Food Additives Market to Reach US$39.8 bn by 2021

Competitive landscape of the global food additives market depicts an intense rivalry among established as well as new players, finds Transparency Market Research (TMR). Key manufacturers in the global food additives market are considering several innovative strategies to stay ahead of others. Global food additives manufacturers are constantly upgrading product portfolio, quality, and technology so as to consolidate their presence in the food processing industry. Some of the prominent players operating in the global food additives market are Cargil, Ajinomoto, DuPont, BASF, Adani Wilmer, and Archer Daniels Midland Company. The competitive landscape of the global food additives market is likely to see a fragmented nature, as more players are showing interest in the food sector owing to promising avenues. 

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The global food additives market stood at US$31.4 bn in 2014 and is projected to expand at a steady CAGR of 3.40% during the forecast period of 2015–2021. The global food additives market may reach valuation of US$39.8 bn by the end of 2021. 

Of various types in the global food additives market, flavors and enhancers are likely to gain substantial attention among end-use industries. This is due to their increased consumption in the developing countries. Regionally, in 2014, Europe led the global market and held a share of 30.1% in the market, followed by Asia Pacific. However, with changing market conditions, Asia Pacific is predicted to surpass Europe market by 2021. 

Increasing disposable income boost global food additives market in developing country 

On account of increasing disposable income of citizens especially in developing countries, the lifestyle of population is shifting toward more comfort. In that course, processed and packaged foods are witnessing a major boost. Manufacturers are emphasizing on the food quality including its color, texture, taste, and smell to stay ahead in the global food additives market. Also, the adoption of additives reduce the spoilage and wastage cost. A few additives increases the nutrition value of the food, which is one reason global food additives market is witnessing a rise. In the years to come, global food additives market is continuously looking for healthy substitutes due to the prevailing health consciousness among the youth population. Low-calorie additives will be among the most sought-after characteristic in nearly every type of food and beverage product. 

Strict regulatory control obstructs the growth of global food additives market 

Several factors restrain the steady growth of the global food additives market. Factors such as high inflation, stringent regulations for ensuring food quality, changing food habits, and health-related may dampen the prospects of the global food additives market to an extent. Moreover, the high cost of some food additives compared to other synthetic food is an important factor hampering their uptake. Although natural additives is expecting a high growth over foreseeable future, at present they are perceived as premium products. Also, manufacturers of food additives are in constant pressure to meet different government directives in different region. Nevertheless, rising inclination of end users toward natural food additives will open new, exciting avenues in the market.

Food Additives Market to Reach US$39.8 bn by 2021, Increasing Consumption to Aid in Rap-id Expansion

Competitive landscape of the global food additives market depicts an intense rivalry among established as well as new players, finds Transparency Market Research (TMR). Key manufacturers in the global food additives market are considering several innovative strategies to stay ahead of others. Global food additives manufacturers are constantly upgrading product portfolio, quality, and technology so as to consolidate their presence in the food processing industry. Some of the prominent players operating in the global food additives market are Cargil, Ajinomoto, DuPont, BASF, Adani Wilmer, and Archer Daniels Midland Company. The competitive landscape of the global food additives market is likely to see a fragmented nature, as more players are showing interest in the food sector owing to promising avenues. 

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The global food additives market stood at US$31.4 bn in 2014 and is projected to expand at a steady CAGR of 3.40% during the forecast period of 2015–2021. The global food additives market may reach valuation of US$39.8 bn by the end of 2021. 

Of various types in the global food additives market, flavors and enhancers are likely to gain substantial attention among end-use industries. This is due to their increased consumption in the developing countries. Regionally, in 2014, Europe led the global market and held a share of 30.1% in the market, followed by Asia Pacific. However, with changing market conditions, Asia Pacific is predicted to surpass Europe market by 2021. 

Increasing disposable income boost global food additives market in developing country 

On account of increasing disposable income of citizens especially in developing countries, the lifestyle of population is shifting toward more comfort. In that course, processed and packaged foods are witnessing a major boost. Manufacturers are emphasizing on the food quality including its color, texture, taste, and smell to stay ahead in the global food additives market. Also, the adoption of additives reduce the spoilage and wastage cost. A few additives increases the nutrition value of the food, which is one reason global food additives market is witnessing a rise. In the years to come, global food additives market is continuously looking for healthy substitutes due to the prevailing health consciousness among the youth population. Low-calorie additives will be among the most sought-after characteristic in nearly every type of food and beverage product. 

