Specialty Ingredients Market Size Estimated to Reach $199.6 billion by 2027
Specialty Ingredients market size is forecast to reach US$199.6 billion by 2027, after growing at a CAGR of 5.8% during 2022-2027. Specialty ingredients are food additives that are used to enhance the taste of food items and preserve them for a long time. They also improve the freshness & safety, nutritional value, and appearance of food products. Synthetic pigments, also known as food colorants or color additives, make food more attractive. The change in consumer preferences along with the growing demand for packaged and processed food is one of the major factors driving the market growth for specialty ingredients during the forecast period. The rising health-conscious, growing population and increase in supplementary income among consumers are also driving the market growth for specialty ingredients. According to the Food and Agriculture Organization of the United Nations, the global population is expected to grow to almost 10 billion by 2050, which will drive the demand for food and food ingredients. However, high costs and limited availability of raw materials due to seasonal changes are restraining the market growth during the forecast period.
COVID-19 Impact
The COVID-19 pandemic impacted different industries; one of the few industries that were primarily hit to some extent was the manufacturing industry. The delay in manufacturing activities and shut down different end-use industries such as personal care, food & beverages in both developed and developing nations impacted the market growth for specialty ingredients during covid-19. However, the specialty ingredients industry faced problems related to the supply chain, lack of workforce, and lack of raw materials supply among others. The governments in various countries have given some special permission to food and pharmaceutical companies during the covid-19 pandemic. So the demand for specialty ingredients has been impacted on a small scale compared to other markets.
Specialty Ingredients Market Segment Analysis – By Type
The functional food ingredients segments accounted for approximately 8% of the market share in 2021 and are estimated to grow at a significant CAGR during the forecast period. Functional food ingredients are bioactive compounds used in the manufacture of functional food products. Functional food offers various health benefits that extend beyond its nutritional value. Functional food includes dairy products, beverages such as tea, coffee, fruits, vegetables, and others. The growing consumption of these products by numerous end-users such as sports nutrition, clinical nutrition, and weight management is supporting the market growth for the functional food ingredients segment. Functional food improves mental energy, immune system strengthening, improved bone health, cholesterol management, improve heart health, and other benefits. These are some of the major driving factors driving the market growth for the specialty ingredients market. According to the data published by USDA, U.S. milk production totaled 223.2 billion pounds in 2020 and an increase of 4.8 billion pounds over 2019.
Specialty Ingredients Market Segment Analysis – By Application
The food & beverage segment accounted for more than 33% of the market share in 2021 and is estimated to grow significantly during the forecast period. The increasing number of food processing companies along with the growing consumption of processed food is supporting the market growth for food & beverage segment. According to the facts published by USDA, there are approximately 36,486 food processing plants in the United States. These plants include different types of food processing including, meat processing, dairy processing, bakery processing, oil processing, and others. The United States Department of Agriculture reported that food industry generated approximately US$1.7 trillion in 2019 in the United States. Hence the growth in the food industry will drive the market for specialty ingredients market. The personal care segment is also expected to register significant growth during the forecast period. According to Cosmetics Europe, the European cosmetics products market is valued at USD67.2 billion at a retail sales price in 2020. Hence the growth in usage of personal care products is also driving the market for the specialty ingredients market.
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Specialty Ingredients Market Segment Analysis – By Geography
Asia Pacific region held a significant share in the Specialty Ingredients market in 2021, up to 38%, owing to the rapid growth in food & beverage, personal care, and pharmaceutical industries in the region. The presence of developing nations such as India and China is driving the market growth in the region. Abundant raw material sources and the availability of a workforce also support the regional demand. The presence of leading food & beverage and personal care manufacturing companies such as Nestle, PepsiCo, the Coco-cola company, LOreal SA., The Procter & Gamble., Beiersdorf AG., Unilever PLC., and others are supporting the regional growth during the forecast period. The growing FDI in the Asia Pacific region is driving market growth. According to the 2021 World Investment Report published by UNCTAD, FDI inflows into China increased by 6% in 2020, to USD 149 billion, up from USD 141 billion in 2019. According to the facts published by China Chain Store & Franchise Association, China’s food and beverage (F&B) sector reached approximately US$595 billion in 2019. These are some of the major driving factors supporting the regional growth during the forecast period.
Specialty Ingredients Market Drivers
Growth demand for nutritional and fortified food
The demand for fortified food from consumers is expanding at a rapid pace. Fortified foods are foods with nutrients added to them and they help to boost the nutritional value and benefit the health of consumers. Food ingredients such as vitamins, prebiotics, minerals, amino acids, and antioxidants, are the key ingredients of fortified food. The health-conscious population is rapidly expanding in both emerging markets and developed markets are driving the demand for the fortification of food. Various factors such as increasing instances of chronic diseases and micronutrient deficiencies, growth of the middle class in emerging economies, new government fortification programs, are also supporting the market growth. According to Invest India data, the domestic food processing industry employs approximately 1.93 million people in around 39,748 processing units with fixed capital of US$32.75 billion. The country also produced approximately 198.4 mn tonnes of milk during 2019-20 and export of meat, dairy and poultry products increased from US$483.5 mn in April-June 2020 to US$1022.5 mn in April-June 2021.
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Specialty Ingredients Market Challenges
High cost and limited availability of raw materials
Price is one of the major restraining factors in the specialty ingredients market. Functional foods and premium products are comparatively high prices, due to the ingredients used in them. Specialty ingredients are relatively expensive, owing to their superior quality and properties. High investments are required for the R&D of specialty ingredients because they are majorly used in the food, and pharmaceutical industries. Also, highly sterilized and technical equipment is required for the manufacturing and extraction of various specialty ingredients.
Specialty Ingredients Industry Outlook
Technology launches, acquisitions, and R&D activities are key strategies adopted by players in this market. Specialty Ingredients top companies include:
Cargill
ADM
DuPont
Ingredion
Kerry
DSM
Chr. Hansen
Sensient
Tate & Lyle
Givaudan
Biocatalysts
Omega Protein and Other Companies
Recent Developments
In May 2021, Cargill launched a new named EpiCor, which is a dried yeast fermentate clinically and used use in certain foods and beverages. The product will modulate the gut microbiota and provide immune system support
July 2020, Cargill launched a new sweetener called “C TruSweet 01795”, to meet the growing demand for label-friendly and reduced sugar alternatives in Europe. This will also strengthen the company’s sweetener portfolio.
Key Takeaways
The Asia Pacific is expected to register the highest CAGR of 6.6% during the forecast period (2021-2026). Rapid urbanization, emerging economies, and the growing population are the major factors driving the market growth.
The food & beverages segment is expected to hold a major market share during the forecast period 2022-2027.
The increasing market for personal care and the growing importance of specialty ingredients among end -users are the key factors driving the Specialty Ingredients market.
Relevant Report:
Personal Care Specialty Ingredients Market
https://www.industryarc.com/Research/Personal-Care-Specialty-Ingredients-Market-Research-503593
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