Food Colors Market Expected to Reach $7.8 Billion by 2032—Allied Market Research

According to a new report published by Allied Market Research, titled, “Food Colors Market," The food colors market size was valued at $2.3 billion in 2022, and is estimated to reach $7.8 billion by 2032, growing at a CAGR of 13.2% from 2023 to 2032.

Ingredients used to impart the desired appearance to any food item or beverage are termed as food colors. They are found in sparkling water, packaged foods, frozen meals, alcohol-based drinks, processed foods, beverages, and sauces. Food colors are used in both commercial food processing and residential cooking and come in fluid, paste, gels, and powdered forms. The market for food colors comprises natural and artificial colors. The food industry has been evolving in terms of innovations and demand. Manufacturers are focusing on key innovations that cater to the requirements of the large consumer base. Increase in awareness toward health and wellness has been witnessed among people residing in developed as well as the developing countries. This has resulted in the increase in demand for various types of food colors made using organic products. Thus, natural colors are gaining increased traction among food & beverage manufacturers, which significantly drives the global food colors market growth.

Furthermore, increase has been witnessed in the number of netizens along with rise in internet penetration. Therefore, most of the key players in the food colors industry strategize on promoting their products on various social media platforms. Thus, the social media marketing strategy is expected to provide lucrative food colors market opportunities for growth. 

Moreover, the health benefits such as antioxidant and antimicrobial activities, offered by few natural colorants, boost the market growth. In addition, advancements in natural color ingredients and easy availability of raw materials from plants and animals supplement the growth of the market. However, the market growth for food colors is restricted by the ban on the usage of artificial colorants. Conversely, rise in R&D activities pertaining to new raw material sources offers food colorant manufacturers remunerative opportunity. 

Food colors have witnessed higher rate of penetration in North America and Europe. However, low availability has been observed in some major parts of Asia-Pacific and LAMEA, owing to low performing macro-economic factors, such as low internet penetration and insufficient marketing strategies by manufacturers. Thus, lower penetration of such products limits the food colors market demand.

Moreover, development of the tourism sector in the Europe region is providing roadside shops an opportunity to sell bakery products, which contain different types of food colors. Consumers’ inclination toward fast food products such as, sandwiches, burgers, and pizza has increased, which is expected to increase the requirement of food colors, as it is a core ingredient in the food preparation process Thus, all these factors are positively affecting the growth of food colors market in the Europe region.

The food colors market is segmented on the basis of type, application, and region. By type, the food colors market is classified into natural colors and artificial colors. By application, it is categorized into meat products, beverages, dairy, bakery and confectionery, processed food and vegetables, oils and fats, and others. By region, the market is analyzed across North America, Europe, Asia-Pacific, and LAMEA.

Depending on type, the natural colors segment dominated the market in 2022, garnering around three-fifth of the market share and is expected to grow at the highest CAGR of 13.3% from 2023 to 2032. In addition, due to growing consumer preference and understanding of the health advantages associated with natural colors, there is increase in demand for natural colors in the food industry. For instance, turmeric-based colors help prevent cognitive decline while carotenoid-based colors counteract age-related muscle deterioration. In addition, the implementation of strict food and beverage regulations surrounding the use of artificial food colors is anticipated to benefit the expansion of the global food colors market. The demand for natural food colors is also being significantly fueled by rise in awareness of the negative effects of artificial colors and the chemicals used in their production across a variety of end-use industries.

Depending on application, the others dominated the market in 2022, garnering majority of the market share; however, the bakery and confectionary segment is expected to grow at the highest CAGR of 14.2% from 2023 to 2032. In addition, increased color usage across a range of end-use industries has benefited the market for culinary colors. In addition, rise in consumer expenditure on pet food and cosmetics, along with increase in disposable income, has contributed to the market growth. As majority of the food colors are water-soluble and provide an appealing look to the food and beverages, various colors like tartrazine, sunset yellow FCF, quinoline yellow WS, allura red AC, and carmoisine are frequently used in seafood applications. In addition, a number of small and large market participants are creating natural colors to provide pets healthy food that are made with natural substances, thus creating growth opportunities for the food colors market.

Region-wise, Europe dominated the market in 2022, garnering a market share of 33.5%. The Europe market prefers natural colors due to growing consumer knowledge of the side-effects of synthetic colors. Europe has a long history of having a diverse and rich culinary culture. Due to the variety of cultures and eating customs, the food coloring sector has enjoyed a booming market. The Europe food colors market is anticipated to experience considerable expansion during the forecast period. Germany is the largest market for food coloring in Europe due to millennials' growing desire for dairy, seafood, bakery & confectionary items, and fresh & natural food colors.

Players operating in the food colors market have adopted various developmental strategies to expand their food colors market share, increase profitability, and remain competitive in the market. Key players profiled in the report AromataGroup SRL (Fiorio Colori SPA), Givaudan (Naturex S.A.), Kalsec, Inc., Archer Daniels Midland Company, Chr. Hansen A/S, D.D. Williamson & Co. Inc. (DDW), Dohler Group, International Flavors & Fragrances, Koninklijke DSM N.V., Sensient Technologies Corporation., GNT Group, FMC Corporation, Lycored, Roha Dyechem, BASF SE, Ajinomoto Co., Inc., Kolorjet Chemicals Pvt Ltd, Mane, Sethness Products Company, Kancor Ingredients Limited, Biocon Colors, Dynemic Products Ltd., Vinayak Ingredients India Pvt. Ltd., Aarkay Food Products Ltd., and Neelikon Food Dyes and Chemicals Ltd.

Key findings of the study

• According to food colors market trends, by type, the natural colors segment is estimated to witness significant growth, registering a CAGR of 13.3% during the food colors market forecast period.
• According to food colors market analysis, by application, the others segment is estimated to witness significant growth, registering a CAGR of 12.9% during the forecast period. 
• By region, Europe was the dominant region in 2022, occupying a major share of the market.