Annatto Market Size
| Study Period | 2019 - 2029 |
| Base Year For Estimation | 2023 |
| CAGR | 3.72 % |
| Fastest Growing Market | Asia Pacific |
| Largest Market | North America |
| Market Concentration | Low |
Major Players
*Disclaimer: Major Players sorted in no particular order |
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Annatto Market Analysis
The annatto market is projected to register a CAGR of 3.72% over the next five years.
- The increasing demand and consumer preference for minimally processed foods and the health-promoting properties of natural colorants are expected to drive the annatto market globally. Wide varieties and applications of annatto in the food and beverage industry make it one of the most required substances for enhancing food products. In addition, increasing uptake of functional foods is also expected to drive its market in developing countries like India and China. The factor above drives the need for natural, recognizable, and pronounceable ingredients.
- The worldwide annatto business is thriving as consumers understand the value of clean labeling. Additionally, it is claimed that ethical and ingredient-sourcing standards would propel clean-label concepts to advanced stages of development. Therefore, companies are actively making more effort to have their ingredients and additives certified as clean-label products. Due to qualities like low processing, efficiency in reformulation, non-GMO certification, and safety, natural food colorants like bixin will continue to be in higher demand.
- The market's expansion is significantly constrained by Annatto's lesser stability when compared to synthetic colors like Azorubine, Allura Red, and others. The product's higher price relative to its alternatives is another factor hindering the market's rapid expansion. Furthermore, the product's extreme sensitivity to environmental factors, including temperature and light, which causes color deterioration, may restrain market expansion during the projected period.
Annatto Market Trends
Growing Use of Natural Food Colorants in Processed Food Industry
- The demand for natural food colorants is growing as awareness of health and environmental issues has increased significantly. As the need for natural dyes is expected to grow in the forecast period, the use of annatto will also increase, as it naturally gives a unique red/orange color. Annatto is a natural colorant responsible for the yellow color of butter, margarine, and cheese. It is also used in many commercial products, such as processed meats, smoked fish, beverages, and various packaged foods.
- For instance, in January 2021, GNT Group added a new pink shade coloring agent under its EXBERRY® brand with the name EXBERRY® Shade Pink - OD, developed for fat-based use applications. It is also available in variants of red, yellow, orange, blue, and green.
- Furthermore, the growing awareness of the ill effects of synthetic colors has triggered the demand for natural colors, which have high costs compared to synthetic dyes.
- The increasing disposable incomes and changing lifestyles in emerging countries drive demand for processed foods. Moreover, companies tend to add food colorants to attract a more significant target segment. Natural food coloring in the food and beverages industry is gaining popularity, with an increasing number of raw food colors and dyes produced commercially.
- One of the main strategies corporations use to meet the escalating consumer demand is innovation in natural food colors to lessen the application difficulties encountered by the food industry. Therefore, due to growing health awareness, food manufacturers are concentrating on using raw food additives that are organic, functional, have high effectiveness, and have low toxicity in food products.
- For example, Kraft Foods recently announced that its boxed noodles products would be colored with natural ingredients, such as annatto, paprika, and turmeric. Hence, the factors mentioned above act as significant market drivers globally.
North America Dominants the Annatto Market
- North America holds the largest market share in the annatto market globally. Furthermore, the United States is one of the largest markets for annatto. According to Food and Agriculture Organization (FAO), with nearly 40% of global imports, the USA is the largest annatto market worldwide. It sources over 60% of the supplies from Peru and the remainder from the Caribbean region. The increasing government support for adopting natural food colors in various food & beverage applications is expected to boost the growth of the annatto market in North America.
- Also, the rising health consciousness, favorable food safety standards, the popularity of clean-label products, and substantial R&D investments are favorably driving the market. Because of the rising rates of foodborne disease and the growing demand for safe food products free of objectionable food additives, the United States has strict regulations for food colorants. Synthetic food colorants currently dominate the industry, but it is predicted that customers' shifting preferences toward natural food colorants will propel this category at the fastest growth rate.
