Growth of the global processed food industry is creating opportunities for food colors

The food colors market is estimated at USD 3.88 billion in 2018 and is projected to reach USD 5.12 billion by 2023, at a CAGR of 5.7% during the forecast period. This market is driven by factors such as the increased demand for natural food colors over synthetic food colors due to growing consumer awareness for clean label products, health hazards associated with synthetic colors, and the health benefits imparted by some natural food colors.

Companies are adopting new technologies to develop newer varieties of natural colors that are more stable and can withstand variations in temperature and moisture. For instance, Sensient Technologies (US) developed an advanced Emulsion Technology for natural colors. Similarly, WILD Flavors & Specialty Ingredients (US) developed heat-stable colors that are used in extruded confectionery products.

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On the basis of application, the processed food segment is projected to grow at the highest CAGR from 2018 to 2023. The processed food industry is rapidly growing as a result of high demand for convenience foods with improved lifestyles. Processing of food involves thermal and non-thermal processes. These processes alter the characteristics of the original color of food products due to various process parameters such as temperature, moisture, and pH. Owing to this, the demand for food colors in processed food products is increasing to impart natural aesthetics to the products.  

Based on type, the market for anthocyanins under natural colors is projected to grow at the highest CAGR during the forecast period. Anthocyanins can be extracted from various plants such as blackcurrants, grape skin, elderberries, radish, red cabbage, and black or purple carrot. They are water-soluble pigments that render red to blue colors and are stable at pH less than 4.0.

On the basis of form, the liquid segment is projected to grow at the highest CAGR during the study period. Food colors in liquid form are largely opted by food manufacturers owing to their convenience in usage and lower cost.

On the basis of solubility of food colors, dyes are projected to grow at the highest CAGR during the forecast period. Dyes find applications in various beverages, dry mixes, baked goods, confections, dairy products, and a variety of other products.

The Asia Pacific region is projected to be the fastest-growing market for food colors from 2018 to 2023. Key markets in the Asia Pacific region include China, India, Japan, and Australia & New Zealand. The demand for food colors is increasing in the emerging economies of Asia due to the growth of the processed food industry. Localizing operations can help in reducing costs and improving access to local distribution networks, thereby optimizing profit margins.

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Market Drivers

Increasing demand for natural colors

The demand for natural food colors over synthetic food colors is increasing due to growing consumer awareness for clean label products, health hazards associated with synthetic colors, and the health benefits achieved by using natural food colors. Synthetic colors can cause allergic disorders among consumers. The use of chemicals with heavy metals such as lead or arsenic to manufacture synthetic food colors can cause life-threatening diseases. Natural food colors are gaining market attention due to their natural origin appealing to consumers who view them as a “safe to use” product. Natural colors reduce the risk of allergies and intolerance among consumers. Such factors are increasing demand for natural colors in food & beverage applications.

Increasing consumer awareness for clean-label products

The demand for food with a natural and clean label is increasing across the world, owing to increasing health awareness, increasing spending power of consumers, and increasing food adulteration instances. Food safety concerns caused by the chemical contamination of food and ill-effects of synthetic additives have resulted in an increasing number of consumers demanding clean label products. This rising demand has led to the launch of several new products bearing claims such as “natural.” As a result, food manufacturers are investing in clean labels, thereby leading to the introduction of new products or revision of existing product portfolios by incorporating clean label food colors.