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    Breaking News

    Global Food Additives Market to Exceed $64.22 Billion by 2020

    Growth attributed to consumer demand for safe, natural and convenient processed food offerings.

    08.25.15
    The market for food additives is expected to surpass $64.22 billion by 2020; growing at a CAGR of 5.5% during the forecast period 2015-2020, according to a report from market research firm Mordor Intelligence.
     
    Food additives are used to enhance the taste, color, texture of food as well as to maintain the freshness and nutritional content. In processed and packaged foods, ensuring food safety and quality—starting from transportation to farm to fork and storage facilities— is a major concern. Food additives are used to meet this demand.
     
    According to Food And Agriculture Organization Of The United Nations
    Statistics Division (FAOSTAT), the per capita food consumption in industrialized economies is observed to be 3440 kcal per capita per day, while the transition economies account for 3060 Kcal per capita per day as of 2015. Countries are, and must align their food strategies to not only meet the food security demands but also meet food quality and safety standards.
     
    The upswing in demographic dividend observed in the emerging markets coupled with age-old trend of high consumption of processed foods in developed markets are a major thrust for the rise in obesity levels, coronary and other non-communicable diseases, according to the report. Today, consumers are shifting from fresh foods and are demanding convenient food stuffs, marked with longer shelf life, organic/natural ingredients, and those which can assist in sodium reduction/low fat and weight control.
     
    The processed food market would lose on its key attributes of flavor, texture, taste and shelf-life without the use of food additives. Food manufacturers are shifting the responsibility on to additive manufacturers in order to address these growing consumer demands.
     
    Food Additives find major applications in Fruits & Vegetables, Bakery & Confectionary, Dairy & Frozen products, Oils & Fats, Savory snacks, Meat Poultry & Sea Food products. Growing consumer demand for low-fat options and low wastage costs are expected to drive the demand for Fat Replacers and Antioxidants. Preservatives are particularly considered to be very important in reducing food spoilage due to microbial reactions.
     
    The largest segment in the market is Flavors and Flavor enhancers, which recorded $11.9 billion in 2014. This is followed by Hydrocolloids, which function as texturizer, thickening, stabilizing and gelling agents.
     
    Food Emulsifiers and Food Enzymes are expected to grow at a CAGR of 5.4% and 8% respectively during 2015-2020. Sweetener type is the fastest growing segment, which is seen as an alternative to sugar in food and beverages.
     
    One more major driver in the food additives market is the growing supply chain complexities/inefficiencies in the food and beverage industry; transportation costs, last mile reach for food products, storage facilities, as a part of companies expansion strategies are growing, which is increasing complexity in the farm to fork value chain.
     
    Emerging markets of China and India are expected to overtake US and other matured markets (accounting for 60% of global market) in the processed food, and this will drive the demand for food additives. However, as a large section of consumers in the emerging country are unable to afford processed foods with value added/natural ingredients or preservative-free or clean label products, the market is still high for synthetic food additives.
     
    Companies such as Cargill Inc., DuPont, Kerry Group, ADM, Tate & Lyle, Danisco, Givaudan, Brenntag, Firmenich, Associated British Foods, and International Flavours & Fragrances are aligning their strategies in the natural segments and expanding facilities in emerging markets, thus holding 80% of market share.
     
    The strategies are adopted in Innovation category for the development of natural food additives and functional food ingredients to meet the customer demand. Many foreign companies are entering the emerging economies through partnerships as they see developed countries as matured markets in terms of revenue growth.
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