Natural Food Colors Market to 2025: Historical Analysis, Growth Rates, Generation, Investment Trends and Opportunities

The global natural food colors market size is anticipated to reach USD 2.5 billion by 2025. It is expected to register a CAGR of 6.7% from 2017 to 2025. Health benefits associated with natural food colors coupled with stringent regulations concerning their application in consumables are major factors driving market growth. Europe and North America have been dominating the global market for natural food colors and together these regions contributed a revenue share of 67.0% in 2017.

Regulations imposed by the European Union (EU), World Health Organization (WHO), and others on account of health concerns, are anticipated to drive demand for natural food colors. These products are manufactured from organic and natural food products. As a result, there is a steady rise in demand for these products from consumables, such as confectioneries, dairy products, oils and fats, and beverages. This factor is anticipated to bode well for global market over the forecast period.

The natural food colors market is segmented on the basis of product into carotenoids, curcumin, anthocyanins, carmine, copper chlorophyllin, and others. Carotenoids accounted for majority of market share owing to high demand for various shades of orange color from beverages, dairy and frozen products, and bakery and confectionery applications. In addition, beverage market is growing significantly owing to rising demand for natural fruit juices and health drinks. This factor is expected to propel the demand for natural food coloring in the forthcoming years.

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On the basis of application, the market is fragmented into bakery and confectionery, beverages, dairy and frozen products, meat products, oil and fat, fruits and vegetables, and food. Beverages segment is expected to account for the largest market share over the forecast period on account of growing launch of natural fruit drinks, soft drinks, and health drinks based on natural pigments. According to Naturex, at least 50% new beverages launched in North America contained natural food colors in 2015. During the same year, new product launches in Asia Pacific and Europe contained 69% and 89% of these colors respectively. Penetration of these colors is high in Europe. However, Asia Pacific is expected to be the fastest growing region in terms of demand over the forecast period.

Growing investments in research and development by key manufacturers to introduce healthier alternatives for synthetic colors, is expected to propel growth of the natural food colors market during the forecast period. The market is highly competitive and fragmented with presence of global players catering to local and regional demand across the globe. Companies have adopted different approaches to compete with each other, to maintain their market presence, and to increase profit earnings slowly every year.

For instance, Chr. Hansen, Naturex, Diana Naturals, and Sensient manufacture a wide range of products with manufacturing facilities and sales office present across all global regions. These companies have goodwill in the market owing to their well-established and long-term business experience. These companies compete on the basis of price to gain market share in emerging regions such as Asia Pacific and Central and South America where average spending capacity is relatively low.

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