Plant-derived Natural Ingredient Properties Creating Growth Opportunities
Annatto extract, derived from red seeds of the achiote, is also known as Bixa Orellana. Primarily grown in tropical countries of Brazil, Peru, Mexico, Ecuador, India, and Sri Lanka its annual global production was more than 14,000 tons in 2017. Brazil is the largest producer of annatto seeds contributing to more than 50% of the global production share. This extract is widely used in the food industry as a colouring agent and sometimes as a taste enhancer. It lends yellow, orange, and red tones to food products. The pigment that produces the colours includes carotenoids, bixin, and norbixin.
Considered a natural food colour, annatto extract, has attained robust growth. Dwindling consumption of synthetic ingredients due to their side effects has prompted consumers to opt for organic or natural ingredients. Along with this, many countries have limited the use of synthetic colours in edible products. For instance, the USA allows seven food colours including Fast Red (which is prohibited in India and Sri Lanka) while the European Union (EU) permits sixteen synthetic food colours. On the other hand, Iran and Australia permit only thirteen food colours. Swelling health awareness across the globe coupled with the increased intervention of regulatory bodies regarding the usage of artificial colours in food products is expected to drive the annatto extract market growth over the forecast period.
Annatto: The Multifaceted Natural Colour for Various Industries
Annatto extract is extensively used in food industries. It is applicable in various food categories such as pasta, snacks, cheese, sauces, and butter. Apart from the food industry, it is being noticed by other industries such as cosmetics and textile.
The cosmetics industry uses annatto extract in shampoos, soaps, lipsticks, and skincare products. Increased consumer inclination towards chemical-free cosmetic solutions has boosted the demand for natural ingredients.
However, annatto extract is expensive, as annatto seeds are grown only in a limited number of countries resulting in higher dependency of end-use industries on import. In addition, annatto extract is less stable, and prone to colour degradation when exposed to high temperature or light, which may restrain the market growth. In 2016, the European Food Safety Authority announced the use of Annatto C and Annatto B extracts instead of the ones which were being used earlier. This is expected to slow down the growth of the market as the use will remain limited.
Annatto Extract to Gain Traction from Cosmetic Industry
The global annatto extract market is segmented on the basis of nature, product type, application, and region. Based on nature conventional segment is estimated to account for the largest value & volume share. While the organic segment is to register a relatively high-value CAGR over the forecast period. Increased demand for organic food products due to associated health benefits is expected to drive the segment growth over the forecast period.
Based on application, the cosmetic segment is expected to generate the relatively highest incremental dollar opportunity over the forecast period. The annatto pigment is used as a natural dye in several cosmetics such as hair colouring products, lipsticks, and paints amongst others. Increased demand for cosmetic products comprising plant-derived or natural ingredient is expected to boost the segment growth over the forecast period.
Health-conscious Consumers Boost Demand for Natural Ingredients in European Region
Europe is one of the largest markets for food and beverages products and is thus expected to lead the global annatto extract market. In 2018, the output of the food and drink industry reached US$1.4 trillion. In the past few years, demand for organic and natural food products in the region has seen robust growth. An increased number of health-conscious consumers demanding healthy alternatives are supporting the growth of natural food products.
In addition, strong EU regulations regarding the use of synthetic additives is also generating demand for natural ingredients. Manufacturers in the region are shifting their preferences from artificial to natural food additives. Thus, increased demand for natural food additives is expected to fuel the annatto extract market growth in the country.
Global Annatto Extract Market: Key Players
Some of the major players considered in the report include DDW The Color House, Naturex S.A, Sensient Colors LLC, Kalsec Inc, Chr. Hansen Holding A/S, Daxia Ingredientes e aditivos LTDA, WILD Flavors, Givaudan SA, IFC Solutions, and International Flavors & Fragrances Inc. (Frutarom Natural Solutions Ltd).
Key Elements Included In The Study: Global Annatto Extract Market
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