Global Specialty Food Ingredients Market - Growth, Trends and Forecasts (2018 - 2023)
The global specialty ingredient market was valued at USD 6.57 billion in 2016 and is expected to grow at a CAGR of 6.31% during the forecast period of 2018-2023. Owing to changing lifestyles and increasing purchasing power of consumers, the demand for convenience foods is soaring. These factors have boosted the growth of the global market. Several functional advantages of specialty ingredients are influencing the market’s growth. The market has a scope for high profitability, which enables new players to enter the market.
Increasing Demand for Processed and Packaged Food
The global processed food market was valued at USD 4,601 trillion in 2016, and is anticipated to undergo significant transformations during the forecast period, owing to the direct impact of some mega trends, such as emergence of new business models, and socio-economic developments. Specialty food ingredients are a vital part of a wide range of processed foods, thereby contributing to competitiveness in the food & beverage industry. There is a strong correlation between global specialty food ingredient market and global processed food market, with the former’s application and advanced functional benefits being the key aspects.
Consumers are more aware of label claims and ingredient lists and their nutrition profiles. People are taking proactive participation to enhance health and fitness in everyday life. This trend has been driving the demand for specialty food ingredients.
The regulations for specialty food ingredients are strict in regions such as, Europe and the Americas. For instance, in Europe, the uncertainty in legal regulations such as, the need to change the label claim or delay in ingredient/product launch, can cause negative economic implications on the manufacturer, in terms of additional costs. The delay in providing final authorization to specialty food ingredients results in lower levels of investment and value addition. In the long run, this impacts the innovation and competitiveness in the market.
Sweet and Savory Snacks Market to Grow at a Faster Rate
Companies are coming up with a large variety of non-alcoholic ferments as specialty food ingredient in the beverages, like soft drinks, and malt-based juices. The non-alcoholic ferments reduce the calorie content by 50% in fruit juice at 100% fruit content. The malt-based drinks are gaining popularity in the Middle East and central Europe.
With the availability of customized bakery ingredient, including non-fat dairy alternatives, liquid whole egg alternatives, and dough ingredients, which contain fat replacement properties and provide crispy texture, and more even as well as tender structure than eggs in cakes.
The confectionery segment in the global specialty food ingredient market was valued at USD 3.3 billion in 2016 and is expected to grow at a CAGR of 6.8% during the forecast period. The most successful confectionery options were those featuring new, exotic flavors, and were healthy. Chips and crisps, followed by fruit and nut mixes, were the most preferred ones. The consumption rate of sweet and savory snacks is expected to rise by the launch of new specialty flavors and healthier innovations.
North America Holds the Major Market Share for Specialty Food Ingredients
The market for specialty food ingredients in North America is driven by rising rates of diabetes and obesity, which is warning consumers to focus on healthier lifestyles, and thus, fueling the demand for specialty food ingredients. Though mainstream retailers account for the largest share of specialty food sales, they are growing almost at the same rate as specialty food and natural food stores. In Europe, the focus is on low-saturated fats and there is a nascent movement to impose taxes on their consumption (with mixed results, e.g. Denmark) and some discussion on plain packaging in high-fat snack categories. Increasing consumption of processed food in developing economies such as India and China, and the growing GDP are likely to drive the demand for specialty ingredients across the region.
Major Players: INGREDION, CARGILL Inc., DUPONT, TATE AND LYLE, KERRY GROUP, ROYAL DSM, SENSIENT TECHNOLOGIES, GIVAUDAN, ARCHER DANIELS MIDLAND (ADM), BASF GROUP