Lecithin is a multifunctional ingredient derived from natural sources such as soy, sunflower, rapeseed, and egg. Among these, soy is the most common source used for lecithin extraction. It is used as an emulsifier and finds application in the food, feed, industrial, and healthcare sectors. Phospholipids are active components of lecithin derived majorly from soy and egg. They are widely used in nutritional supplement, pharmaceutical, and cosmetic applications.
According to the International Service for the Acquisition of Agri-biotech Applications (ISAAA), in 2016, soybean was the largest genetically modified crop at a global level. The use of GM soy for lecithin is one of the major concerns in the European region impacting the market. Countries such as the US and Brazil were the leading producers of GM soybean. European countries majorly rely on the import of lecithin from these leading producers as well as Asian countries. However, the growing demand for non-GMO lecithin among consumers in Europe is expected to create opportunities for various oil processors and lecithin manufacturers.
Soy allergy issues coupled with concerns regarding GMO crops compel players to develop substitutes. Thus, the development of alternate sources such as sunflower and rapeseed that provide similar benefits as soy is expected to drive the growth of the lecithin market during the forecast period. The supply of sunflower lecithin is not sufficient to fulfil the required demand. Countries such as Ukraine, Russia, and Argentina are expected to present opportunities during the forecast period for domestic manufacturers, as these countries are leading producers of sunflower oil. On the other hand, the phospholipids market is gaining momentum due to the growing trend towards consumption of natural ingredients in cosmetics & dietary supplements around the globe.
According to a recent study by MarketsandMarkets, the global lecithin market is projected to grow at a CAGR of 6.7% from 2018, to reach USD 1.59 billion by 2023 from USD 1.15 billion in 2018. On the other hand, the global phospholipids market was valued at USD 3.23 billion in 2018 and is projected to reach USD 4.36 billion by 2023, at a CAGR of 6.2% during the forecast period.
What’s driving the growth of lecithin & phospholipids?
Some of the key drivers that are accelerating the demand for lecithin & phospholipids in various industries are highlighted below.
- Feed industry: The growing usage of lecithin as an ingredient and additive in the feed industry for poultry, swine, companion animals, shrimp, and fish is driving the growth of the lecithin market around the globe. In 2016, the European Food Safety Authority (EFSA) approved the use of lecithin in feed for all animal species. This created opportunities for manufacturers from different regions to penetrate the feed market of this region, as it relies on import from countries such as Brazil, Argentina, and the US for animal feed.
- Naturally sourced ingredients:
Ingredient labeling has resulted in manufacturers becoming increasingly cautious about the ingredients used in their products. Frequent consumption of artificial ingredients is linked to health problems such as cancer, deadly allergic reactions among sensitive individuals, and foodborne illnesses. Hence, the growing demand for natural ingredients among consumers for food, pharmaceutical, and cosmetic applications due to health concerns is fueling the demand for both lecithin & phospholipids. For instance, Cargill (US) launched non-GMO rapeseed lecithin for the European market, where the demand for label-friendly ingredients is on the rise.
- Multifunctionality in various end-use industries:
Lecithin is a versatile, natural, and multifunctional ingredient majorly for food formulators. Lecithin has various functions; it can be used as an emulsifier, release agent, and instantizing agent. It is the most popular emulsifier used in the bakery products, confectionery products, and convenience food. On the other hand, the increasing demand for nutraceuticals along with oral, dermal, and parenteral products has led to growth in the phospholipids market. In the cosmetics industry, the usage of phospholipids as a multipurpose ingredient functioning such as an emulsifier, liposome former, solubilizer, and wetting agent is expected to drive the growth of phospholipids in the future.
What’s impacting the lecithin & phospholipids industry?
- GM foods are being increasingly used to ensure an adequate supply of food with better yield and lower production costs. Soy is the dominating source of lecithin extraction from GM soy crop. However, concerns are being raised with respect to food safety, toxicity, and allergenicity of GM foods.
- GMO concerns have gained public attention, with consumers avoiding GM food products in many developed and developing countries. In 2015, a majority of countries in the European Union stopped the cultivation of GMO crops, which led to a slowdown in GM lecithin sales and resulted in an increased demand for non-GMO lecithin in the region.
- Apart from this, growing health concerns among consumers have also boosted the demand for non-GMO lecithin in the region. This has created a shortage of non-GMO lecithin as the major soy producing countries—Brazil, the US, China, and India—are primarily engaged in offering GM soy.
Leading companies in the lecithin & phospholipids industry:
The major players in the lecithin & phospholipids market are as follows:
- Cargill (US)
- ADM (US)
- Stern-Wywiol Gruppe (Germany)
- DowDuPont (US)
- Bunge (US)
- Lipoid (Germany)
- Wilmar International (Singapore)
- Sonic Biochem Extractions (India)
- Avanti Lipids Polar (US)
- VAV Life Sciences (India)