Caramel Ingredients Market: Overview
The caramel ingredients market was worth USD 2519.5 million in 2021, and it is predicted to grow at a CAGR of 7.1 percent during the forecast period. Caramel is a confectionery product used to taste, fill, coat, color, and top foods and beverages. The market is primarily driven by a thriving convenience food business, rising consumer disposable income, and increased urbanization, particularly in developing economies. According to the National Confectioners Association, there were over 1,000 candy manufacturing facilities in the United States as of December 2019; the numbers are likely to grow in the following years due to rising demand for baked items, confectionery, and beverages, among other things. However, caramel is the most popular and frequently preferred component among consumers. As a result, it's found in confectionery items like salted caramel chocolates, sweets, and cereal bars. Item development, enticing bundling arrangements, interests in advertising and innovations, coordinated efforts with item producers in different application sections, and limited extension in newer business sectors are a few growths approaches significant market players to use. However, the market has been confronted with risk because of the introduction of caramel choices. Rising concerns about the hazardous effects of caramel components as a coloring specialist have been a big drawback for the business in the recent decade. Furthermore, the growing costs of caramel components and other raw materials will constrain market development. Furthermore, strengthening food and beverage logistics chains and growing the supply of caramel ingredients in the untapped market are important drivers providing growth chances for the global caramel ingredients to raise revenue share.
Caramel Ingredients Market: COVID-19 Impact
The pandemic of COVID-19 has significantly influenced the global caramel ingredient business. Stringent lockdowns imposed by governments and regulatory organizations worldwide due to the ongoing pandemic have broken several food processing firms. It has resulted in a decrease in retail sales of ice cream and sweets, which has further damaged the sales of caramel ingredient, which is widely utilized in these items. Because of the decline of COVID instances, the market will likely recover quickly with an upswing operation. The accumulation of surplus food supplies was not restricted to staples. During the lockdown, consumers purchased a considerable amount of snacks, processed meals, and liquids, raising global demand for caramel components. However, a key difficulty for the caramel ingredient market during COVID-19 was the continually shifting raw material prices caused by several impediments, including transportation and government prohibitions.
Caramel Ingredients Market: Drivers
Population's Desire for Confectionary Products Grows to Drive Market Growth
Confectionery product demand rises due to their extensive availability in various tastes, boosting the caramel market demand. Furthermore, children consume more confectionary products because of their sweet taste. This aspect encourages producers to create a range of confectionary goods using caramel to enhance taste, which increases confectionery sales. Additionally, rising per capita income and increased adoption of urban lifestyles propel the global food and beverage business. This has resulted from a shift in customer food preferences toward ready-to-eat and frozen bakery items. During the forecast period, this food and beverage industry trend will likely increase the caramel ingredient market. Furthermore, the expanding demand for naturally flavored products and the global developing beverage industry will likely create significant opportunities for market players. According to the National Confectionary Association, confectionery sales surged at 74.7% in 2021, fueling demand for the Caramel Market from 2021 to 2026.
Increasing Use in Bakery to Drive Market Growth
Because of increased consumer indulgence in bread and confectionery items, caramel ingredients are gaining global appeal. This chemical is also widely used in the beverage industry, where it can be found as syrups and powders in teas, fruit drinks, lemonades, colas, and beer, to mention a few. Recognizing the ingredient's multiple possibilities, organizations of all sizes have been seeking ways to capitalize on existing consumer and food trends to stay ahead of the competition. Product innovation, marketing and promotion efforts, appealing packaging solutions, collaborations with product makers in other application categories, and capacity expansion in newer markets are some of the market participants' growth tactics.
Caramel Ingredients Market: Restraints
Increasing Cost to Hamper Market Growth
The rising price of caramel is expected to impact the market's growth. The price of caramel recently jumped by 30% due to rising raw material prices. Caramel is made from sugar, sweetened condensed milk, corn syrup, oil, and calcium carbonate. All of the abovementioned materials' prices have risen dramatically since then, which is anticipated to impact the final manufacturing and pricing of Caramel goods, posing a hurdle to the market's growth.
