Global Food Additives Market Research Report, 2024-29

Food additives are substances added to foods that help improve the texture, color, taste, or chemical preservatives, appearance, or function of processors. These food additives are often added in minimal amounts to enhance the visual appearance, flavor, texture, and other storage properties. Food additives offer several advantages, such as preventing spoilage of food during storage, transport, distribution or processing. More than 3,000 different compounds are used as food additives. A wide range of food additives such as preservatives, antioxidants, flavor enhancers, colorants, and sweeteners are used in the manufacture or preservation of a variety of foods, packaged foods, functional drinks, bakery products, dairy products, meat, and seafood. The multi-functionality of food additives has been driving their desirability among food companies and increasing the market's growth. Additionally, the consumption of sustained quality food and beverages with improved visual and taste appeal increases, and demand for food additives is assumed to boost the market. Several organizations, such as the Food Administrative Organization, the United States Department of Agriculture, and the Joint FAO/WHO Expert Committee on Food Additives, are introducing a general standard for food additives (GSFA) to increase trade among countries. Furthermore, the rapid expansion of technology in the industry to meet the consumers' demand for healthy food options is projected to impact market growth positively. For instance, companies operating in the food additives market have been focusing on adopting micro-encapsulation techniques for color delivery in the final product formulations. Clean labeling has become a high-rated consumer demand in food products. The global food industry responds to it by placing additional emphasis while processing a food product. Food additive manufacturers have also adapted the production of clean-label additives that can be used while developing clean-label products. These clean-label additives have applications in food products, including egg replacements in low- and high-fat vegan dressings, white cooking sauces, ready meals, and other applications. Thus, food and beverage manufacturers are also increasingly reformulating their products to meet the changing consumer demand for natural ingredients. For instance, in January 2021, Corbion NV, a global manufacturer of lactic acid, announced a significant investment to increase its capacity for producing lactic acid in North America (around 40%) to meet the growing demand for natural ingredients in multiple industries. According to the research report, “Global Food Additives Market Research Report, 2024-29” published by Actual Market Research, the market is anticipated to cross USD 240 Billion by 2029, increasing from USD 176.52 Billion in 2023. The market is expected to grow with 5.52% CAGR by 2024-29. The food additive market is expected to grow during the forecast period as there has been a great demand for enhanced picture, appearance and the taste of food and beverages. Rapid growth of the food and beverages industry will drive the market during the forecast period. In the developed as well as the developing nations the demand for packaged food items and packaged beverages is expected to drive the market growth as that has been an increase in the consumption of the same. There shall be an increase in the demand for the additives which are used in processing different types of food as it helps in enhancing the nutritional content of the food and also improves the quality of the food products. There is a growth in the preference for the diet which is plant based as there is a growth in the awareness in the consumers. There is also a great demand for products that have a clean label in the food and beverages industry. Products with the clean label are in great demand in the United States and it is expected to grow during the forecast period. Major manufacturing companies in the food industry are continuously improving their techniques to provide food and beverages that are less in fat and sugar content which will be helpful in lowering the content of the calories in their food products and the beverages which shall drive the market growth during the forecast period. The presence of the regulatory authorities with stringent policies will also affect the market to a great extent. Manufacturers seek approval from the regulatory bodies to replace the sweeteners that are less in terms of calorie and fat and this is expected to provide a great opportunity for the growth of the market in the coming years. Constant research and development activities conducted by the manufacturers are helpful in coming up with technologies that have enhanced the production processes and provided better quality products. The ingredients used in the manufacturing of the food and beverages have also improved. Market Drivers

