Specialty Food Ingredients Market Size, Share, Trends, Growth and Forecast 2028

Industry Prospective:

The Specialty Food Ingredients Market was worth around USD 136.1 billion in 2021 and is estimated to grow to about USD 187.7 billion by 2028, with a compound annual growth rate (CAGR) of approximately 5.5% over the forecast period. The report analyzes the Specialty Food Ingredients drivers, restraints/challenges, and the effect they have on the demands during the projection period. In addition, the report explores emerging opportunities in the Specialty Food Ingredients.

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Specialty Food Ingredients Market: Overview

The food and beverage industry uses specialty food additives to improve the taste and flavor of processed foods. Specialty food additives maintain texture, emulsify, offer processing advantages, add an extra health dimension, and improve the color of the finished product. The market is strongly driven by shifting consumer tastes, greater health awareness, a growing millennial population, and growth in supplemental income among consumers. The need for specialty food components is being driven by changing lifestyles and a high prevalence of chronic illnesses. Additionally, the growing prevalence of diabetes and obesity in both developed and developing nations causes consumers to place a greater emphasis on leading better lives, resulting in increased demand for health and wellness food components from food and beverage manufacturers. To some extent, this is also propelling the global specialty food ingredients market. 

The specialty food ingredient sector is predicated to raise on the larger technological and functional benefits that these additives provide in terms of high quality, safety, affordability, nutrition, and taste of processed foods. Moreover, the need for specific sorts of food items has become an integral part of some customers' identities, particularly in developed nations, fuelling demand for specialized food components. Furthermore, the use of meal replacement supplements such as shakes and smoothies is fuelling the expansion of the Specialty Food Ingredients Market.

Covid-19 Impact

The Specialty Food Ingredients Market, like all other market categories, was severely impacted by the COVID-19 pandemic. The COVID-19 pandemic wreaked havoc on the manufacturing industry, as well as the global market. The immediate impact of the COVID-19 epidemic was a slowdown, which resulted in industry losses. Due to the epidemic, however, the Global Market gained an edge as individuals opted for more packed and ready-to-eat meals. Even after the pandemic's waves have subsided, people who like to dine on the go still have a demand for ready-to-eat meals and fortified foods. The Specialty Food Ingredients Industry supports a variety of sectors.

The expansion of the Specialty Food Ingredients Market will accelerate as the Global Market recovers from the impact of the COVID-19 pandemic. Furthermore, there is a greater need than ever for high-quality, healthful ingredients in foods. As a result, in the post-pandemic era, there is big potential. In addition, the pandemic created possibilities for many private firms to enter the market in order to meet the inflated demand for food items, which benefited the ingredient manufacturer.

Specialty Food Ingredients Market: Key Drivers

Demand for fortified foods is increasing as people become more health-conscious

The global demand for fortified foods is rapidly increasing. Vitamins, minerals, antioxidants, hydrocolloids, prebiotics, amino acids, plant extracts, and carotenoids are some of the most important functional food constituents. In emerging markets, the population of health-conscious people is quickly growing, fuelling the demand for food fortification. The apparent disparities in population health among countries are largely due to variances in dietary consumption across areas. The increased demand for fortified meals is likely to propel specialized food ingredient sales even higher.

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Specialty Food Ingredients Market: Restraint

Raw material costs are high, and raw materials are scarce

One of the primary restraints in the specialized food ingredients market is price. Due to the components used in functional meals and premium products, they are somewhat expensive, which is expected to limit their expansion in price-sensitive economies like India, China, and South Africa. Due to their superior quality, specialty food ingredients are rather pricey.

Specialty Food Ingredients Market: Opportunities

The number of end-user applications is increasing

The growing variety of end-use applications is expected to fuel expansion in the specialty food ingredients market, thanks to the multifunctional properties of diverse components. Bakery & confectionery, convenience foods, dairy & frozen desserts, and meat products all use food processing chemicals like emulsifiers. Flavors and colors are frequently employed in bakery and beverage products.

Specialty Food Ingredients Market: Challenges

There is a lack of consistency in the regulations governing various substances

The food ingredient sector is required by law to follow the rules and regulations of numerous regulatory bodies. Food safety and quality regulations are regulated by international bodies such as Argentina's National Food Safety and Quality Service (SENASA), Canada's Canadian Food Inspection Agency (CFIA), the United States Food and Drug Administration (FDA), the World Health Organization (WHO), and the European Union's Committee on the Environment, Public Health, and Food Safety (EU). The use of synthetic substances has been restricted throughout a substantial portion of end-user applications due to stringent rules implemented by federal organizations in several nations.

