Specialty Food Ingredients Market Size, Share, Analysis 2031

Report Description

Specialty Food Ingredients Market Outlook 2031

The global specialty food ingredients market size was valued at USD 176.39 Billion in 2022 and is likely to reach USD 321.57 Billion by 2031, expanding at a CAGR of 6.9% during the forecast period, 2023-2031. The growth of the market is attributed to the rising usage of specialty ingredients in various products manufactured in major industries such as food & beverages, personal care, and pharmaceuticals around the world.

Specialty food ingredients are substances that help in improving food quality through different food processing methods. These ingredients are commonly used for coloring, texturing, preserving dried or frozen foods, or blending. Additionally, they are useful in increasing the nutritional value of food products.

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Increasing demand for processed foods, convenience foods, and specialty foods support market growth. Industries such as food & beverages, pharmaceuticals, and personal care are increasingly using specialty food ingredients to enhance the quality of their products. Several manufacturing companies across the food industry regularly experiment with different food additives to boost the flavor or dietary properties of food & beverage products. For instance,

• In March 2023, Archer-Daniels-Midland (ADM), a leading food processing and commodities trading corporation, launched the Knwble Grwn brand which provides plant-based and wholesome food ingredients that are sustainably sourced. This brand complements ADM’s other sustainability initiatives. Farmers are using regenerative agricultural practices to produce Knwble Grwn products.

These products fulfill a variety of taste and flavor requirements of consumers besides offering health benefits. Thus, it is used in manufacturing a wide range of tasteful, delicious, healthy diet foods and beverage products. Moreover, these ingredients are widely used to preserve and maintain food quality for a long time period.

The research report finds that the COVID-19 pandemic affected the global specialty food ingredients market. The lockdown regulations created sudden disruptions in the supply chain. Food manufacturing companies were unable to supply the products due to hurdles in the transport and logistics industry. Thus, the disruptions in the supply chain posed several challenges to the market during the pandemic.

Rising vaccination and ease in lockdown restrictions helped the market to recover significantly and reduced the margin revenue loss caused during the peak of COVID-19. Moreover, the entry of new players in the market during the pandemic helped to fulfill the demand of local consumers, which also created growth opportunities for the ingredient manufacturers.

Artificial Intelligence's Impact on the Specialty Food Ingredients Market

Artificial intelligence has immense importance in the food industry, as it improves food safety compliance, food delivery efficiency, and quality control. AI model offers innovative and value-added solutions in the specialty food ingredients market. It rapidly goes through the ingredients, cross-checks them against guidelines and regulations, and offers in-depth analysis by highlighting potential compliance issues.

It is necessary for the key players to check overall food quality. Thus, market players are consistently experimenting and innovating with the increased usage of specialty food ingredients across several industries. The new and improved methods are enabling providers in the market to offer natural and clean-label products with the assistance of AI.

Specialty Food Ingredients Market Dynamics

Major Drivers

Growing health awareness among a large pool of the global population is expected to boost the market. The demand for food products is expected to increase that cater to diverse dietary needs, health considerations, and preferences. Consumers are giving preferences for food items that have nutritional values.

Specialty food ingredients provide nutritional profiles, textures, and distinctive flavors as per consumer preference. The rising demand for nutritional food items is expected to effectively drive the global specialty food ingredients market during the forecast period.

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Existing Restraints

The use of artificial ingredients drives away consumers from buying those particular food products, which is anticipated to hamper the market growth. According to several scientifically backed evidence, artificial ingredients have adverse effects on an individual’s health, especially children’s health. These ingredients are commonly used as food additives or part of the packaging or manufacturing process (indirect).

Artificial ingredients such as artificial food colors (AFCs) are used to make food or beverages look brighter and more colorful, to make products more appealing to consumers. Several studies have indicated that such ingredients affect badly on child’s health and behavior. In the coming years, the demand for healthy foods is expected to go higher, as consumers are becoming more health conscious when choosing food items.

Emerging Opportunities

Technological advancements and new experimental product launches are expected to create lucrative opportunities for market players. Food manufacturers are increasingly adopting technology solutions to balance the aromatic and functional ingredients in food products and beverages. Several start-ups are entering the market to drive its growth with the help of modern technological innovations.  

Key players are experimenting with new product launches and advanced technological innovations to efficiently meet the growing diverse tasty food and food flavors demand from consumers. Technological solutions are used to produce customized food products with the help of specialty food ingredients to efficiently fulfill the growing culinary demands of consumers.

