Specialty food ingredients are ingredients which gives particular benefit to the end product. The specialty food ingredients market is segmented by type that includes Flavors, Colors, Texturants, Preservatives, Sweeteners, Nutraceuticals, Starches, Cultures, Acidulants and by applications which includes Bakery & Confectionery, Dairy, Beverages, Meat Products.
Deskbound lifestyles along with elevated awareness for low fat and healthy food worldwide are driving the market for new product lines. These product lines benefit from the multi-functionality of these ingredients. The specialty food ingredients market globally benefits from numerous underlying global consumer trends. The consumer trends like ease of use, health and wellness, and clean label influence the overall market. The ease of use trend is due to the rapid urbanization in emergent markets. Consumers today, demand healthier ingredients in their food products. The growing obesity and diabetes incidences compel consumers in emerging and developed economies to focus on an improved lifestyle. Specialty food ingredients market have unique characteristics which help them to offer specific functionalities to food products. The technological development in this field has led to the development of innovative specialty food ingredients which can be used in a wide variety of food and beverage applications.
Overall, the specialty ingredients market indicates a flourishing market for food and beverage suppliers and manufacturers, where product innovation will be a key aspect to increase the market share. Food & beverage enzymes are the fastest growing segment followed by acidulants. Functional food ingredients (nutraceuticals) are the leading specialty ingredient with the largest market share and it is estimated to grow at a significant rate due to high penetration levels in end-use industries.
The North American market is expected to show a steady growth trend, mainly due to the progress in the processed food industry owing mainly to the increase in demand for healthy food. The healthier eating habits provide the much needed impetus to the European specialty food ingredients market. Asia-Pacific is estimated to grow with the fastest CAGR during the period under review. The four most potential countries for the specialty food ingredients market are India, China, Russia, and Brazil which are poised to exhibit the fastest growing trend. The Asia-Pacific region presents tremendous opportunities for specialty food ingredients and its end-use applications. Penetration of packaged food products is gaining momentum due to on-the-go eating behavior, busy lifestyles, etc., which create resultant demand for these ingredients.
The food safety concerns and regulations along with the consumer’s opinion towards E-numbers hinder the growth. The technical expertise in the innovation of these ingredients increases its usage in various applications, but it also increases the cost of the final product. Moreover, the raw material availability, rising costs, and technological barriers limit the growth of various ingredients. The leading specialty food ingredients companies are focusing on their growth through new product developments/launches. Expansions are the second-most preferred strategy by various specialty food ingredients companies. The varied dynamics of the industry promote the usage of this strategy.
Archer Daniels Midland Co. (U.S.) and Tate & Lyle (U.K.) were the major companies that adopted the expansions strategy. These key players are consolidating their presence in the existing markets along with expanding their geographical reach to cater to the emerging markets. The early movers in the industry are likely to benefit in terms of market share; however, it is important that they focus on innovating specialty food ingredients that have wide applicability and are supported by competitively priced production technologies.
Extensive research is required to develop cost-efficient manufacturing equipment for specialty food ingredients; companies are hence aiming to invest in R&D for the same. In addition, manufacturers have ensured extensive communication with consumers in terms of legitimate assertions for health benefits of these products. Such communications, substantiated with scientific publications, are bound to help consumer faith, and in turn gain profits in the market. The key players in the industry are launching new products and increasingly expanding in emerging economies to gain market share.