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(Health-NewsWire.Net, February 24, 2020 ) The hydrocolloids market is estimated to be valued at USD 8.4 billion in 2018 and is projected to reach USD 11.4 billion by 2023, at a CAGR of 5.3% during the forecast period. The growth of the hydrocolloids market is driven by factors such as the expansion of the processed food industry due to the increasing demand for convenience foods in regions such as the Asia Pacific, South America, and the Middle East & African. Apart from this, manufacturers are engaged in R&D to offer high-quality hydrocolloids due to its multi-functionality in the food industry.
Hydrocolloids manufacturers are focusing on product innovations to expand the consumer base in this space. Leading players operating in the hydrocolloids market include DowDupont (US), Ingredion (US), Cargill (US), Kerry (Ireland), Archer Daniels Midland Company (US), Palsgaard (Denmark), Darling Ingredients (US), CP Kelco (US), Ashland (US), BASF (Germany), Tate & Lyle (UK), Glanbia (Ireland), Fuerst Day Lawson (UK), Koninklijke DSM N.V (Netherlands), and Nexira (France). Expansion of the food processing industry due to the increased demand for convenience foods in the emerging countries of the Asia Pacific and South America is projected to create lucrative opportunities for hydrocolloids manufacturers in the coming years.
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How is the potential growth of hydrocolloids in emerging markets?
The demand is high in developed markets such as the US and those in Europe. Developing countries, namely, China and India, in the coming years, will experience a strong upsurge in demand. This demand is driven by an increase in the processed and convenience foods production. The market in developed economies such as the US and Europe is saturated as the penetration and adoption of their usage is quite high. Emerging economies such as India and China in the Asia Pacific region are exhibiting high growth. Asia Pacific also provides the cost advantage in terms of production and processing. High demand, coupled with low cost of production is a key feature, which will aid the suppliers and manufacturers to target this market.
The demand for the usage of hydrocolloids is expected to grow continually in early adopting countries such as Japan and exponential growth is projected in new and emerging markets such as Australia and other Asia Pacific countries. In addition, Asia provides a cost advantage in terms of production and processing. High demand, coupled with low cost of production, is a key feature, which would aid hydrocolloids suppliers.
Fluctuations in prices of raw materials challenging the growth of the market
Hydrocolloid manufacturers have to face the challenge of an increase in the price of raw materials. The prices of raw materials for different hydrocolloids have been fluctuating, resulting in uncertainty in the market. The prices of different raw materials affect the price of the food hydrocolloids, which in turn impacts the price of the end food product. Hydrocolloids are also obtained from natural sources. Changes in climatic conditions have resulted in the shortage of raw materials, which in turn, has increased their prices. For instance, in the case of hydrocolloids, prices of the E.cottonii seaweed from Asia experienced a decline due to a shortage of production. The price of guar gum is increasing due to poor crop harvests in Asian countries such as India and Pakistan and the rise in demand from oilfields as guar gum is also used as a hydrocolloid in oil.
As companies try to pass on the cost to customers, it results in a price increase and as substitutes are available in the market, customers can switch to them. This restricts the growth of this market.
North America is the fastest-growing market for hydrocolloids and is projected to record the highest CAGR during the forecast period. The North American market is completely driven by the US, which accounted for nearly 84.0% of the market share in 2017. The US has a large market for bakery, confectionery, convenience food, and packaged food products; hence, it constitutes a major share in the market. Consumers in the US are calorie-conscious, due to which low-calorie and low-fat foods are popular in the country. The increasing prevalence of obesity and cardiac diseases have led to an increasing demand for natural and low-calorie food products among consumers. Food manufacturers are therefore concentrating on the application of natural hydrocolloids and their functions as fat replacers.
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