Strict regulatory control obstructs the growth of global food additives market 

Several factors restrain the steady growth of the global food additives market. Factors such as high inflation, stringent regulations for ensuring food quality, changing food habits, and health-related may dampen the prospects of the global food additives market to an extent. Moreover, the high cost of some food additives compared to other synthetic food is an important factor hampering their uptake. Although natural additives is expecting a high growth over foreseeable future, at present they are perceived as premium products. Also, manufacturers of food additives are in constant pressure to meet different government directives in different region. Nevertheless, rising inclination of end users toward natural food additives will open new, exciting avenues in the market.

Rising Demand for Functional Food to Work in Favor for Food Additives Market

The global food additives market is highly fragmented with a wide range of products and an equally large number of market players, working for the food industry. The growth in the food and beverages industry directly impacts the growth of the food additives market. The manufacturers in the food additives market have to consistently modify their products to meet the requirements of customers. Of late, customers are demanding newer flavors, gelatin-free, low fat, and color free products. Thus, companies are focusing on these customer requirements and launching newer products from time to time, Transparency Market Research finds in a new study. 

Additive makers in the market comprise small, medium, and large size companies that work with different market and product focus. The major players in the market include Cargill, Danisco, Givaudan, Archer Daniels Midland, BASF, and Sensient Technologies Corporation. These players collectively accounted for a massive 68.5% of the global food additives market in 2011. 

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The increasing prevalence of obesity, cancer, cardiovascular disorders, and other health issues have strongly created a demand for functional foods that benefits for the prevention, management, or the treatment of chronic diseases. This has spurred a growth in the demand for functional food additives. Increasing cases of obesity among teenagers have fueled the demand for additives such as hydrocolloids, emulsifiers, vitamins, and minerals. Apart from this, the growing population worldwide has led to a growth in the food and beverage industry, which in turn is driving the demand for food additives. 

Strict Monitoring by Regulatory Bodies to Hamper Growth of Food Additives Market 

The U.S. Food and Drug Administration (FDA) has set safety standards that needs to be complied with, so that food additives can be used commercially. Rigorous testing is being done to determine the safety of additives. This can hamper the growth of the market. Another challenging factor includes the difficulty in working with natural additives. The demand for natural additives is growing high among the health conscious consumers and suppliers are unable to meet the demands. Natural flavors such as ribonucleotides and monosodium glutamate have several health benefits associated with them. As such, manufacturers are forced to focus on natural sources for developing natural food additives. However, this is proving to be a challenging task owing to the shortage of raw material supply and difficulty in working with natural sources.

Availability of Synthetic Additives at Cheap Prices to Provide Growth Opportunity to Manufacturers in Emerging Countries 

Although the rising health awareness among consumers is driving the demand for natural food additives, the use of synthetic additives is still acceptable in the emerging economies. The rising demand for food and beverages and the availability of synthetic additives at affordable prices is driving their demand. Another factor why synthetic additives are being preferred to their natural counterparts, is the fact that natural additives have low shelf life. Moreover, natural additive products are being perceived as premium products and thus, are extremely expensive as compared to synthetic additives. 

By product, the flavors and enhancers segment led the market in 2014 and will continue to retain its leading position in the coming years, states a TMR analyst. By source, the artificial segment led the market in 2014 and will continue to do so by the end of 2021. By geography, the global food additives market was led by Europe in 2014. However, Asia Pacific is expected to take over the leading position by 2021. 

According to the report, the global market opportunity in food additives will rise from US$31.43 bn in 2014 to US$39.85 bn by 2021 expanding at a 3.4% CAGR from 2015 to 2021.

Food Additives Market Poised for Steady Growth in the Future

The global food additives market is highly fragmented with a wide range of products and an equally large number of market players, working for the food industry. The growth in the food and beverages industry directly impacts the growth of the food additives market. The manufacturers in the food additives market have to consistently modify their products to meet the requirements of customers. Of late, customers are demanding newer flavors, gelatin-free, low fat, and color free products. Thus, companies are focusing on these customer requirements and launching newer products from time to time, Transparency Market Research finds in a new study.

