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The global oleoresin market size was valued at USD 1.35 billion in 2021 and is projected to grow from USD 1.42 billion in 2022 to USD 1.99 billion by 2029, exhibiting a CAGR of 5.0% during the forecast period. The global COVID-19 pandemic has been unprecedented and staggering, with oleoresin experiencing lower-than-anticipated demand across all regions compared to pre-pandemic levels. Based on our analysis, the global market exhibited a decline of 4.60% in 2020 as compared to 2019.
Oleoresins are the concentrated forms of spices and herbs. They are resin-like, semi-solid extracts composed of essential or fatty oils. It has spice and aroma, which contribute to the taste of food products. A solvent extraction process obtains them from an herb or spice, first cleaned and then ground to a required meshing size. Distinguished solvents such as acetone, hexane, alcohol, or ethylene dichloride can be used. Extraction is done by percolation of the solvents through ground spices or herbs. The extract is further distilled to remove excess solvent, but the exact extraction process used depends on the kind of spice or herb.
Disruption of Supply Chains amid COVID-19 to Hinder Growth
The impact of COVID-19 has affected 215 countries. Lockdown measures and government emergency measures have disrupted the global supply chain of spices and herbs. It is projected that the situation will eventually return to normality. However, the pandemic has highlighted the fragility of herbs and spices supply chains. Unreliable supply chain and subsequent price increases dampen demand for spice & herbs extracts.
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Growing Popularity of Ethnic Cuisines to Increase the Product Demand
The product demand is mainly driven by the popularity of ethnic cuisine in the region such as Europe and North America. Consumers are getting more familiar with exotic flavors and ethnic food products, while various food manufacturers are using more spice & herbs extracts in their product formulations. However, demand for spice & herbs extracts is constrained by the unstable supply of raw materials, limiting the need in the coming year. This trend is expected to continue in the coming years. The growing interest in ethnic cuisines presents an opportunity for exporters of spice & herbs extracts in developing countries. Food manufacturers are replacing traditional spices with oleoresins as they provide many advantages over herbs and spices.
Ethnic cuisines have multidimensional flavor and texture profile, owing to the significant use of spices, seasonings, and condiments. Oleoresin, a concentrated form of spices and herbs, has relatively large use in ethnic cuisine which have high demand in developed regions such as North America and Europe. Thus, the rising popularity of ethnic cuisines, such as Asian, Mexican, and Italian in Americas and Europe, surges the product demand. Moreover, consumers are getting more familiar with ethnic products due to the rising immigrant and expatriate population in the U.S. and European countries. The food processors are also replacing traditional spices with oleoresins during product formulations; and this further provides growth opportunities for the global oleoresin market.
Growing Consumption of Processed Food & Beverage Products to Surge Demand
Oleoresins extracted from a particular herb or spice offer its ground form flavor characteristics with a more rapid release. It is produced to preserve the intense flavor and aroma of the spice and is widely used in the natural flavors and food colors market. Spice & herbs extracts are primarily used in processed foods such as sauces, soups, cheeses, soups, dressings, confectionery products, chutneys, processed meat & seafood, baked food, snacks, and processed food and processed food, vegetables, and beverages. The rising trend of using natural flavors in processed food and an increasing number of quick-service restaurants have led to increased product demand. The rise in awareness regarding the side effects of synthetic flavors and the health benefits of phytomedicines and herbal extracts has significantly driven the market growth.
Growth in Awareness of Health Benefits Offered by Oleoresins
Oleoresins offer benefits over traditional spices as flavoring agents. It provides food formulators a cheaper option with more robust pungency than other spices. The flavor is about 5–20 times stronger than that of corresponding herbs and spices on a per kilo basis, allowing, for instance, 5–10 kg yield of spice & herbs extracts to replace the equivalent of 100 kg of black pepper spice. The benefits of utilizing spice & herbs extracts in flavors and seasonings are manifold. It develops the visual appeal and flavors and raises the product's shelf life.
Price Fluctuations affect the Profit Realization of Processors
Spices needed to make oleoresins are accessible seasonally, whereas their necessity is throughout the year. The enterprises have to purchase and stock across seasons, bearing the risk of sudden loss. The raw materials prices fluctuate and expand due to different agro-climatic reasons. The frequent price fluctuation in the commodity market poses an increased risk for the stock. A significant threat to the oleoresin market growth is uncertainty over the supply of raw materials, consequently affecting the prices of spice & herbs extracts. Another primary concern faced by Indian producers is the re-export time granted to processors. These processors can import spices but have to re-export them in a value-added form within 120 days or pay a duty of 70% of the import value. Moreover, Indian processors are demanding an extension of the period. India's availability of spices is declining due to the large-scale dependence on the agro-climatic situation.
