Food Additives market is projected to grow at a CAGR of approximately 5% over the forecast period. The consumer’s demand for safer and more nutritious food in form of nutritious additives such as vitamins is expected to fuel the growth of the industry. Today, most major supermarkets carry thousands of variety of food on account of additives which allow them to keep out of season foods and variety of new food products. Growing supermarkets is anticipated to have a positive impact on industry.
Consumers are now turning away from artificial / synthetic additives towards more natural additives which have a huge impact on food colors and flavors sector of the industry. Growing consumer demand for foods and drinks which can assist in maintaining the health levels are fulfilled by functional foods that accounts for lower levels of sugar, salt and saturated fat is to drive the demand for the industry. WHO and many other governments are concerned about the rising levels of obesity which have opened up the opportunities for suppliers to develop replacements are expected to increase its importance over the forecast period.
Another major driver for these products is rapid urbanization, changing lifestyle and increasing disposable income of middle class which lead to the expansion of convenience and processed industry in emerging countries. As the market in North America and EU is already mature, manufacturers of foods additives have been forced to look elsewhere in the world for growth which is to drive the market demand in the next eight years.
Moreover, the inefficiencies in supply chain of foods and beverage industry such as storage facilities and transportation costs are increasing the risks of foods spoilage. This is emphasizing on the use of additives which in turn is anticipated to drive the industry over the forecast period.
However, increasing demand for organic foods is to hamper the growth of this industry. The high costs of natural additives and increasing health effects of synthetic additives is to negatively impact the industry growth over next few years.
The customers are demanding for ‘clean label’ from manufacturers and retailers in order to see what ingredients goes into their food products are expected to challenge the industry over next eight years. Moreover, fluctuating prices of raw material are creating uncertainties in the market.
The market is segmented on the basis of product, source and application. On the basis of product the industry includes anti-caking agents, colors, acidulates, enzymes, emulsifiers, flavors, hydrocolloids, preservatives markets and sweeteners. The largest segment in the market is of flavor & enhancer market. Growing customer demand for lower levels of sugar, salt and saturated fat is expected to drive the industry. This is followed by the growth of hydrocolloids which acts as gelling agent and texturizer.
The fastest growing segment is of sweetener which is used as sugar in foods and beverage industry. Rising concerns over low calorie products, tooth decay and diabetes are to increase the demand for sugar substitutes such as high fructose corn syrup, stevia-based sweeteners and high intensity sugars. Preservatives are widely used to protect food from spoilage.
On the basis of source, the market is divided into colors, emulsifiers, enzymes, flavors, hydrocolloids and preservatives. The natural flavors used in enhanced products witnessed significant growth in the industry. The natural food colors industry is also experiencing strong demand in food industry for coloring foodstuffs which includes beetroot juice, paprika, turmeric and lycopene. It not only imparts color to food stuff but also possess health benefits.
On the basis of application, the market is divided into beverages, bakery & confectionary, dairy & frozen foods, convenience foods and sauces, condiments, spices, & dressings.
Europe dominated the market in the near past on account of growing importance of functional ingredients which incorporates the properties such as extension of shelf life, flavor and emulsification. In Europe, 80% of the consumers now prefer their food to be free from artificial additives. Increasing manufacture of food products such as beef in Russia is to drive the market demand over the forecast period. Asia-Pacific market is expected to grow at highest CAGR owing to the growth in food & beverage sector which is greatly influenced by consumer’s awareness for natural and healthy food stuffs as well as convenience foods. Middle is anticipated to be a high potential market on account of growing consumption of red meat particularly in Saudi Arabian region.
Major players in the market are Cargil Inc., BASF SE, Archer Daniels Midland Company, E.I. Dupont , Kerry Group, Evonik Industries AG , Ingredion Incorporated, Tate & Lyle PLC , Chr. Hansen Holding A/S and Novozymes A/S.
In May 2016, Ventura Foods acquired Cargil’s dressings, sauces and mayonnaise business to operate more efficiently and provide enhanced service to its customers.
In Feb 2016, ADM acquired Morocco-based corn wet mill that produces native starch and glucose from Tate & Lyle to add to its global sweetener and starch footprint.