Additive makers in the market comprise small, medium, and large size companies that work with different market and product focus. The major players in the market include Cargill, Danisco, Givaudan, Archer Daniels Midland, BASF, and Sensient Technologies Corporation. These players collectively accounted for a massive 68.5% of the global food additives market in 2011.

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Rising Demand for Functional Food to Work in Favor for Food Additives Market

The increasing prevalence of obesity, cancer, cardiovascular disorders, and other health issues have strongly created a demand for functional foods that benefits for the prevention, management, or the treatment of chronic diseases. This has spurred a growth in the demand for functional food additives. Increasing cases of obesity among teenagers have fueled the demand for additives such as hydrocolloids, emulsifiers, vitamins, and minerals. Apart from this, the growing population worldwide has led to a growth in the food and beverage industry, which in turn is driving the demand for food additives.

Strict Monitoring by Regulatory Bodies to Hamper Growth of Food Additives Market

The U.S. Food and Drug Administration (FDA) has set safety standards that needs to be complied with, so that food additives can be used commercially. Rigorous testing is being done to determine the safety of additives. This can hamper the growth of the market. Another challenging factor includes the difficulty in working with natural additives. The demand for natural additives is growing high among the health conscious consumers and suppliers are unable to meet the demands. Natural flavors such as ribonucleotides and monosodium glutamate have several health benefits associated with them. As such, manufacturers are forced to focus on natural sources for developing natural food additives. However, this is proving to be a challenging task owing to the shortage of raw material supply and difficulty in working with natural sources.

Availability of Synthetic Additives at Cheap Prices to Provide Growth Opportunity to Manufacturers in Emerging Countries

Although the rising health awareness among consumers is driving the demand for natural food additives, the use of synthetic additives is still acceptable in the emerging economies. The rising demand for food and beverages and the availability of synthetic additives at affordable prices is driving their demand. Another factor why synthetic additives are being preferred to their natural counterparts, is the fact that natural additives have low shelf life. Moreover, natural additive products are being perceived as premium products and thus, are extremely expensive as compared to synthetic additives.

By product, the flavors and enhancers segment led the market in 2014 and will continue to retain its leading position in the coming years, states a TMR analyst. By source, the artificial segment led the market in 2014 and will continue to do so by the end of 2021. By geography, the global food additives market was led by Europe in 2014. However, Asia Pacific is expected to take over the leading position by 2021.

According to the report, the global market opportunity in food additives will rise from US$31.43 bn in 2014 to US$39.85 bn by 2021 expanding at a 3.4% CAGR from 2015 to 2021.

This information is based on the findings of a report published by Transparency Market Research titled “Food Additives - Global Industry Analysis, Size, Share, Growth, Trends, and Forecast 2015 - 2021.”

The global food additives market is segmented as follows:

Product

• Flavors and Enhancers
• Sweeteners
• Enzymes
• Colorants
• Emulsifiers
• Food Preservatives
• Fat Replacers

Source

• Natural
• Artificial

Food Additives Market: Huge Growth Opportunities for Synthetic Food Additives Lie in Developing Nations

The global food additives market is fragmented with large number of players such as Archer Daniels Midland Company (U.S.), E.I. DuPont (U.S.), Cargill, Incorporated (U.S.), Kerry Group Plc (Ireland), CHR. Hansen Holding A/S (Denmark), and BASF SE (Germany). Players are increasingly focusing on developing food additives which suit the demand of food and beverage manufacturers who require very specific characteristics in their product. Players are also focusing on collaborating and acquiring other companies so as to expand their product portfolio and carry out joint ventures for the research and introduction of new products, states a new research report on food additives market by Transparency Market Research (TMR).

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According to Transparency Market Research, the global food additives market will rise to US$39.8 bn by 2021. On the basis of product, the global food additives market is estimated to be led by the flavor enhancer segment. The fat replacers segment is predicted to take up the second position in the food additives market. By source, the market is estimated to be led by the artificial food additives segment. However, it is the natural food additive segment which will witness fastest growth in the period from 2015 to 2021, stated a TMR analyst.