Caramel Ingredients Market: Segment Overview
Color to Dominate Market due to Increase in Variety of Beverages
The Colors section will be the most profitable. Caramel color is used to color foods, which helps to change the structure and feel, attracting consumers to color food. As a result, the usage of caramel color in various beverages increases as it provides varied colors that increase the beverage variety, hence expanding the growth of the Caramel Market. Using caramel components as coloring agents in various foods and beverages is a traditional practice, with customers prioritizing color and appearance over flavor when deciding what to eat or drink. Caramel is commonly used as a coloring agent in baked products, soft drinks, sauces, and alcohol. However, throughout the last decade, researchers have raised concerns about specific forms of caramel coloring, indicating that the chemicals employed in these colors may be carcinogenic. These findings have harmed customer behavior and decisions, limiting segment expansion.
With Increased Demand From consumers, Bakery Category Dominated Market
In the forecast period, the bakery segment held the largest market share. Bakery ingredient usage is expanding in tandem with consumer indulgence in bakery products. Because caramel is one of the most extensively used colorants, it is found in various products, including cereals, some bread, cookies, deli meats, and beverages such as coffee, tea, soda, and alcoholic beverages. These applications attract customers and contribute to the overall sales volume of the merchandise. Furthermore, customer desire for additive-free, non-GMO, clean-label, and health-promoting baked foods has increased bakery product sales. However, caramel popcorn is popular as the most popular snack at sporting events, movie theatres, food festivals, music concerts, and other venues around the world. As a result, this segment is propelling the market forward.
Caramel Ingredients Market: Regional Landscape
North America to Dominate Market due to Increased Disposable Incomes
The North American market is expected to account for the biggest revenue share throughout the forecast period. Because of increased disposable incomes, urbanization, and the shift toward healthier diets, the emerging economies of North America represent a vast untapped potential for the growth of bakery ingredients, including caramel. North America dominates the caramel ingredient market, with development accelerated by technological advances in the food and beverage industries. However, with increased consumption of confectionary commodities, convenience food products are raising demand for caramel, fueling the North American caramel ingredient industry.
As a result, big manufacturers are constantly developing and broadening their product ranges to fulfill the changing consumer demands by boosting production. Consumers are interested in a wide range of meals with exceptional flavors that are also safe and nutritious flavors, such as caramel-flavored snacks. Together, they accounted for somewhat more than half of the market that year, owing primarily to the presence of major worldwide businesses. Caramel's growing popularity as an ingredient in applications such as packaged and frozen foods, desserts, bakery items, and confectionery has contributed greatly to the expansion of these regional markets. Companies have prioritized innovation and seasonal favorites as major growth strategies, keeping North America and Europe competitive throughout the projected period. For example, Mars Wrigley International Travel Retail will debut limited-edition M&M's and Twix options during the 2019 TFWA World Exhibition & Conference. Twix Salted Caramel and M&M's Crunchy Caramel are designed to provide consumers with something fresh, and enjoyable to enhance their travel experience.
Global Caramel Ingredients Market: Competitive Landscape
In July 2021, Big Train, a Kerry Group brand, introduced new dairy-free caramel latte tastes to its Big Train product range of hot and cold beverage mixes containing the "GanedenBC30" probiotic foodservice operators use. The goal of this innovation is to address consumer demand for healthy products. Moreover, in June 2021, The latest addition to British Bakels' True Caramel collection is the Chocolate Millionaires Caramel PF. This new product combines the flexible attributes of conventional Millionaire's Caramel with a chocolatey touch. The product was launched to broaden the company's True Caramel portfolio and enhance the global expansion of caramel ingredients.
Few of the players in the Caramel Ingredients Market include Nigay (France), Kerry Group (Ireland), Cargill (US), Puratos Group (Belgium), Sethness Caramel Color (US), Sensient Technologies Corporation (US), DDW The Color House (US), Metarom (France), Göteborgsfood Budapest ZRT (Hungary), Martin Braun KG (Germany), and Bakels Worldwide (Switzerland).
Regional Classification of the Global Caramel Ingredients Market is Listed Below:
Middle East and Africa
*Regions and countries are subject to change based on data availability.
Key Elements Included In The Study: Global Caramel Ingredients Market
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