Specialty Food Ingredients Market: Segmentation

The Specialty Food Ingredients Market is segregated based on Product Type, Source, Application, and Distribution Channel.

By Product Type, the market is classified into Specialty Sensory Ingredients (Enzymes, Emulsifiers, Flavors, Colorants, and Others), and Specialty Functional Ingredients (Vitamins, Minerals, Antioxidants, Preservatives, and Others). Enzymes will have the largest market share in the sector on a global scale. Enzymes are proteins that speed up our bodies' metabolism or chemical processes. By global market share, the use of emulsifiers and colorants will be the second-largest sector. Flavors, on the other hand, will increase at the fastest growth throughout the Market projection period.

Based on application, the specialty food ingredients market is divided into beverages, bakery and confectionery, dairy products, processed foods, meat products, savory and sweet snacks, and others. The bakery & confectionery segment was the most promising segment with the largest market share in 2021. The increasing consumption of chocolates, candies, and cakes and the rising demand for local and home-baked bakery products are expected to boost the specialty food ingredients market over the forecast period.

Based on the Distribution Channel, the global market is distinguished into Distributors and Manufacturers. Bakeries and confectioneries will continue to be the most common use of specialty food ingredients in the worldwide market, followed by convenience foods. The growth is attributable to the growing hectic lifestyle and the increased preference for fast food mainly by the young population.

Specialty Food Ingredients Market: Report Scope

Specialty Food Ingredients Market: Recent Developments

• In 2021, the merger of International Flavors & Fragrances and DuPont's Nutrition & Biosciences Business has been completed. The company intends to have leadership positions in high-value ingredients and solutions for the Food & Beverage, Home & Personal Care, and Health & Wellness markets as a result of the transaction and the combined portfolio.
• In 2020, Cargill Inc. introduced CTruSweet 01795, a specialized and label-friendly sweetener with a 30 percent sugar and calorie reduction in beverages and other food applications for the European market.

Specialty Food Ingredients Market: Regional Landscape

North America is expected to dominate the market throughout the projection period because of rising processed food consumption in the United States and Canada. Due to increased rates of obesity and other ailments, consumers in this region are health-conscious. This raises the need for specialty food ingredients such as vitamins, minerals, proteins, and dietary supplement substances, which can help avoid a variety of health problems.

In the near future, the Asia Pacific region is predicted to grow the most. The worldwide specialty food ingredients market is likely to be boosted further by emerging markets such as China, and India. In the near future, the Asia Pacific region is predicted to grow the most. Due to the obvious increased awareness of food quality, specialty foods are exceeding their non-specialty counterparts in practically every category.

Specialty Food Ingredients Market: Competitive Landscape

Some of the main competitors dominating the Specialty Food Ingredients Market include -

• Archer Daniels Midland Company
• Associated British Foods Plc
• Cargill Incorporated
• Chr. Hansen Holding A/S
• DuPont de Nemours Inc.
• Givaudan
• Ingredion Incorporated
• Kerry Group plc
• Koninklijke DSM N.V.
• Sensient Technologies Corporation
• Tate & Lyle plc.

Specialty Food Ingredients Market is segmented as follows:

By Product Type

• Specialty Sensory Ingredients
  • Enzymes
  • Emulsifiers
  • Flavors
  • Colorants
  • Others
• Specialty Functional Ingredients
  • Vitamins
  • Minerals
  • Antioxidants
  • Preservatives
  • Others

By Source

• Natural
• Synthetic

By Application

• Beverages
• Bakery and Confectionery
• Dairy Products
• Processed Foods
• Meat Products
• Savory and Sweet Snacks
• Others

By Distribution Channel

• Distributors
• Manufacturers

By Region

• North America
  • The U.S.
  • Canada
• Europe
  • France 
  • The UK
  • Spain
  • Germany
  • Italy
  • Rest of Europe
• Asia Pacific
  • China
  • Japan
  • India
  • South Korea
  • Southeast Asia
  • Rest of Asia Pacific
• Latin America
  • Brazil
  • Mexico
  • Rest of Latin America
• Middle East & Africa
  • GCC
  • South Africa
  • Rest of Middle East & Africa