Asia Pacific to Outnumber Europe and Emerge Most Lucrative Regional Segment

On the basis of geography, the market was led by Europe in the past with Asia Pacific in the second position. However in the years to come it is expected that Asia Pacific will overtake Europe in terms of leading regional segment and continue to do so throughout the forecast period. The growing population in Asia Pacific and high demand for food and beverage by this population will create a heightened demand for food additives. Busy lifestyle and the growing trend of working women will fuel the sales of convenience foods which in turn will propel the growth of the food additives market. The processed foods sector in countries such as India will also drive the demand for food additives market in the region.

Europe will continue to account for high contribution to the revenue of the food additives market as the demand for novel flavors and taste will continue to drive the processed food sector in the region. Europe is anticipated to witness a burgeoning demand for natural food additives on account of the growing incidences of diabetes and obesity and increasing awareness among people about the benefits of everything natural.

Growing Demand for Functional Additives due to Increasing Health Concerns to Drive Growth
One of the key factors driving the growth of the food additives market is the increasing demand for functional food additives on account of the rising health concerns among consumers across the globe. There are several growth opportunities for synthetic additives in developing nations despite natural additives becoming increasingly popular among other nations due to the trend of using and consuming everything natural.

Need To Increase Shelf Life to Drive Demand from Food and Beverage Manufacturers

Food and beverage manufacturers are increasingly incorporating additives such as emulsifiers, enhancers, and enzymes to increase the shelf life and maintain emulsification and freezing characteristics of their product offerings. This is boosting the demand for food additives. Food additives are also added in various food products to enhance their taste, appearance, and for preserving the flavor. Food additives such as vinegar, sulphur dioxide, and salt are being used at homes, driving the growth of the global food additives market.

This review is based on Transparency Market Research’s report, titled “Food Additives Market By Type (Flavors and Enhancers, Sweeteners, Enzymes, Colorants, Emulsifiers, Food Preservatives, Fat Replacers) and By Source (Natural and Artificial) - Global Industry Analysis, Size, Share, Growth, Trends, and Forecast 2015 – 2021.”

The market has been segmented as follows:

Global Food Additives Market by Product Type:

• Flavors and Enhancers
• Sweeteners
• Enzymes
• Colorants
• Emulsifiers
• Food Preservatives
• Fat Replacers

Global Food Additives Market by Source:

• Natural
• Artificial

Food Additives Market size and Key Trends in terms of volume and value 2015-2021

Transparency Market Research report states that the global food additives market stood at US$31.4 bn in 2014 and is predicted to reach US$39.8 bn by 2021, expanding at a CAGR of 3.40% from 2015 to 2021. The title of the report is “Food Additives Market - Global Industry Analysis, Size, Share, Growth, Trends, and Forecast 2015 - 2021.”

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Food additives are substances added to various food products for enhancing their appearance and taste or for preserving their flavor. A variety of food additives have been utilized by man, such as vinegar for the preservation of food by pickling, sulfur dioxide for wines, salting as in the case of bacon, etc. Food additives can be of both artificial and natural origin. For the regulation of these additives and in order to keep customers informed, each food additive has been assigned a unique number called as ‘E number’ in European countries. The Food and Drug Administration (FDA) in the U.S. categorizes food additives as ‘generally recognized as safe’ (GRAS).

As per the report, the increasing expansion of the food and beverage industry and the rising preference for natural additives in place of synthetic additives are amongst the prominent factors fuelling the growth of the market for food additives. However, growth opportunities for synthetic additives are still seen within developing nations, thus fuelling the overall market’s growth. In addition, the increasing health concerns have resulted in the rising demand for functional food additives, hence boosting the market’s growth. On the other hand, the strict guidelines and regulations involved with the usage of food additives may restrain the growth of the market in the coming years.

In terms of product type, the market for food additives is segmented into sweeteners, flavors and enhancers, colorants, enzymes, food preservatives, emulsifiers, and fat replacers. Amongst these, the segment of flavors and enhancers led the market in 2014 and is predicted to maintain its superiority throughout the forecast horizon. This segment was trailed by the segment of fat replacers, which is predicted to take the second largest share in the market in the forecast period.

On the basis of source, the report segments the market into artificial food additives and natural food additives. Amongst these, artificial food additives led the market in 2014. On the other hand, the segment of natural food additives is poised to be the most swiftly growing segment in the forecast horizon.

