eating habits: cinnamon is commonly used in foods and beverages throughout Europe, e.g. in bakery products, cereals, sweet, tea and curries. In Europe, a large South Asian community uses cinnamon in its cuisine. This community (most notably in Western Europe) is still growing steadily, also in other regions. Therefore, demand in these segments is likely to increase.
Limited innovation in processing: cinnamon harvesting is labour intensive and can account for up to 60% of the total cost of production. The peeling of the bark from stems is usually done by hand by skilled peelers. Machines are being developed that might bring down processing costs, but usually this affects the quality of the cinnamon. As the quality of cinnamon is also judged by its appearance (broken or entire quills) hand-peeled cinnamon is aimed at the high-end market.
Steam sterilisation is an effective way of combating microbiological contamination. It can earn suppliers a significant premium if they are able to supply steam-sterilised cinnamon, sterilised at source. Investment in sterilisation equipment can be very costly (up to €1 million). An important downside of steam sterilisation is that it negatively affects the volatile oil content, which produces the flavour. In addition, it can change the colour and properties of cinnamon. For example, the food thickening properties of cassia are impaired by steam sterilisation. It therefore depends strongly on your buyer whether he/she will require steam sterilisation and is willing to pay for it.
Coumarin consumption subjected to more stringent scrutiny: coumarin is a moderately toxic, fragrant organic chemical compound found in cinnamon, especially in cassia. In response to health concerns, the amount of coumarin in foodstuffs is limited by European legislation. A recent study by the Danish food safety authority has shown that the famous Danish cinnamon roll significantly exceeds the limit for daily intake. The Danish Bakery Association was able to react to these concerns by getting cinnamon rolls reclassified as traditional food so that they can maintain their current product composition. The effect on the demand for cinnamon (especially in Denmark) is not measurable, but consumers are likely to be more cautious in future.