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Total market value of food additives in the U.S. increased from $4.3 billion in 2007 to $4.8 billion in 2012, a compound annual growth rate (CAGR) of 2.1%.
October 24, 2013
By: Sean Moloughney
Out with the old, in with the natural. Demand by consumers seeking more natural ingredients in their food products has forced the U.S. food industry to curtail its half-century-plus reliance on synthetic and artificial ingredients, according to a new report from Rockville, MD-based market research publisher Packaged Facts titled “Food Additives: The U.S. Market.” Due to the uptick in consumer interest in natural formulations, as well as other factors, new opportunities for experimentation and advancement within the food additives segment are prevalent and will help spur market growth as we march toward 2014 and beyond. “The current climate toward additives is driving new innovations, especially but not exclusively for new natural formulations. Natural color additives, flavor enhancers, carbohydrate and protein based fat replacers, and preservatives are critical areas for new additive research, testing, and development,” said David Sprinkle, Packaged Facts research director. Consumers affect food additive markets because the types of food that shoppers purchase inform the types and quantities of food additives that are needed. In addition to natural formulations, other current and anticipated future trends that influence food additives markets include consumer interest in low fat foods and low fat diet foods. Interest in such foods had waned somewhat during 2000 through 2010, in an apparent backlash against the low fat craze of the 1990s. However, consumers have changed their mind again, and are back to cutting fat out, rather than slathering it on. Color remains a critical factor in food appeal and marketability. Growth in color additives is being driven largely by a transition, in many products and product lines, away from artificial colors and toward natural colors. The latter are becoming increasingly available in a growing number of colors. However, cost and formulation issues remain critical factors within the natural color additives market. Convenience foods continue to support market development, although application of additives is somewhat segmented within this sector. Additionally, consumer concern over food additives and their healthfulness and safety are absolutely critical within the current market ecosystem. The total market value of food additives in the U.S. increased from $4.3 billion in 2007 to $4.8 billion in 2012, a compound annual growth rate (CAGR) of 2.1%. Packaged Facts projects market values will increase more rapidly during 2013 through 2018, from $4.9 billion to $5.8 billion, resulting in a CAGR of 3.5%. Market growth will be led by color additives, a category that will continue to expand based on increasing penetration of new and costly natural colors, driving a CAGR of 7.8%. Other additives with moderate to strong growth will include preservatives (based primarily on growth in emerging natural formulations, which will offset continued losses in conventional and synthetic preservatives; CAGR of 4.7%); stabilizers, thickeners, binders and texturizers (CAGR of 3.9%), fat replacers (CAGR of 3.9%) and flavor enhancers (CAGR of 3.7%).
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