In terms of geography, the report segments the market into Europe, North America, Asia Pacific, and Rest of the World (RoW). Amongst these, Europe led the market in 2014 and held a share of 30.1% in the market. This region was trailed by Asia Pacific, which stood as the second largest market for food additives and held a share of 27.2% in the same year. This region is predicted to surpass Europe and lead the market by 2021.

As stated in the report, the key players dominant in the market are Cargill, BASF SE, Associated British Foods, and Ajinomoto, among others.

The market has been segmented as follows:

Global Food Additives Market by Product Type:

• Flavors and Enhancers
• Sweeteners
• Enzymes
• Colorants
• Emulsifiers
• Food Preservatives
• Fat Replacers

Global Food Additives Market by Source:

• Natural
• Artificial

Food Additives Market: Consumer Preference for Natural Additives Sway the Market

A sweeping range of preservatives, antioxidants, flavour enhancers, colourants, and sweetening agents are being commercially used in packaged foods, functional beverages, bakery goods, dairy products, meat and seafood, snack items, and flavoured and functional water over the years. In addition, food additives such as enzymes, emulsifiers, acidulants, shelf-life stabilisers, and fat replacers are also in high demand.

The global food additives market is rapidly growing and will witness moderate growth over the next decade. During 2016-2026, the market is expected to expand at a CAGR of 5.9% in terms of revenues. Foreseen to record the consumption of around 3,376 thousand tonnes by 2016 end, it will witness a CAGR of 5.2% in terms of shipment. By 2016 end, the market is predicted to exceed a value of US$ 47.0 Bn, which will further ramp up to US$ 83.23 Bn through to 2026.

A few strong factors that are likely to generate more opportunities in the global food additives market include:

Rising Emphasis on Organic Food Products

Growing health concerns among a sizeable global population, coupled with rising awareness about the benefits of consuming organic foods are the most likely to foster the demand for naturally sourced food additives. This in turn propels the adoption of natural food additives, such as organic preservativs and flavouring agents, natural colourants, stevia-based sweeteners, rosemary extracts, and so on. Health conscious consumers nowadays, meticulously check product labels to know the exact composition of packaged foods before purchasing. Organic food labelling is currently a growing trend among manufacturers.

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Flavours and Enhancers Spearhead

Flavours and enhancers are primarily responsible for raising the commercial quality of foods and beverages. In addition to improving the nutritional value of consumables, these additives enhance their structures and aromas as well. Moreover, food and drinks manufacturers are increasingly preferring natural and customised enhancers and flavouring agents over artificial enhancers, spurring introduction of innovative additives in market.

Influential M&A

Increasing mergers and acquisitions will continue to hold a strong positive impact on the additives market growth. Some of the most notable recent M&A activities are acquisition of Cognis by BASF (2010), FMC Corporation’s acquisition of Phytone in 2012, and acquisition of Diana Group by Symrise in 2014. M&A activities are increasingly favouring product offerings of leading companies, enhancing their presence in the global additives market.

Food Additives Market: Analysis and Forecast by Segmentation

On the basis of product type, flavouring agents will remain the most lucrative segment, contributing nearly 11.9% share to the total shipment in 2016. This segment is projected to reach a shipment of around () thousand tonnes by 2026 end. Emulsifiers will represent an important segment with an estimated consumption of over 400 thousand tonnes in 2016. By source, synthetic additives are currently dominating natural additives with over 60% market share. However, natural additives are rapidly gaining traction and may register the consumption of around 1,333.5 thousand tonnes by 2016 end.

Based on application type, the market comprises six key segments - bakery & confectionery, dairy & frozen desserts, snacks & convenience food, beverages, meat & poultry products, and others (including sauces, soups, and baby food). Beverages segment is foreseen to remain dominant in terms of value over the forecast period, expanding at nearly 7.1% of CAGR.

Food Additives Market: Analysis and Forecast by Region

Owing to rising adoption of natural additives in developing countries in Asia Pacific, the food additives market is foreseen to gain a strong foothold in APEJ, especially in Singapore, and Australia. The APEJ market will witness a healthy CAGR through to 2026 and account for over 24% share of the global market revenues. North America, despite representing the largest market in 2016, is likely to witness sluggish growth over the next decade. APEJ will be the fastest growing market, expected to outpace North America’s revenue share by 2026 end. Western Europe is also a major market.