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• Globalization of Food Supply Chains: The globalization of food supply chains has increased the need for food additives to ensure the stability and quality of products during transportation and storage. Food products are now distributed across diverse geographical regions, and additives play a crucial role in maintaining consistency and preserving freshness. The expansion of global food trade and supply chains is driving the demand for food additives, particularly those that enhance the shelf life and stability of products. • Rising Health Consciousness and Dietary Trends: Growing health consciousness among consumers has led to an increased demand for healthier food options. Food additives are being utilized to create products with reduced sugar, salt, and fat content, addressing dietary concerns and aligning with health-focused trends. The focus on health-conscious choices is driving the development of food additives that contribute to the production of nutritionally balanced and better-for-you products. Market Challenges

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• Evolving Consumer Preferences and Sensitivities: Consumer preferences and sensitivities are continually evolving, influenced by factors such as cultural shifts, lifestyle changes, and health trends. Meeting diverse and changing consumer demands can be challenging for food additive manufacturers who must navigate a dynamic market landscape. Adapting to rapidly changing consumer preferences requires agility and innovation within the food additives industry. Manufacturers need to stay attuned to market trends and respond quickly to shifting consumer sentiments. • Environmental and Sustainability Concerns: Growing awareness of environmental issues and sustainability has led to increased scrutiny of the environmental impact of food production. Some food additives, especially synthetic ones, raise concerns related to their production processes, waste generation, and long-term effects on ecosystems. The industry is facing pressure to develop sustainable alternatives and adopt eco-friendly practices to address environmental concerns. This includes exploring natural additives, optimizing production processes, and reducing overall environmental footprints. Market Trends

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• Plant-Based and Clean-Label Alternatives: The trend towards plant-based diets and clean-label products has influenced the development of food additives derived from plant sources. Consumers are increasingly seeking products with recognizable, minimally processed ingredients, leading to a rise in the use of plant-based additives. The adoption of plant-based and clean-label alternatives is reshaping the food additives landscape. Manufacturers are innovating to provide solutions that align with the preferences of consumers seeking more natural and sustainable options. • Smart Formulations and Advanced Technologies: The integration of smart formulations and advanced technologies in food additives is an emerging trend. This includes the use of encapsulation techniques, nanotechnology, and artificial intelligence to improve the delivery and performance of additives in food products. Smart formulations enhance the functionality and efficiency of food additives, allowing for precise control over factors such as flavor release, nutrient delivery, and stability. This trend contributes to the development of high-performance additives with enhanced capabilities. Covid-19 Impacts The COVID-19 pandemic has significantly impacted the global food additives market, bringing about a range of challenges and opportunities. The lockdowns, travel restrictions, and disruptions in the supply chain initially led to uncertainties and logistical challenges for food additive manufacturers. With shifts in consumer behavior and a heightened focus on health and wellness, the demand for certain food products saw fluctuations. Additionally, the closure of restaurants and a surge in home cooking influenced the types of additives in demand, with preferences leaning towards those that enhance the quality and shelf life of home-cooked meals. On the regulatory front, there has been increased scrutiny on supply chain resilience and safety standards. Despite the challenges, the pandemic has also prompted innovation, with companies exploring new formulations to meet changing consumer preferences. As the world emerges from the crisis, the food additives market is expected to rebound, with continued emphasis on health-conscious products, sustainability, and technological advancements in food processing. The lasting impact of COVID-19 underscores the need for adaptability and resilience within the food additives industry. The increasing awareness of gut health and the growing trend towards functional foods have propelled probiotics to significant growth in the food additives market. Probiotics, defined as live microorganisms that confer health benefits when consumed in adequate amounts, have witnessed substantial growth in the food additives market due to a paradigm shift in consumer perceptions toward holistic well-being. The heightened awareness of the importance of gut health and its impact on overall health has driven consumers to seek foods that offer functional benefits beyond basic nutrition. Probiotics, commonly found in fermented foods and supplemented products, align perfectly with this health-conscious trend. The digestive health benefits associated with probiotics, including improved gut microbiota balance and enhanced immune function, have resonated with consumers seeking proactive approaches to wellness. In response to this demand, the food industry has embraced the incorporation of probiotics into a diverse range of products, including dairy, beverages, snacks, and supplements. Yogurts, kefir, and fermented beverages have become popular carriers for probiotics, capitalizing on both taste and health