Food Additives Market

Food Additives Market: Consumer Preference for Natural Additives Sway the Market: Global Industry Analysis and Opportunity Assessment 2016-2026

Food Additives Market Outlook

The food additives market is witnessing numerous transformations, as manufacturers operating in the space are aggressively striving to concentrate their brands across the globe. Among the others, Tate & Lyle PLC, in 2019, announced that it has introduced an ultra-low-calorie sugar using the proprietary process as well as the enzymatic conversion of corn.

In addition, in 2017, Cargill Incorporated announced the launch of new carrageenan that is extracted from Satiagel ABN 500 algae. This can be used as a texture variant for food and beverages. In 2017, Nippon Shokubai acquired a halal certification with an intention to respond to the changing consumer sentiments regarding the food additives, especially in the Southeast Asian countries.

Besides this, the food additives market also finds opportunities from the new trend among the millennial populace to try exotic flavours for an enhanced experience. Moreover, growing demand for premium food in developing as well as developed countries are likely to increase the sales of food additives from restaurant chains and food hubs. However, the food additives market is influenced by several growth inhibitors.

The limited solubility of natural food additives plus their high cost make them unattractive. On the other hand, there is an aversion towards artificial food additives, owing to their potential risk on the human body. Hence, consumers are shifting towards additive-free food and beverages, which could negatively impact market growth.

COVID-19 has had an unfailing impact on the food additives market. Since several countries were locked down and restaurant chains were not operational, the demand for food additives reduced to some extent. During this time, a large number of individuals are seeking health over taste, which is likely to create a negative influence even after the COVID-19 scenario on the food additives market. However, re-opening of eateries and demand for ready-to-eat meals are likely to bode well for the growth of the food additives market.

Introduction

Food additives are used across a variety of applications such as bakery & confectionery, dairy & frozen desserts, beverages, meat & poultry products, and others which include sauces, soups, and baby food, in order to increase the sweetness, enhance or add colors, add flavors, and stop the deterioration of food. Within the U.S., there are an estimated 10,000 food additives, including color additives, fat replacers, flavour enhancers, preservatives, stabilizers, and texturizers being used, of which, 3,000 are FDA approved.

Over the years, a huge range of food additives such as preservatives, antioxidants, flavour enhancers, colourants, and sweetening agents are used in the manufacturing or preservation of various food products, namely, packaged foods, functional beverages, bakery goods, dairy products, meat and seafood, snack items, and flavoured and functional water. Apart from the aforementioned list of food additives, enzymes, emulsifiers, acidulants, shelf-life stabilisers, and fat replacers also exhibit a high demand in the food additives market.

The global food additives market is expected to grow at a moderate growth rate over the forecast period. In terms of value, the food additives market is expected to grow at a CAGR of 5.9% during 2016-2026. The global food additives market consumption is estimated to be 3,376 thousand tonnes in 2016, which is expected to experience a CAGR of 5.2% in terms of volume during the forecast period. The global food additives market is expected to reach US$ 83.23 Bn by 2026 from US$ 47.0 Bn in 2016.

Various growth factors will drive the demand for global food additives market in the coming years. A few major factors influencing the food additives market are:

Rising Focus on the Production of Organic Food Products

Growing health concerns across the globe coupled with raising awareness about the associated benefits of organic food products will boost the demand for naturally sourced food additives in the global food additives market. The trends in the food additives market are expected to propel the adoption rate of natural food additive products such as organic preservatives and flavouring agents, natural colourants, stevia-based sweeteners, rosemary extract, and many more.

Health conscious consumers prefer to check the ingredient list on any food product label prior to making a purchase decision. Manufacturers in the food additives market have understood this consumer sentiment, and are working towards creating packaging designs that are more appealing to health-conscious consumers.

Expansion of Convenience and Processed Food in Less Developed Countries

One of the major drivers expected to drive the growth of the food additives market across the globe is the expansion of the convenience and processed food industry in various less-developed countries across the globe. The food industry in regions such as North America and Europe is highly mature, which supports the growth of manufacturers in the food additives market in other regions.

For instance, in countries with rapidly increasing urban populations such as India, China, and Brazil, and regions such as the Middle East, there is an increasing demand for processed food, and the per capita income of consumers is also increasing. Growth opportunities in the food additives market due to a growth in food consumption in regions such as the Middle East and Asia Pacific is prompting various leading manufacturers in the food additives market to set up production units in these regions. Due to this, countries such as China have emerged as the leading producers and exporters of various varieties of food additives.

Increasing Supply Chain Inefficiencies

Another major driver in the food additives market is growing supply chain complexities in the food and beverage industry, such as last mile reach for various food products, transportation costs, and setting up storage facilities, which are various company's expansion strategies. All these factors increase the complexity of the value chain, which, in turn, promotes the demand for food additives in order to reduce the spoilage and wastage costs involved with various food products.

Flavours and Enhancers Spearhead

Flavours and enhancer food additives are majorly responsible for raising the commercial quality of any food and beverage product. In addition to the overall improvement of the nutritional value of consumables, these food additives enhance their structures and aromas as well. Moreover, food and beverage formulators are inclined towards natural and customised enhancers and flavouring agents over artificial enhancers, spurring the introduction of innovative additives in the food additives market.