Key Players Analysis

Some of the most prominent market players are E. I. du Pont de Nemours and Company, Cargill, Incorporated, BASF SE, Alpha Ingredients Srl, Ajinomoto Co., Inc., Kerry Group, Archer Daniels Midland Company, Ingredion Incorporated, Hansen Holding A/S, Novozymes A/S, and Tate & Lyle PLC.

Food Additives Market Driven due to Increasing Expansion of Food and Beverage Industry

Food additives are substances added to various food products for enhancing their appearance and taste or for preserving their flavor. A variety of food additives have been utilized by man, such as vinegar for the preservation of food by pickling, sulfur dioxide for wines, salting as in the case of bacon, etc. Food additives can be of both artificial and natural origin. For the regulation of these additives and in order to keep customers informed, each food additive has been assigned a unique number called as ‘E number’ in European countries. The Food and Drug Administration (FDA) in the U.S. categorizes food additives as ‘generally recognized as safe’ (GRAS).

The increasing prevalence of obesity, cancer, cardiovascular disorders, and other health issues have strongly created a demand for functional foods that benefits for the prevention, management, or the treatment of chronic diseases. This has spurred a growth in the demand for functional food additives. Increasing cases of obesity among teenagers have fueled the demand for additives such as hydrocolloids, emulsifiers, vitamins, and minerals. Apart from this, the growing population worldwide has led to a growth in the food and beverage industry, which in turn is driving the demand for food additives.

By product, the flavors and enhancers segment led the market in 2014 and will continue to retain its leading position in the coming years, states a TMR analyst. By source, the artificial segment led the market in 2014 and will continue to do so by the end of 2021. By geography, the global food additives market was led by Europe in 2014. However, Asia Pacific is expected to take over the leading position by 2021.

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According to the report, the global market opportunity in food additives will rise from US$31.43 bn in 2014 to US$39.85 bn by 2021 expanding at a 3.4% CAGR from 2015 to 2021.

On the basis of source, the report segments the market into artificial food additives and natural food additives. Amongst these, artificial food additives led the market in 2014. On the other hand, the segment of natural food additives is poised to be the most swiftly growing segment in the forecast horizon.

In terms of geography, the report segments the market into Europe, North America, Asia Pacific, and Rest of the World (RoW). Amongst these, Europe led the market in 2014 and held a share of 30.1% in the market. This region was trailed by Asia Pacific, which stood as the second largest market for food additives and held a share of 27.2% in the same year. This region is predicted to surpass Europe and lead the market by 2021.

As stated in the report, the key players dominant in the market are Cargill, BASF SE, Associated British Foods, and Ajinomoto, among others.

The market has been segmented as follows:

Global Food Additives Market by Product Type:

• Flavors and Enhancers
• Sweeteners
• Enzymes
• Colorants
• Emulsifiers
• Food Preservatives
• Fat Replacers

Global Food Additives Market by Source:

• Natural
• Artificial

Natural Food Additives to Witness Mammoth Demand from Developed Countries through 2021

Anti-caking agents, humectants, foaming agents, raising agents, flavor enhancer, and bulking agents are some of the food additives that play a major role in the food industry. Among these additives, flavors and enhancers segment hold significant shares and is expected to account for 32.4% of the market by 2021, as per a report published by Transparency Market Research (TMR). The high demand for flavors and enhancers is due to an increased demand for different types of cuisines. According to the report, the global food additives market is expected to rise from US$31.4 bn in 2014 to US$39.8 bn by 2021, expanding at a CAGR of 3.40% from 2015 to 2021. The growing food and beverages industry and the rising health concerns among consumers, are driving the growth of the market.

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TMR analysts shed light on three important questions that companies operating in the food additives market have:

Q. What are the growth strategies commonly implemented by key players operating in the food additives market?

Companies such as Archer Daniels Midland Company and Associated British Foods plc ensure that they are regularly involved in new product development to maximize their market share. While Associated British Foods plc launched a high protein bread in New Zealand in April 2015, Archer Daniels Midland Company launched VivaSweet™ Sucralose in March 2015, which reportedly has zero calorie content and can be used with different food products. Such product launches enable companies to strengthen their market position globally.

