Annatto Extract Market Size, Share, Growth Report 2032

Annatto Extract Market Size & Industry Analysis:

The global annatto extract market size was worth around USD 214 million in 2021 and is predicted to grow to around USD 250.92 million by 2030 with a compound annual growth rate (CAGR) of roughly 4.9% between 2022 and 2030. The report analyzes the global annatto extract market’s drivers, restraints/challenges, and the effect they have on the demands during the projection period. In addition, the report explores emerging opportunities in the annatto extract market.

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Annatto Extract Market: Overview

Annatto is a spice that is used as a natural coloring agent and is obtained from achiote shrub. The wide application of annatto as a food color and dye also helps in enhancing the flavor of the food. Annatto is heart-shaped and is completely covered with hair. When the fruit ripens it opens up its pods and the red-colored seeds are obtained. The yellow to orange color range can be obtained from the annatto extract which is utilized in several commercial products. Annatto extract also has various medicinal properties.

Key Insights

• As per the analysis shared by our research analyst, the global annatto extract market is estimated to grow annually at a CAGR of around 4.5% over the forecast period (2022-2030).
• In terms of revenue, the global annatto extract market size was valued at around USD 214 million in 2021 and is projected to reach USD 292 million, by 2030.
• The increasing demand for annatto extracts from the food and cosmetics industry is expected to drive market growth during the forecast period.
• Based on the pigment, the bixin segment accounted for the largest market share in 2021.
• Based on the product type, the oil-soluble segment is projected to dominate the market during the forecast period.
• Based on the end user, the food industry segment is projected to hold the majority of the market share during the forecast period.
• Based on region, North America is expected to dominate the market during the forecast period.

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Annatto Extract Market: Growth Drivers

Growing application of annatto extracts in personal care products to drive the market expansion

The need for annatto extract is boosted by the rapidly expanding natural and plant-based industry, which is expanding to meet shifting consumer preferences for personal care goods. Natural dyes and colorants are highly preferred by customers who prefer cosmetics and personal care products made from plants and other natural ingredients. Consumers' growing preference for chemical-free and natural cosmetics is forcing manufacturers to incorporate natural components into cosmetics and personal care products, which is helping the global annatto extract market expand.

Annatto Extract Market: Restraints

The high production cost of annatto is expected to hamper the market growth

The low production cost of synthetic colors in comparison to plant-based food colors is a crucial reason for their popularity. Plant-based food colors are more expensive than synthetic colors due to their high production costs. Synthetic colors may be manufactured on a big scale because they do not require harvesting and processing, but plant-based food colors cannot be manufactured on a large scale because they require harvesting and processing. Thus, the high production cost of annatto as a colorant is expected to hamper the growth of the market during the forecasted period.

Annatto Extract Market: Opportunities

Growing demand from the food industry is expected to flourish the market expansion

The growing demand from the food industry is expected to provide a lucrative opportunity for the global annatto extract market expansion during the forecast period. In the food industry, annatto extracts can be used in several applications to enhance the color and aroma of the food. The fat-soluble annatto extracts can be applied in pasta, snacks, fillings, toppings, sweets, butter, processed cheese, and others. The water-soluble extracts can be applied in ice creams, confectionery, and others. In addition, the growing consumer preference towards natural additives in food products owing to the increasing health concerns among the population drives the annatto extracts market growth.

Annatto Extract Market: Challenges

Low stability of annatto act as a major challenge for the market expansion

The factors such as the low stability of annatto as compared to synthetic colorants such as Allura Red and Azorubine act as a challenge for the growth of the market. Some dyes fade or change color when exposed to particular pH values. Most synthetic colors are resistant to low PH. Annatto precipitates at a pH of less than 4 and carmine decomposes at a pH of less than 3.5 in natural colors. However, by changing their form, these dyes can be employed in acidic situations. An Annatto emulsion, for example, resists deposition at low PH. Anthocyanins are the most stable, red at pH less than 3.8, fading or changing to an unstable blue or purple at higher pH values.

