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| Specialty Food Ingredients Market Growth |
Specialty food ingredients refer to ingredients that provide taste, texture, nutrients and preservatives to food products. They include ingredients such as enzymes, hydrocolloids, antioxidants, acidulants, food coloring, flavors, preservatives and many more. Specialty food ingredients help enhance the textures and flavors of food products, while also extending their shelf life. The growing demand for convenience foods due to busy lifestyles has propelled the demand for specialty food ingredients.
The Global specialty food ingredients market is estimated to be valued at US$ 155.2 Bn in 2024 and is expected to exhibit a CAGR of 5.4% over the forecast period 2024 to 2031.
Key Takeaways
Key players operating in the Specialty
Food Ingredients Market Growth are Naturex, Givaudan, Eli Fried Inc.,
KF Specialty Ingredients, Ingredion, Associated British Foods Plc, Kerry Group,
Agropur Cooperative, Ashland Inc, Archer Daniels Midland Company, Cargill Inc.,
Wild Flavors GmbH, DSM, Diana Group SA, Tate & Lyle, CHR. Hansen, ICL, and
SubNutra.
Key players operating in the specialty food
ingredients are focusing on expanding their product portfolio and capabilities
through mergers and acquisitions. For instance, In August 2021, Archer Daniels
Midland Company acquired facilities, inventory and other assets of Yerbalatina
Phytoactives, a developer of botanical extracts.
Growing demand: The growing demand for clean label, organic and natural
ingredients is driving the demand for specialty food ingredients. Consumers are
willing to pay premium prices for food products with natural specialty food
ingredients.
Technological advancement: Adoption of advanced technologies such as artificial
intelligence by specialty food ingredient manufacturers has helped develop
innovative products and shorten product development time. This is expected to
boost the specialty food ingredients market.
Market Trends
Shift to plant-based ingredients: With the rise in vegan and vegetarian
population, there is a growing demand for plant-based specialty food
ingredients as substitutes for animal-based ingredients.
Clean label trends: Consumer preference for simple, natural ingredients is
prompting manufacturers to replace artificial ingredients and colors with
cleaner specialty food ingredients highlighted on labels.
Market Opportunities
Innovations and new product launches: Continuous innovations to develop new
bioactive compounds from plants and other natural sources will offer lucrative
opportunities.
Emerging markets: With growing incomes and spending on food products, emerging
Asian and Latin American countries are expected to boost demand for specialty
food ingredients over the forecast period.
Impact of COVID-19 on Specialty Food Ingredients Market Growth
The COVID-19 pandemic adversely impacted the growth of the specialty food
ingredients market initially. Nationwide lockdowns imposed temporary closures
of foodservice outlets which are major end-users of specialty ingredients. This
greatly reduced demand from the foodservice sector. supply chain disruptions
also affected the availability of certain ingredients in the early months of
the pandemic. Many ingredient manufacturers faced short-term declines in
revenue and profitability.
However, as people were confined to their homes, grocery shopping and home
cooking increased significantly. This boosted retail food sales and
subsequently, the demand for specialty ingredients from the food processing
industry. Consumers focused more on nutrition, wellness and healthy eating
habits during this period. This shifted market trends favorably towards
healthier products containing specialty functional ingredients. Manufacturers
responded with innovations to meet the evolving needs. The shift towards
e-commerce channels also supported continued market operations.
Going forward, focus on immunity-boosting and preventive healthcare is expected
to further drive the functional ingredients segment. Manufacturers will
introduce cleaner label options to fulfill changing consumer preferences.
Adapting to strict safety and hygiene protocols will remain a key requirement
across supply chains. Digital transformation of operations can help overcome
future disruptions. Overall, while short-term COVID-19 impacts slowed growth,
the long-term outlook for this market remains positive on account of strengthened
megatrends.
Geographical regions where Specialty Food Ingredients Market value is
concentrated
In terms of value, the specialty food ingredients market is highly concentrated
in North America and Europe. These developed regions collectively account for
over 60% of global market revenue. This is attributed to strong demand for new
product developments and premiumized food products with added nutrition and
health attributes. Countries like the United States, Germany, United Kingdom
and France are major demand centers supporting regional market growth through
extensive research and manufacturing capabilities.
Fastest growing region for the Specialty Food Ingredients Market
The Asia Pacific region is poised to be the fastest growing market for specialty
food ingredients over the forecast period. Rapid economic development, growing
health awareness, increasing per capita incomes and westernization of diets are
driving greater use of value-added specialty ingredients in the region. In
particular, countries like China, India and South East Asian nations are
predicted to offer substantive growth opportunities. As domestic food
processing industries expand production of packaged foods, beverages and bakery
products, specialty ingredients consumption will continue rising strongly in
the Asia Pacific market.