Another strategy adopted by players in the market is business expansion through mergers and acquisitions. For instance Cargill, Inc. regularly carries out mergers and acquisitions to strengthen its market presence. The company acquired Leonardo Olive Oil in February 2014, which helped it to consolidate its position in the premium oil segment.

Q. What are the challenges faced by the players in the market?

The food additives market is strictly regulated and monitored by various regulatory bodies. The U.S. Food and Drug Administration (FDA) sets safety standards in order to determine if a substance is safe for its usage and whether it does what it is intended to do. As such, rigorous testing is done to check for compliance. Failing to comply prevents manufacturers from introducing the additive in the market, resulting in huge monetary losses.

Another challenge faced by manufacturers is the difficulty in working with natural additives. Natural additives are extracted from natural sources which are not only expensive than their synthetic counterparts, but also difficult to work with. The demand for natural additives is on the rise, with the growing awareness about the side effects of artificial food additives. As such the high cost and difficulty to work with natural food additives pose a challenge to manufacturers.

Q. What are the growth opportunities in the global food additives market?

While increasing health awareness among consumers has resulted in a growing preference for natural food additives, there are countries such as Malaysia, China, and India, where the use of synthetic additives is still extensively prevalent. As such, these emerging nations in Asia Pacific are expected to be lucrative markets for synthetic additives. The longer shelf life and the absence of any restrictions by governments on the use of synthetic additives, are expected to provide synthetic additive manufacturers an opportunity in the emerging markets.

Synthetic Food Additives Reveal Mammoth Opportunity for Growth in Emerging Countries, Says TMR

The global food additives market is highly fragmented with a wide range of products and an equally large number of market players, working for the food industry. The growth in the food and beverages industry directly impacts the growth of the food additives market. The manufacturers in the food additives market have to consistently modify their products to meet the requirements of customers. Of late, customers are demanding newer flavors, gelatin-free, low fat, and color free products. Thus, companies are focusing on these customer requirements and launching newer products from time to time, Transparency Market Research finds in a new study.

Additive makers in the market comprise small, medium, and large size companies that work with different market and product focus. The major players in the market include Cargill, Danisco, Givaudan, Archer Daniels Midland, BASF, and Sensient Technologies Corporation. These players collectively accounted for a massive 68.5% of the global food additives market in 2011.

Rising Demand for Functional Food to Work in Favor for Food Additives Market

The increasing prevalence of obesity, cancer, cardiovascular disorders, and other health issues have strongly created a demand for functional foods that benefits for the prevention, management, or the treatment of chronic diseases. This has spurred a growth in the demand for functional food additives. Increasing cases of obesity among teenagers have fueled the demand for additives such as hydrocolloids, emulsifiers, vitamins, and minerals. Apart from this, the growing population worldwide has led to a growth in the food and beverage industry, which in turn is driving the demand for food additives.

Strict Monitoring by Regulatory Bodies to Hamper Growth of Food Additives Market

The U.S. Food and Drug Administration (FDA) has set safety standards that needs to be complied with, so that food additives can be used commercially. Rigorous testing is being done to determine the safety of additives. This can hamper the growth of the market. Another challenging factor includes the difficulty in working with natural additives. The demand for natural additives is growing high among the health conscious consumers and suppliers are unable to meet the demands. Natural flavors such as ribonucleotides and monosodium glutamate have several health benefits associated with them. As such, manufacturers are forced to focus on natural sources for developing natural food additives. However, this is proving to be a challenging task owing to the shortage of raw material supply and difficulty in working with natural sources.

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Availability of Synthetic Additives at Cheap Prices to Provide Growth Opportunity to Manufacturers in Emerging Countries

Although the rising health awareness among consumers is driving the demand for natural food additives, the use of synthetic additives is still acceptable in the emerging economies. The rising demand for food and beverages and the availability of synthetic additives at affordable prices is driving their demand. Another factor why synthetic additives are being preferred to their natural counterparts, is the fact that natural additives have low shelf life. Moreover, natural additive products are being perceived as premium products and thus, are extremely expensive as compared to synthetic additives.