Food Additives Market: Influential Mergers & Acquisitions

Increasing number of mergers & acquisitions and partnerships in the food additives market will continue to create a strong positive impact on the growth of the food additives market. Some of the most notable recent M&A activities in the food additives market are the acquisition of Cognis by BASF (2010), FMC Corporation’s acquisition of Phytone in 2012, and the acquisition of Diana Group by Symrise in 2014. M&A activities in the food additives market are increasingly favouring the product offerings of leading companies, enhancing their presence in the global food additives market.

Food Additives Market: Analysis and Forecast by Segmentation

Among the various product types analysed in the food additives market, flavouring agents will remain the most lucrative segment, contributing nearly 11.9% share to the total volume in 2016. This segment is projected to reach a volume of around 561.8 thousand tonnes by 2026 end in the food additives market. Emulsifiers will represent an important segment of the food additives market, with an estimated consumption of over 400 thousand tonnes in 2016.

By source, synthetic additives are currently dominating the food additives market, with over 60% market share. However, natural additives are rapidly gaining traction in the food additives market, and may register a consumption of around 1,333.5 thousand tonnes by 2016 end.

Based on application type, the food additives market is segmented into bakery & confectionery, dairy & frozen desserts, snacks & convenience food, beverages, meat & poultry products, and others (including sauces, soups, and baby food). The beverages segment is estimated to remain dominant in terms of value over the forecast period in the food additives market, growing at a CAGR of 7.1% during the forecast period.

Food Additives Market: Analysis and Forecast by Region

Due to the rising adoption of natural food additives in developing countries in Asia Pacific, the food additives market is foreseen to gain a strong foothold in Asia Pacific excluding Japan, especially in Singapore and Australia. The Asia Pacific excluding Japan food additives market is expected to witness a healthy CAGR up to 2026, and account for over 24% share of the global food additives market revenue.

North America, despite representing the largest food additives market in 2016, is likely to witness sluggish growth over the next decade. Asia Pacific excluding Japan will be the fastest growing food additives market, expected to outpace North America’s revenue share by 2026 end. Western Europe is also a major food additives market.

Key Players Analysis: Food Additive Market

Some of the most prominent players in the food additives market are E. I. du Pont de Nemours and Company, Cargill, Incorporated, BASF SE, Alpha Ingredients Srl, Ajinomoto Co., Inc., Kerry Group, Archer Daniels Midland Company, Ingredion Incorporated, Hansen Holding A/S, Novozymes A/S, and Tate & Lyle PLC.

Companies operating in the food additives market are focusing on adopting the micro-encapsulation technique for color delivery system and final product formulation. They develop colors for broad-spectrum foods and beverages. In February 2015, Tate & Lyle PLC, a major player in the food additives market, launched ultra-low calorie sugar, which is made using a proprietary process and enzymatic conversion of corn.

In May 2015, Cargill Incorporated introduced a new range of carrageenans obtained from seaweed, Satiagel ABN 500, as a part of its texturing solutions. Cargill has been conducting research activities to identify solutions for reducing saturated fats in baked goods by 40%, using a mix of starches, vegetable waxes, and emulsions.

Food Additives Market Scope

Attribute

Details

Forecast Period

2015-2016

Historical Data Available for

2016-2026

Market Analysis

US$ Mn for Value and ‘000 Tonnes for Volume

Key Regions Covered

North America, Western Europe, Eastern Europe, Latin America, Asia Pacific Excl. Japan, Japan, and Middle East & Africa (MEA)

Key Countries Covered

U.S, Canada, Mexico, Brazil, Rest of Latin America, Argentina, Germany, United Kingdom, France, Italy, Spain, Nordic Region, Benelux, Rest of Western Europe, Russia, Poland, Rest of Eastern Europe, China, India, ASEAN, Australia, New Zealand, Rest of APEJ, Japan, GCC, North Africa, South Africa, and Rest of MEA

Key Segments Covered

Product Type, Source, Application, Region

Key Companies Profiled

  • Ajinomoto Co., Inc.
  • Cargill Incorporated
  • Archer Daniels Midland
  • Alpha Ingredients Srl
  • Kerry Group
  • du Pont de Nemours and Company
  • Ingredion Incorporated
  •  Hansen Holding A/S
  •    BASF SE
  •   Tate & Lyle PLC
  •   Novozymes A/S

Report Coverage

Market Overview, Key Market Trends, Key Success Factors, Demand Analysis, Market Background, COVID-19 Analysis, Segmental Analysis, Regional Profiling, Market Structure & Competition Analysis

Customization & Pricing

Available Upon Request

Key Segments Covered: Food Additives Market

By Product Type

  • Acidity Regulators
  • Colourants
  • Emulsifiers
  • Enzymes
  • Hydrocolloids
  • Flavouring Agents
  • Preservatives
  • Sweeteners

By Source

  • Natural
  • Synthetic

By Application

  • Bakery & Confectionery
  • Dairy & Frozen Desserts
  • Snacks & Convenience Food (Processed & Frozen)
  • Beverages
  • Meat & Poultry Products
  • Others (sauces, soups, and baby food)

Key Regions/Countries Covered

  • North America
  • Latin America
  • Western Europe
  • Eastern Europe
  • Asia-Pacific Excluding Japan (APEJ)
  • Japan
  • Middle East & Africa (MEA)

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