appeal. Moreover, advancements in probiotic strains and delivery technologies have expanded their application to an array of food and beverage formulations, ensuring the viability of these beneficial microorganisms throughout the product's shelf life. The growth of probiotics in the food additives market is not only a result of their perceived health benefits but also a testament to the industry's recognition of the symbiotic relationship between digestive health and overall well-being. As consumers increasingly prioritize proactive health management, the incorporation of probiotics into various food products is expected to continue its upward trajectory, driving innovation and shaping the landscape of functional foods within the broader food additives market. The increasing consumer preference for clean label and healthier food options has fueled the growth of natural food additives in the food additives market. The surge in the demand for natural food additives is intricately linked to a broader shift in consumer preferences towards clean label products and a more health-conscious lifestyle. Modern consumers are increasingly scrutinizing product labels, seeking transparency, and preferring foods with easily recognizable, minimally processed ingredients. Natural food additives, derived from sources like fruits, vegetables, and herbs, resonate with these preferences as they offer a more straightforward and perceived "wholesome" alternative to synthetic additives. Consumers are drawn to the idea of incorporating ingredients with familiar origins into their diets, driven by the belief that natural additives are inherently safer and healthier. Manufacturers are responding to this demand by reformulating their products, replacing artificial additives with natural counterparts, and emphasizing the use of recognizable ingredients in their marketing strategies. The clean label movement, advocating for simplicity, transparency, and authenticity in food products, has further amplified the appeal of natural additives. Products featuring natural colors, flavors, and preservatives are gaining traction, and the food industry is witnessing a surge in innovation to meet these evolving consumer preferences. Natural food additives not only align with the growing awareness of health and wellness but also cater to concerns related to environmental sustainability. The emphasis on natural and eco-friendly ingredients reflects a holistic approach to food consumption that considers both personal well-being and the broader impact on the planet. The increasing consumer demand for diverse and globally inspired flavors, coupled with the popularity of ready-to-eat and convenience foods, has propelled the growth of food additives in the Spices, Condiments, Sauces & Dressings applications. The dynamic growth of food additives in the Spices, Condiments, Sauces & Dressings applications is intricately linked to evolving consumer preferences for a wide range of flavors, convenience, and culinary diversity. In today's fast-paced world, consumers are seeking convenient, ready-to-use flavor enhancements to elevate their meals quickly. Spices, condiments, sauces, and dressings play a pivotal role in delivering diverse and globally inspired taste experiences, creating a demand for additives that enhance their quality, stability, and sensory attributes. Food additives contribute significantly to the improvement of these products by enhancing flavor profiles, extending shelf life, and maintaining consistency in texture and appearance. Emulsifiers and stabilizers aid in preventing separation in dressings and sauces, ensuring a smooth and appealing texture. Preservatives help prolong the freshness of these products, allowing for longer shelf life without compromising taste. Additionally, natural and artificial flavors, colorants, and other additives contribute to creating a diverse palette of sensory experiences that cater to the multicultural tastes of consumers. As the demand for international cuisines and diverse flavor experiences continues to rise, the Spices, Condiments, Sauces & Dressings segment becomes a key driver for the food additives market. Manufacturers are responding to this trend by incorporating innovative additives that not only enhance the sensory attributes of these products but also align with clean label and natural trends. The convenience associated with these products, combined with the versatility of food additives, positions this segment at the forefront of market growth, reflecting the industry's commitment to meeting the evolving culinary preferences of consumers globally. The rising demand for processed and convenience foods, coupled with a growing population and increasing urbanization in South America, is fueling the growth of the food additives market in the region. South America is experiencing a notable expansion in the food additives market, and this growth is primarily driven by shifts in dietary patterns and lifestyle changes across the region. As urbanization accelerates and more people adopt fast-paced lifestyles, the demand for processed and convenience foods has seen a significant upswing. Consumers in South America are increasingly turning to ready-to-eat meals, snacks, and processed food items that offer convenience and save time. In response to this trend, food manufacturers are incorporating a variety of additives to improve the quality, taste, and shelf life of their products. The region's expanding population