The specialty food ingredients market is estimated at USD 179.8 billion in 2023; it is projected to grow at a CAGR of 6.0% to reach USD 240.9 billion by 2028. Due to population expansion, specialty food ingredients are experiencing huge demand across the world. Some of the key factors boosting demand for specialty food ingredients are the introduction of new products, increasing consumer preference, and the acceptance of new trends across the globe.
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Specialty Food Ingredients Market Growth
The specialty food ingredients market has experienced significant growth in recent years, driven by various factors such as changing consumer preferences, increasing health consciousness, and demand for innovative food products.
One of the key drivers of growth in this market is the rising awareness among consumers about the importance of healthy and natural ingredients in their diets. As people become more health-conscious, they are seeking out products that are free from artificial additives, preservatives, and other undesirable ingredients. Specialty food ingredients, such as natural sweeteners, plant-based proteins, and organic flavor enhancers, are thus witnessing increased demand.
Additionally, there is a growing trend towards ethnic and exotic flavors, as well as novel textures and experiences in food products. Specialty food ingredients play a crucial role in meeting this demand by providing unique and authentic flavor profiles, as well as enhancing the sensory appeal of food products.
The functional food ingredients segment is expected to grow at the highest CAGR during the forecast period.
There is an increasing demand for food products that provide functional benefits beyond basic nutrition as people become more health conscious. Functional food components with the potential to improve health include probiotics, prebiotics, antioxidants, and omega-3 fatty acids. They promote cognitive performance, support cardiovascular health, improve digestion, and boost immunity. The market for functional food components is being driven by rising knowledge of these advantages and a desire for preventive healthcare.
Food flavors emerge as a driving force in the specialty food ingredients market overview
The industry of food is quite competitive, and producers are always looking for ways to distinguish the products they produce. Food flavors are a useful tool for product innovation and distinction. Manufacturers can create fresh and appealing food and beverage products that evoke interest in customers by combining distinctive and trendy flavors. Additionally, flavors can be mixed to create unique or customized taste profiles, giving firms the opportunity to stand out from the competition and earn over customers. Food flavors prominence in the market is largely due to their capacity to improve product appeal and distinction.
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US is expected to account for the largest market share
The US has a significant, wealthy consumer base with significant purchasing power. American consumers are renowned for their openness to trying out novel goods and experimenting with emerging culinary trends. The need for specialty food ingredients is driven by consumers values for convenience, quality, and diversity in their food options. The demand for a wide variety of specialty ingredients, such as flavors, functional ingredients, and natural additives, is further fueled by the different culinary preferences and multicultural populations. The US market is a leader in specialty food ingredients due to the strong customer demand and considerable purchasing power. According to the USDA Food Processing report of April 2023, in the U.S. market, food processing ingredients hold a significant share of 60 percent. Within this sector, specialty food ingredients play a crucial role in shaping the diverse and innovative landscape of the food industry. As consumers increasingly prefer innovative products, the demand for specialty food ingredients continues to grow, further driving the development and expansion of this dynamic sector.
Major players operating in the specialty food ingredients industry are ADM (US), DSM (Netherlands), International Flavors & Fragrances Inc. IFF (US), Kerry Group plc. (Ireland), Givaudan (Switzerland), Cargill, Incorporated (US), Sensient Technologies Corporation (US), Ingredion. (US), Chr. Hansen Holding A/S (Denmark), and Tate & Lyle (UK).