By product, the flavors and enhancers segment led the market in 2014 and will continue to retain its leading position in the coming years, states a TMR analyst. By source, the artificial segment led the market in 2014 and will continue to do so by the end of 2021. By geography, the global food additives market was led by Europe in 2014. However, Asia Pacific is expected to take over the leading position by 2021.

According to the report, the global market opportunity in food additives will rise from US$31.43 bn in 2014 to US$39.85 bn by 2021 expanding at a 3.4% CAGR from 2015 to 2021.

This information is based on the findings of a report published by Transparency Market Research titled “Food Additives - Global Industry Analysis, Size, Share, Growth, Trends, and Forecast 2015 - 2021.”

The global food additives market is segmented as follows:

Product

• Flavors and Enhancers
• Sweeteners
• Enzymes
• Colorants
• Emulsifiers
• Food Preservatives
• Fat Replacers

Source

• Natural
• Artificial

Geography/ Country

North America

• U.S
• Canada
• Others

Europe

• Germany
• U.K
• France
• Others

Asia Pacific

• China
• India
• Japan
• Others

RoW

• Middle East
• Latin America
• Africa

Global Food Additives Market to Reach US$39.8 bn by 2021 due to Increasing Expansion of Food and Beverage Industry

Transparency Market Research report states that the global food additives market stood at US$31.4 bn in 2014 and is predicted to reach US$39.8 bn by 2021, expanding at a CAGR of 3.40% from 2015 to 2021. The title of the report is “Food Additives Market - Global Industry Analysis, Size, Share, Growth, Trends, and Forecast 2015 - 2021.”

Food additives are substances added to various food products for enhancing their appearance and taste or for preserving their flavor. A variety of food additives have been utilized by man, such as vinegar for the preservation of food by pickling, sulfur dioxide for wines, salting as in the case of bacon, etc. Food additives can be of both artificial and natural origin. For the regulation of these additives and in order to keep customers informed, each food additive has been assigned a unique number called as ‘E number’ in European countries. The Food and Drug Administration (FDA) in the U.S. categorizes food additives as ‘generally recognized as safe’ (GRAS).

As per the report, the increasing expansion of the food and beverage industry and the rising preference for natural additives in place of synthetic additives are amongst the prominent factors fuelling the growth of the market for food additives. However, growth opportunities for synthetic additives are still seen within developing nations, thus fuelling the overall market’s growth. In addition, the increasing health concerns have resulted in the rising demand for functional food additives, hence boosting the market’s growth. On the other hand, the strict guidelines and regulations involved with the usage of food additives may restrain the growth of the market in the coming years.

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In terms of product type, the market for food additives is segmented into sweeteners, flavors and enhancers, colorants, enzymes, food preservatives, emulsifiers, and fat replacers. Amongst these, the segment of flavors and enhancers led the market in 2014 and is predicted to maintain its superiority throughout the forecast horizon. This segment was trailed by the segment of fat replacers, which is predicted to take the second largest share in the market in the forecast period.

On the basis of source, the report segments the market into artificial food additives and natural food additives. Amongst these, artificial food additives led the market in 2014. On the other hand, the segment of natural food additives is poised to be the most swiftly growing segment in the forecast horizon.

In terms of geography, the report segments the market into Europe, North America, Asia Pacific, and Rest of the World (RoW). Amongst these, Europe led the market in 2014 and held a share of 30.1% in the market. This region was trailed by Asia Pacific, which stood as the second largest market for food additives and held a share of 27.2% in the same year. This region is predicted to surpass Europe and lead the market by 2021.

As stated in the report, the key players dominant in the market are Cargill, BASF SE, Associated British Foods, and Ajinomoto, among others.

The market has been segmented as follows:

Global Food Additives Market by Product Type:

• Flavors and Enhancers
• Sweeteners
• Enzymes
• Colorants
• Emulsifiers
• Food Preservatives
• Fat Replacers

Global Food Additives Market by Source:

• Natural
• Artificial

Global Food Additives Market by Geography/ Country

North America

• U.S.
• Canada
• Others

Europe

• Germany
• UK
• France
• Others

Asia Pacific

• China
• India
• Japan
• Others

RoW

• Middle East
• Latin America
• Africa