Scope of Specialty Food Ingredients Market Report

The market report includes an assessment of the market trends, segments, and regional markets. Overview and dynamics have also been included in the report.

Specialty Food Ingredients Market Segment Insights

Application Segment Analysis

Based on application, the global specialty food ingredients market is categorized into dairy products, food & beverages, bakery, convenience foods, confectionary, frozen processed foods, functional foods, meat products, oils & fats, dried processed foods, and others.

The food & beverages segment holds a key market share and is expected to expand at a healthy growth rate during the forecast period. Processed food consumption is rapidly increasing across the world due to changing consumer lifestyles and food choices, which presents a key driving factor for the segment.

Another major reason that is significantly aiding the growth of the segment is the rising consumption of alcoholic, non-alcoholic beverages and juice drinks across the world. The beverage consumption habits among the young population of the world are highly diverse which is expected to support the growth of the segment further in the coming years.

Functional foods segment is expected to grow rapidly during the forecast period, owing to the growing healthy food choices among global consumers. Consumers are growing health conscious and are more cautious about their eating habits due to the health issues globally.

The growing trend of following healthy diet habits has given rise to functional foods’ popularity among consumers. Some functional food products include nutritional supplements or additional dietary ingredients that are intended to improve health.

Examples of functional foods include fortified foods such as minerals, vitamins, fibers, and probiotics. These food substances provide many health benefits, some of which gives effective protection from diseases, countering nutritional deficiency, and helping to strengthen overall health. The rising prominence of functional food is expected to significantly aid the demand for healthier ingredients in food products.

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Type Segment Analysis

On the basis of type, the global market is categorized into specialty starches, colors, enzymes, vitamins & minerals, functional food ingredients, acidulants, preservatives, proteins, specialty oils, emulsifiers, antioxidants, flavors, sweeteners, and others.

The enzymes segment held a major market share in the coming years, as the food manufacturing industry highly demands innovative new ingredients which help in optimizing the production process, and improving quality while also reducing excessive costs.

Enzymes are highly important for stabilizing beverages and enhancing the ripening process of products such as dairy items and meat. Enzymes help in improving the quality of the products, growing the size of bread loaves, tenderizing meat products, and altering fats.

One of the major benefits that enzymes have to offer is eco-friendly products. With food enzymes, processing takes less raw materials, water, and energy use, which helps companies to provide eco-friendly products for consumers.

For large-scale production of flawless food items within a limited time, many food & beverage companies utilize enzymes in the process for quick and accurate chemical reactions. Enzymes’ role is expanding across the global food industry, which is helping the further growth of the segment in the market.

The vitamins and minerals segment are expected to hold a significant share of the market. Vitamins and minerals are helpful for people to fulfill their daily nutritional requirements. Many are turning towards vitamins and minerals to strengthen overall health and the body’s disease-fighting capacities.

The changing consumer lifestyles do not allow many to follow consistent diet habits. Vitamins and minerals prove to be useful to recover from nutritional deficiency. The segment grew rapidly during the COVID-19 pandemic and is anticipated to keep expanding at a high CAGR during the forecast period.

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Distribution Channel Segment Analysis

On the basis of distribution channels, the global specialty food ingredients market is bifurcated into distributors and manufacturers. The manufacturers segment is expected to grow at a higher rate during the forecast period, owing to the rising number of local players venturing into the food and beverage production sector across the world.

The emergence of local manufacturing companies in the food industry is a crucial aspect of the segment expansion. Local manufacturers of specialty food ingredients stepped up their production to provide cost-effective specialty food ingredients to local manufacturing companiesand existing major players, which fueled the segment growth.

Regional Analysis

In terms of regions, the global specialty food ingredients market share is divided into Asia Pacific, North America, Latin America, Europe, and Middle East & Africa. Asia Pacific is expected to account for a major revenue share in the global market in the coming years. The growing consumer preferences for convenience food propelled the demand for emulsifiers in the food & beverage industry.

The popularity of processed foods in emerging economies including China and India is one of the key factors for the high demand for specialty food ingredients across the food processing sector in the region. A large number of the population in the region are currently facing nutritional deficiency issues, which presents another key driver of the regional market.

North America is expected to constitute a key market share during the forecast period owing to the rising number of health-conscious consumers and the rapidly developing trend of cautiously choosing dietary food. Health supplement manufacturers in the region are ramping up the production of nutritional supplements to efficiently meet the increasing demand of the market at affordable prices.

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