Annatto Extract Market: Segmentation

The global annatto extract market is segmented based on pigment, product type, end user, and region

Based on the pigment, the global market is bifurcated into bixin, carotenoid, and norxibin. The bixin segment is expected to dominate the market during the forecast period. Due to its oil-soluble qualities and numerous uses in the leather, cosmetics, and dairy industries, the bixin pigment section commands the annatto extract market. Growing consumer knowledge of the negative effects of ingesting synthetic colorants has driven them to convert to natural color additives, which is further fueling the segment's expansion. On the other hand, the norbixin segment is anticipated to experience a significant increase throughout the projection period. The main application for the water-soluble pigment norbixin is the color of the cheese. Due to the rising need for cheese, its demand is anticipated to increase in the upcoming years.

Based on product type, the market is segmented into oil-soluble annatto, water-soluble annatto, and emulsified annatto. The oil-soluble annatto held the largest market share in 2021 and is expected to dominate the market during the forecast period. Oil-soluble annatto contains bixin and either dissolved or suspended oil.

The category expansion is fueled by strong suspension colors, improved storage stability, and other economic considerations. Oil-soluble annatto, which can add hues ranging from yellow to orange-red, is utilized for a large variety of refined food-grade oils, including soybean oil, sunflower oil, and rapeseed oil. On the other hand, the water-soluble segment is expected to grow at a significant rate over the forecast period. Water-soluble annatto colors consist of norbixin and are primarily used in dilute liquids or powder forms.

Based on end-user, the global annatto extract market is bifurcated into food, cosmetics, textile, and others. The food segment is expected to dominate the market over the forecast period. Colorants are widely utilized in the food sector to attract customers. The demand for foods with little processing, however, has increased as a result of growing health consciousness, which is fueling the segment's expansion.

Additionally, the market's demand for dairy products has expanded due to the world's growing population and health consciousness. The Food and Agriculture Organization (FAO) reports that worldwide milk production increased by 1.4% from 2018 to 852 million tonnes in 2019, further fueling market expansion. Another factor boosting market growth is the rising popularity of lactose-free dairy products, particularly in western regions.

On the other hand, the cosmetic segment is expected to grow at the highest CAGR during the forecast period. The demand for cosmetic products using natural colorants has greatly increased due to consumers' growing knowledge of the purity and safety of cosmetic products. The personal care and cosmetics industries' rising desire for plant-based products also contributes to the market's expansion.

Recent Developments:

• In March 2020, Suja, producer and distributor of organic, cold-pressed, and non-GMO beverages announced the launch of a new line of juices developed in partnership with Whole Foods Market. The company used natural coloring ingredients such as annatto for juice production.
• In July 2020, Chr. Hansen announced the expansion of its food category i.e. soups, flavored drinks, surimi, and others that include products such as annatto for coloring purposes.

Annatto Extract Market Report Scope:

Annatto Extract Market: Regional Analysis

North America is expected to dominate the market during the forecast period

North America has the world's largest annatto market share. Furthermore, the United States is one of the largest annatto markets. It gets more than 60% of its supplies from Peru and the rest from the Caribbean region. The growing government support for the use of natural food colors in a variety of food and beverage applications is likely to drive the annatto market in North America further. Moreover, Europe is a significant region in the annatto market, and it is expected to maintain its lead during the projected period.

The region's dominance in the worldwide annatto market is mostly due to the high demand for natural colorants in cosmetics and personal care products. Furthermore, the Asia Pacific region is expected to grow at the highest CAGR during the forecast period. The regional growth is attributed to the increasing consumer preference towards natural products as well as the growing cosmetics industry. For instance, According to Statista, the retail sales value of cosmetics in China rose to $52.3 billion in 2020, making it the world’s second-largest beauty and personal care product market after the United States. U.S. Department of Commerce data showed that in 2020, the U.S. exported $838 million of personal care and cosmetic products to China, up 2.2% from the previous year. Thus, the aforementioned facts support the market growth.

Annatto Extract Market: Competitive Analysis

The global annatto extract market is dominated by players like Fiorio Colori, Sensient Technology Corporation, D.D. Williamson & Co. Inc., Naturex S.A., Kalsec Inc., Chr. Hansen Holding A/S, FMC Corporation, and Wild Flavors, among others.

The global annatto extract market is segmented as follows:

By Pigment

• Bixin
• Carotenoid
• Norxibin

By Product Type

• Oil-Soluble Annatto
• Water-Soluble Annatto
• Emulsified Annatto

By End User

• Food
• Cosmetic
• Textile
• Others

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