- Beverage consumption has grown significantly over time due to the availability of products for every type of customer that needs health-related outcomes, including functional foods, enhanced drinks, juices, and CSDs (generally regarded as an indulgence). Since colorant is one of the essential ingredients in most beverages, the growth of the beverage sector directly complements the development of the food colorant market, which in turn drives the food colorant market (including Annatto) in the region.
- For instance, in 2022, according to Beverage Marketing Corporation and International Bottled Water Association reports, the most popular type of beverage in the United States was bottled water, which consumed over 25% of all beverages. Further, it is followed by carbonated soft drinks, which accounted for approximately 18.7%.
- Additionally, according to UN COMTRADE, from 2018 to 2021, the United States remained the top importer of non-alcoholic beverages (HS code: 220299) when compared globally, with an import value of USD 1,059,010 thousand. Hence, this can be attributed to increased sales growth for food colorants such as annatto. Therefore, the increasing demand can be attributed to the growth of the annatto market in this region.
Annatto Industry Overview
The annatto market is competitive in nature, with many domestic and multinational players competing for market share. Some major key players in the annatto market include AICA-COLOR, Biocon del Peru, DDW, FMC, and Chr. Hansen Holding A/S, among others. Emphasis is given to the merger, expansion, acquisition, and partnership of the companies and new product development as strategic approaches adopted by the leading companies to boost their brand presence among consumers and increase their product line and market share. Further, these key players differentiate their offerings and compete on different factors, including product offerings, ingredients, packaging, price, functionality, and marketing activities, to gain a competitive advantage.
Annatto Market Leaders
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AICA COLOR
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Chr. Hansen Holding A/S
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BIOCONCOLORS
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DDW The Color House
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FMC Corporation
*Disclaimer: Major Players sorted in no particular order
Annatto Market News
- November 2022: Sun Chemical expanded its natural colorant product portfolio by offering SunPuro Natural Annatto O and SunPuro Natural Annatto A.
- May 2021: Oterra was announced as the new name of the former Chr. Hansen Natural Colours company, as announced recently. The new name is based on the Latin word for earth, which reflects the company's commitment to supplying the world with natural colors and advancing the development of natural, authentic, safe, and sustainable food. The rebranding represents the company's focus on providing natural solutions to meet the increasing demand for healthy, sustainable, and environmentally-friendly products.
- April 2021: The agreement between Chr. Hansen Holding and EQT was successfully finalized, and the international investment firm has acquired the Natural Colours section of the Danish ingredient provider. The divestment is a part of Chr. Hansen's 2025 Strategy is to establish itself as a distinctive bioscience business focusing on fermentation and microbial technology platforms.
Annatto Market Report - Table of Contents
1. INTRODUCTION
- 1.1 Study Assumptions and Market Definition
- 1.2 Scope of the Study
2. RESEARCH METHODOLOGY
3. EXECUTIVE SUMMARY
4. MARKET DYNAMICS
- 4.1 Market Drivers
- 4.2 Market Restraints
-
4.3 Porter's Five Forces Analysis
- 4.3.1 Threat of New Entrants
- 4.3.2 Bargaining Power of Buyers/Consumers
- 4.3.3 Bargaining Power of Suppliers
- 4.3.4 Threat of Substitute Products
- 4.3.5 Intensity of Competitive Rivalry
5. MARKET SEGMENTATION
-
5.1 Type
- 5.1.1 Oil-soluble
- 5.1.2 Water-soluble
- 5.1.3 Emulsified
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5.2 Application
- 5.2.1 Food & Beverage
- 5.2.2 Natural Fabric industry
- 5.2.3 Cosmetic industry
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5.3 Geography
- 5.3.1 North America
- 5.3.1.1 United States
- 5.3.1.2 Canada
- 5.3.1.3 Mexico
- 5.3.1.4 Rest of North America
- 5.3.2 Europe
- 5.3.2.1 United Kingdom
- 5.3.2.2 Germany
- 5.3.2.3 France
- 5.3.2.4 Russia
- 5.3.2.5 Italy
- 5.3.2.6 Spain
- 5.3.2.7 Rest of Europe
- 5.3.3 Asia Pacific
- 5.3.3.1 India
- 5.3.3.2 China
- 5.3.3.3 Japan
- 5.3.3.4 Australia
- 5.3.3.5 Rest of Asia-Pacific
- 5.3.4 South America
- 5.3.4.1 Brazil
- 5.3.4.2 Argentina
- 5.3.4.3 Rest of South America
- 5.3.5 Middle East & Africa
- 5.3.5.1 South Africa
- 5.3.5.2 United Arab of Emirates
- 5.3.5.3 Rest of Middle East and Africa
6. COMPETITIVE LANDSCAPE
- 6.1 Most Adopted Strategies
- 6.2 Market Share Analysis
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6.3 Company Profiles
- 6.3.1 Aarkay Food Products
- 6.3.2 AICA COLOR
- 6.3.3 Amerilure, Inc.
