Annatto Market

Annatto Market Outlook (2022 - 2032)

The global market has witnessed a rise in the demand for natural food ingredients and colorants, which can be attributed to the increasing consumer demand for naturally-derived and safer food ingredients. Color additives reinforce the colors already present in the food and ensure uniformity of the food from season to season and batch to batch.

Over the years, the natural colorant market has evolved and has come up with several new natural food colorants such as anthocyanins, beet colorants, carotenoids, and annatto. Annatto colorants are derived from annatto seeds that grow on a tree called Bixa Orellana. The Bixa Orellana tree is known as Annatto or as ‘Achiote’ in large parts of South America and as ‘Urucum’ in Brazil.

Annatto seeds and extracts have been in use for over a century in Europe and North America to impart a yellow-to-red color to foods, especially dairy products such as cheddar and Colby cheeses. The worldwide annatto market is valued at USD 227.53 Million in the year 2022. Further, this market is anticipated to rise to USD 370.62 Million by end of 2032. The market is expected to grow with a CAGR of 5% in the forecast duration (2022-2032).

Report Attributes	Details
Annatto Market Size (2022 A)	USD 227.53 Million
Base Year for Estimation	2022
Forecast duration for this research	2022-2032
Forecasted Market value (2032 F)	USD 370.62 Million
Global Market Growth rate (2022-2032 E)	CAGR of 5%
Key Companies Profiled	BioconColors, Amerilure Inc., Kalsec Inc., Sensient Technologies Corporation, D.D. Williamson & Co. Inc. ADM (Wild Flavors)

Drivers of demand in Annatto Market

“Food and Cosmetic sector: Rise in clean additives to foster the growth”

At present, annatto ranks second in economic importance worldwide among all natural colors and it is the most frequently used natural colorant in the food industry. Besides the food industry, the demand for the Annatto market has been slowly gaining traction in the cosmetic world as well.

Cosmetic chemists have drawn inspiration from the use of annatto by the Amazonians for sunless tanners. While popular as a colorant, annatto is widely used in skincare products, especially in brands that use all-natural ingredients as well. Annatto in its various forms, such as extract, oil, and powder, is witnessing demand in large-scale food, cosmetic and retail sectors as well.

The rising awareness of clean labeling is a major decisive factor behind the rising annatto market globally. There is an alarming rise in demand for naturally recognizable ingredients and sourcing contents in the growth stages. This natural emphasis on the need for putting effort into green-label certifications. Natural food colorants are likely to see rising demand in the upcoming years owing to favorable consumption patterns.

There is a tremendous rise in demand for organic cosmetics in recent years which has opened an array of opportunities for new manufacturers in the industry to include natural colorants. The plant-based cosmetics are aggregating demand for natural ingredients from the consumer end.

Restraints faced by Annatto Market Manufacturers

“Impact of Covid-19: sluggish supply chain Network”

The recent pandemic of covid-19 has affected severely the supply chain network of firms across all industries. The management of operations was disrupted due to lockdowns and restrictions. The accelerated transportation costs and higher distribution costs associated with the products declined sales during the period.

There were limitations imposed by governments on non-essential imports and exports which resulted in border closures globally. While global lockdowns made people stay locked in their homes for months which affected demand during the period. The food additive brands started to work on the recovery of sales and demand-supply post-covid-19 pandemic. This is expected to mark an upward growth trajectory for product sales in the annatto market in the forecast period.

Furthermore, the low stability of annatto in comparison with synthetic colorants is an imposing challenge for manufacturers. The deterring factor for growth in annatto markets is higher cost related to products than other markets. the products are hypersensitive which can obstruct the growth of the annatto market.

Opportunities for Annatto Market

The global natural food colors market incorporates coloring foodstuffs and minimally processed pigments derived from micro-lags, plant parts, fruits, and vegetables for imparting color to various foods and beverages. North America is among the prominent regions for natural food colors owing to technological advancements in the natural color extraction process and economical and intense colors.

The Asia Pacific is another considered dominant region for the natural colorant market due to the rise in the consumption rate of the product. Hence these two regions are being considered as the opportunistic factor for the annatto market in order to gain traction and accordingly generate sales.