Paprika Holds Largest Market Share Owing to its Wide Utilization in Application Industries
The paprika segment holds the most significant market share due to the growing use of paprika oleoresins in the food & beverages industry as a coloring and flavoring agent. Paprika has excellent anti-aging, anti-inflammatory, antioxidant, and anti-depression properties. It is also helpful in treating cancer, while spice & herbs extracts can be used in dysentery, arthritis, and nausea treatments. Paprika comprises volatile essential oils and non-volatile resinous fractions containing the spice flavor. In terms of flavor and food formulation, it can be used as a potential alternative for whole-ground spices without changing the flavor.
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Food & Beverages Sector to hold the Largest Market Share Owing to Numerous Health Benefits
The food & beverages segment dominates the market share due to the wide product utilization to offer a natural fragrance and flavor in confectionery and beverages. Oleoresins are also used in many food and drinks such as spice mixtures, sauces, cheese, processed meat, sweets, and certain fruit juices. Apart from the flavor and fragrance, it is used as a coloring agent and seasoning materials in many food preparations. The product finds applications in several foods and drinks, including cheese, orange juice, spice mixtures, sauces, emulsified processed meats, and sweets. It provides a specific color texture for food products. It is used as seasoning material, especially in fast foods. It is also used to impart taste to cold drinks. It delivers high stability, making it suitable to be used in foods cooked and fried at high temperatures.
Europe Oleoresin Market Size, 2021 (USD Million)
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Europe to Exhibit Highest Growth due to Emerging Demand for Natural Ingredients
Europe accounted for the highest market share in 2021 and is anticipated to witness substantial gains over the forecast period. The region is considered a prominent market as it is among the essential ingredients consumed in food & beverages applications across the old-age and middle-age consumers in the area. Robust demand for spice oils coupled with food coloring products is the critical factor boosting the region’s growth. Furthermore, the increase in consumer disposable income, a shift in lifestyles, and growing demand for convenience foods are likely to contribute to the market development in the region. Growing consumer disposable incomes, shift in lifestyles, and increasing demand for convenience food contribute to the development of the product market in the European region.
The U.K., Germany, France, the Netherlands, Italy, and Spain are the biggest importers of spice & herbs extracts in Europe. Western European countries have the essential food markets in Europe. There is also growing popularity of ethnic food in some countries such as the U.K. and France. This offers opportunities to exporters of spice & herbs extracts in emerging countries as spice & herbs extracts, such as turmeric oleoresin, are increasingly used in ethnic foods. This trend is expected to continue in the coming years.
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Asia Pacific countries, such as China, India, and Japan, have traditionally used plant-derived medicines for numerous applications. The spice & herbs extract market has gained momentum globally, at a commercial level in the past 10 to 15 years due to the growing instances of diseases caused by chemical and synthetic-based products. Furthermore, significant investment in plant-derived nutritional & health products is projected to present promising opportunities for the growth and diversification of the region's spice & herbs extracts market. Due to all these factors, the area is expected to increase at the highest CAGR during the forecast period.
Companies to Focus on their Growth and Establish Market Dominance
Major companies have established their dominance in the market by higher integration throughout the value chain. Key companies include Synthite Industries Pvt. Ltd., Givaudan, Akay Group Ltd., Kancor Ingredients, Kalsec Inc., Plant Lipids, Asian Oleoresin Company, Bioprex Labs, TMV Group, Plant Lipids, Ozone Naturals, and Hawkins Watts.
An Infographic Representation of Oleoresin Market
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The research report provides a detailed analysis of the market. It focuses on key aspects such as leading companies, product types, and leading product applications. Besides, the report offers insights into the market trends and highlights key industry developments. In addition, the report encompasses several factors that have contributed to the market's growth in recent years.
Value (USD Billion)
By Product Type
Fortune Business Insights says that the value of the market was USD 1.35 billion in 2021 and is projected to reach USD 1.99 billion by 2029.
Growing at a CAGR of 5.0%, the market will exhibit steady growth in the forecast period (2022-2029).
The paprika segment is expected to be the leading segment based on product type in the global market during the forecast period.
Increase in demand for food & beverages is a key factor driving the market.
Synthite Industries Pvt. Ltd., Givaudan, Akay Group Ltd., Kancor Ingredients, Kalsec Inc., and Plant Lipids are a few key players.
Europe is expected to hold the highest market share in 2020.
Food & beverages application segment is expected to grow at a faster rate.
Growth in awareness regarding the product’s health benefits is a major growth factor for the market.
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