Northbrook, IL -- (SBWIRE) -- 08/03/2021 -- The food colors market is estimated at USD 4.3 billion in 2021; it is projected to grow at a CAGR of 4.7% to reach USD 5.4 billion by 2026. The global market is driven by the highly growing demand for natural food colors, and shifting taste and food appeal preferences among the populations globally. Increase in consumer awareness for clean-label products and the additional health benefits of certain natural food colors is estimated to drive the market for food colors.

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Driver: Increase in demand for natural colors

The demand for natural food colors as compared to synthetic food colors is increasing due to the growing consumer awareness for clean label products, health hazards associated with synthetic colors, and the health benefits achieved by using natural food colors. Synthetic colors can cause allergic disorders among consumers. The use of chemicals with heavy metals, such as lead or arsenic, to manufacture synthetic food colors can cause life-threatening diseases. Natural food colors are gaining market attention due to their natural origin, appealing to consumers who view them as a "safe to use" product. Natural colors reduce the risk of allergies and intolerance among consumers. These factors are witnessing an increase in demand for natural colors in food & beverage applications.

Restraint: Stringent regulations pertaining to the use of colors in food applications

Stringent regulations imposed by the federal bodies of various countries have restrained the usage of synthetic colorants in food & beverage products. In the US, the FDA is a key regulating body for food additives. It regulates the inclusion of synthetic colors in food & beverages. These regulations have restricted the use and demand for food colors. For instance, in 2008, a ruling was passed to ban food coloring in the UK. The six colors banned are E110, E104, E122, E129, E103, and E124. This has significantly impacted the consumption of food coloring in the food industry in the UK and its neighboring countries. Moreover, the lack of harmony in the regulatory norms and labeling guidelines for the use of organic and natural colors in different countries is also restraining the market growth. For instance, Blue #1, i.e., Brilliant Blue, which is banned in France, is widely used in other European countries.

Opportunity: Increase in ventures undertaken by manufacturers in Asia Pacific and South America

Food color manufacturers have significant opportunities for growth in the Asia Pacific and South American regions. Localizing operations could help in reducing costs and improving access to local distribution networks, thereby optimizing profit margins. Resources and labor are readily available at a cheaper rate in these regions. The governments in China and India are providing incentives for multinationals to set up Greenfield ventures. The Indian government has declared major tax breaks to attract multinational investors. China provides special tax incentives over the usual tax holidays to encourage foreign investors.

India, China, and Brazil are focusing more on investing in biotechnological development and its application in the production of natural coloring ingredients. Food & beverage manufacturers are witnessing significant demand from these countries due to the increased spending power of consumers on healthy food and changed eating habits & preferences. These factors are offering growth opportunities for food colors in the emerging economies of Asia Pacific and South America.

Challenge: Misperception pertaining to titanium dioxide among consumers

The FDA has categorized titanium dioxide as a safe to use colorant for food applications. Food-grade titanium dioxide used within maximum permissible limits is safe, and no health risks have been observed pertaining to it. Consumers perceive titanium dioxide as a chemical, which can cause life-threatening diseases, such as cancer. However, there are no adequately evident studies available to prove this. Further, misperceptions about the health hazards of titanium dioxide are a key factor creating a significant challenge for the market growth.

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Key players in this market include ADM (US), International Flavors & Fragrances Inc. (US), Sensient Technologies Corporation (US), DSM (Netherlands), Naturex (France), DDW (US), Döhler Group (Germany), Florio Colori (Italy), Lycored (Israel) and Kalsec Inc. (US). These players in this market are focusing on increasing their presence through agreements and collaborations. These companies have a strong presence in North America, Asia Pacific and Europe. They also have manufacturing facilities along with strong distribution networks across these regions.

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