Segment Wise Analysis

Based on the type of product fat-soluble bixin reigns in the application segment in the meat and dairy industry. The orange hues are made of higher amounts of bixin in oil-soluble annatto. The demand for solvent-extraction emulsified annatto is rising due to the increasing consumption of dairy products. The use of oil-soluble pigments and emulsified pigments is an effective option for manufacturers in the dairy industry.

Based on the end-user application the food industry is leading in terms of increasing demand for natural ingredients. Annatto is included in approved colorants by the American food and drug administration (FDA). These additives are commonly applied in the beverages and bakery sector. This rising demand in the food sector is expected to enhance demand for natural cosmetics in the upcoming years.

Brief Approach to Research

The company will follow a modeling-based approach and triangulation methodology to estimate the data covered in this report. A detailed market understanding and assessment of the applications, types, forms, and end uses of the product segments covered in the study is followed by carrying out a demand-side approach to estimate the sales of target product segments, which is then cross-referenced with a supply-side assessment of value generated over a pre-defined period. The statistics and data are collected at a regional level, consolidated, and synthesized at a global level to estimate the overall market sizes.

Regional analysis

“The European region is likely to continue domination in the Annatto market share”

Annatto is the second most significant colorant used in food after caramel. There are mushrooming demand prospects for bixin and norbixin owing to increasing demand in the food and beverage sector. Countries like Germany, France, and the UK in this region are likely to gain the fastest CAGR in the forecast period.

Asia Pacific region is anticipated to grow with a CAGR of 5.7% in the assessment period in 2022-2032. The aggregate populace in this region especially in countries like India and China is anticipated to rise in demand for annatto in the forecast period.

The demand for Annatto is likely to continue in the North American region due to rising clean label needs across many end-user industries. The regulatory scenario and policies regarding natural colorants in north America encouraging the launch of natural colorants are fostering demands. The USA is dominant in the North American region owing to its higher rank in terms of the leading market in non-alcoholic and baked goods.

Competitive landscape

The key companies in the annatto market are increasing their portfolio and distribution network to lead in the market. The research and development of present and novel products are regulated by the food regulation authorities. The key market players in the industry are opting for collaborations due to an increase in market strength and prominence.

Mergers and strategic acquisitions are commonly opted by industry players to increase their market penetration. The company Givaudan SA had an acquisition with Activ international in 2017 which was intended to increase the product range of flavors and organic colorants. Companies focusing on product innovation and pricing policies are likely to gain a dominant share in the annatto market in the forecast period.

Recent developments

• In 2018, FMC Corporation and Hansen, announced a five-year extension of their collaboration to develop and commercialize natural solutions for the agricultural industry.
• In Feb 2018, Sentient Technologies Corporation announced that it has reached a definitive agreement to acquire the natural color business of GlobeNatural, a leading natural food and ingredient company, based in Lima, Peru, owned by the Michell Group.

Global Annatto Market: Segmentation

• By Nature

  • Organic
  • Conventional

• By Form

  • Raw
  • Processed
    • Liquid
    • Powder
    • Extract

• By Product Type

  • Annatto - Bixin
  • Annatto - Norbixin

• By End Users

  • Food Industry
  • Cosmetic
  • Retail

• By Distribution Channel

  • Direct
  • Indirect
    • Supermarket/Hypermarket
    • Convenience Store
    • Specialty Store
    • E-Retailers

• By Region

  • North America
    • U.S.
    • Canada
  • Latin America
    • Brazil
    • Mexico
    • Argentina
    • Chile
    • Peru
    • Rest of Latin America
  • Europe
    • EU – 4 (Germany, France, Italy, Spain)
    • U.K.
    • BENELUX (Belgium, Netherlands, Luxemburg)
    • NORDIC (Norway, Denmark, Iceland, Sweden)
    • Eastern Europe (Poland, Ukraine, Czech Rep., etc.)
    • Rest of Europe
  • CIS & Russia
  • Japan
  • APEX
    • Greater China
    • India
    • Korea
    • ASEAN Countries
    • Rest of APEJ
  • Middle East & Africa
    • GCC Countries
    • Turkey
    • Iran
    • Israel
    • South Africa
    • Rest of MEA