is another crucial factor contributing to the growth of the food additives market. With a larger consumer base, there is a heightened demand for a diverse range of food products, necessitating the use of additives to meet quality standards and ensure product stability. Additionally, the globalization of food supply chains has introduced consumers in South America to a broader array of food options, further driving the need for additives to maintain consistency and quality across various products. Furthermore, as economic conditions improve, consumers are becoming more open to exploring a variety of flavors and culinary experiences. This has led to an increased demand for innovative food products, such as those incorporating unique spices, sauces, and condiments, prompting the use of specialized additives to enhance these flavors. Market players including Cargill, Incorporated; Ingredion; ADM; DuPont; and Tate & Lyle PLC are continuously involved in research and development to develop well-differentiated products and gain a competitive advantage. For instance, in June 2021, Kerry opened a new taste facility in Irapuato, Mexico. This is expected to strengthen the company’s position in the Mexican market and support the local customer base with advanced solutions of flavors and enhancers. Players are adopting strategies such as mergers & acquisitions and capacity expansions for their business growth. For instance, in December 2020, Tate & Lyle acquired Sweet Green Fields, a stevia solutions business having its production and research & development facilities located in China. This move is expected to strengthen the company’s position in the clean-label sweetener market in China and the Asia Pacific region. • In November 2023, Chr. Hansen introduces NEER Poly and NEER Punch strains, expanding SmartBev NEER technology for non-alcoholic brewing. Enhancing flavor diversity, reducing costs, and accelerating production, this innovation aligns with market trends, positioning Chr. Hansen as a leader in providing top-notch solutions for the food additives market. • In October 2023, Cargill is poised for double-digit growth in 2023, focusing on South India expansion, investing USD 35 million in a Nellore manufacturing facility. Cargill emphasizes quality and supply chain resilience to navigate inflationary pressures and drive long-term sustainable growth in India's evolving food market. • In June 2023, CP Kelco partnered with Shiru, Inc., a food startup, to advance sustainable food with precision fermentation. Leveraging nearly 90 years of expertise, CP Kelco collaborates with global food leaders to create innovative products meeting texture and consumer preferences, including clean labels. This reinforces their commitment to sustainable ingredient innovation in the food additives market. • In January 2023, BASF SE and Cargill, Incorporated announced that they are strengthening their collaboration to provide advanced enzyme solutions to animal protein producers across the U.S. This enhanced partnership aims to deliver high-performance enzymes that meet the evolving needs of the industry. • In June 2023, ADM opened a new center for customer creation & innovation in the UK to strengthen its food innovation capabilities. ADM is developing new savory culinary innovations with the help of a modern kitchen, a chef's presentation theatre, and a flavor creation lab. ADM is also continuing to support the beverage, sweet products, and dairy industries. Considered in this report • Historic year: 2018 • Base year: 2023 • Estimated year: 2024 • Forecast year: 2029 Aspects covered in this report • Food additives market Outlook with its value and forecast along with its segments • Various drivers and challenges • On-going trends and developments • Top profiled companies • Strategic recommendation By Product types • Sweeteners • Probiotics • Flavours & Enhancers • Dietary Fibbers • Hydrocolloids • Food Colorants • Emulsifiers • Prebiotics • Shelf- life Stabilizers • Fat Replacers • Preservatives • Enzymes • Others(Anti-caking Agent) By Source type • Natural • Synthetic By Application • Bakery & Confectionery • Dairy & Frozen Desserts • Beverages • Convenience Foods • Spices, Condiments, Sauces & Dressings • Others The approach of the report: This report consists of a combined approach of primary and secondary research. Initially, secondary research was used to get an understanding of the market and list the companies that are present in it. The secondary research consists of third-party sources such as press releases, annual reports of companies, and government-generated reports and databases. After gathering the data from secondary sources, primary research was conducted by conducting telephone interviews with the leading players about how the market is functioning and then conducting trade calls with dealers and distributors of the market. Post this; we have started making primary calls to consumers by equally segmenting them in regional aspects, tier aspects, age group, and gender. Once we have primary data with us, we can start verifying the details obtained from secondary sources. Intended audience This report can be useful to industry consultants, manufacturers, suppliers, associations, and organizations related to the Food additives industry, government bodies, and other stakeholders to align their market-centric strategies. In addition to marketing and presentations, it will also increase competitive knowledge about the industry.