- 6.3.4 BIOCONCOLORS
- 6.3.5 DDW The Color House
- 6.3.6 FMC Corporation
- 6.3.7 Chr. Hansen Holding A/S
- 6.3.8 Frutarom Natural Solutions BU
- 6.3.9 Kalsec
- 6.3.10 Sun Chemical
- *List Not Exhaustive
7. MARKET OPPORTUNITIES AND FUTURE TRENDS
Annatto Industry Segmentation
Annatto is an extract of achiote seeds extensively used as a natural food-grade colorant in food processing applications.
The annatto market is segmented by type, application, and geography. Based on type, the market is segmented into oil-soluble, water-soluble, and emulsified. Based on application, the market is segmented into food & beverage, the natural fabric industry, and the cosmetic industry. By geography, the study provides an analysis of the annatto market in emerging and established markets across the globe, including North America, Europe, Asia-Pacific, South America, and Middle East & Africa.
For each segment, the market sizing and forecast have been done based on value (in USD million).
| Type | Oil-soluble | |
| Water-soluble | ||
| Emulsified | ||
| Application | Food & Beverage | |
| Natural Fabric industry | ||
| Cosmetic industry | ||
| Geography | North America | United States |
| Canada | ||
| Mexico | ||
| Rest of North America | ||
| Geography | Europe | United Kingdom |
| Germany | ||
| France | ||
| Russia | ||
| Italy | ||
| Spain | ||
| Rest of Europe | ||
| Geography | Asia Pacific | India |
| China | ||
| Japan | ||
| Australia | ||
| Rest of Asia-Pacific | ||
| Geography | South America | Brazil |
| Argentina | ||
| Rest of South America | ||
| Geography | Middle East & Africa | South Africa |
| United Arab of Emirates | ||
| Rest of Middle East and Africa |
Annatto Market Research FAQs
What is the current Annatto Market size?
The Annatto Market is projected to register a CAGR of 3.72% during the forecast period (2024-2029)
Who are the key players in Annatto Market?
AICA COLOR, Chr. Hansen Holding A/S, BIOCONCOLORS, DDW The Color House and FMC Corporation are the major companies operating in the Annatto Market.
Which is the fastest growing region in Annatto Market?
Asia Pacific is estimated to grow at the highest CAGR over the forecast period (2024-2029).
Which region has the biggest share in Annatto Market?
In 2024, the North America accounts for the largest market share in Annatto Market.
What years does this Annatto Market cover?
The report covers the Annatto Market historical market size for years: 2019, 2020, 2021, 2022 and 2023. The report also forecasts the Annatto Market size for years: 2024, 2025, 2026, 2027, 2028 and 2029.
Annatto Industry Report
Statistics for the 2024 Annatto market share, size and revenue growth rate, created by Mordor Intelligence™ Industry Reports. Annatto analysis includes a market forecast outlook 2029 and historical overview. Get a sample of this industry analysis as a free report PDF download.
