Hydrocolloids Market Size, Share & Covid-19 Impact Analysis, By Type (Xanthan Gum, Carrageenan, Guar Gum, Gelatin, and Others), Source (Microbial, Animal, Seaweed, and Others), Application (Food & Beverages, Pharmaceuticals, and Cosmetics & Personal Care), and Regional Forecast, 2020-2032

The global hydrocolloids market size accounted for USD 9.07 billion in 2019 and is projected to grow from USD 17.55 billion in 2020 to USD 13.30 billion in 2032 at a CAGR of 5.36% during the forecast period. Asia Pacific dominated the hydrocolloids market with a market share of 37.93% in 2019. The hydrocolloids market in the U.S. is projected to grow significantly, reaching an estimated value of USD 2.50 billion by 2032, driven by rising application of hydrocolloids in manufacturing different food products.

The rise in the CAGR is attributable to this market’s demand and growth, returning to the pre-pandemic levels once the pandemic is over. The global impact of COVID-19 has been unprecedented and staggering, with hydrocolloids witnessing a slight negative impact on demand across all regions amid the pandemic.

Hydrocolloid is a broad-spectrum term used to define a heterogeneous group of polysaccharides that form a gel-like substance when dispersed in water. They are extracted from various sources such as plants, microbes, animals, seaweed, & others, gaining huge popularity among several manufacturers worldwide. They are widely used in various application sectors such as food and beverages, cosmetics, and pharmaceuticals due to their thickening, gelling, stabilizing, and improving textural properties. The increasing demand for convenience foods has led manufacturers to utilize such products extensively in various processed foods, which is expected to boost sales in the forthcoming years.

Disruptions in Supply Chain Management amid COVID-19 to Impede Market Growth

The global COVID-19 pandemic outbreak resulted in the closure of various processing plants across countries due to the implementation of lockdowns to contain the spread of the virus. Various supply chain disruptions were observed during the pandemic as transportation and logistics remained non-functional due to the shortage of labour and border lockdowns. The travel curbs leading to restrictions on cattle movements and shutting down abattoirs have negatively impacted hydrocolloid production.  According to the report published by Fortscap Healthcare Ltd., India, the company slashed its natural capsule production from 23 million units per day to 14-16 million units owing to the shortage of gelatin.

Similarly, in May 2020, Indonesia’s Tropical Seaweed Innovation Network (TSIN) stated that the virus outbreak has directly impacted the country’s seaweed farmers. The demand for raw materials has decreased, which has led to a fall in their price. However, the global economy is slowly overcoming the shortfalls and regaining its normal pace, which is assumed to boost market growth in the forthcoming years.

HYDROCOLLOIDS MARKET TRENDS

Surging Trend of Incorporating Hydrocolloids in Cosmetic Products to Fuel Growth

The demand for natural ingredients and clean-label cosmetic products is increasing worldwide due to the growing awareness of the detrimental effects of synthetic and chemical products on the skin. A paradigm shift towards natural products as synthetic chemicals in cosmetics cause skin irritation, rashes, and allergies. Hence, natural additives were becoming the choice of most consumers worldwide and prompted the incorporation of gelatin, carrageenan, xanthan gum, and others due to their thickening, gelling, and water-binding properties of various cosmetics and personal care products. They are highly compatible and chemically stable, making them an ideal ingredient for personal care products such as body wash, toothpaste, lotions, and others.

According to the Ministry of Foreign Affairs, Europe’s natural cosmetics market value stood at USD 4.11 billion in 2018 and grew faster in the global cosmetics market. Thus, it is anticipated to fuel the market growth during the forecast period.

DRIVING FACTORS

Increasing Consumption of Convenience Foods Worldwide to Spur Demand

The growing consumption and demand for convenience foods directly impact the increased utilization of hydrocolloids in these products to improve shelf-life, quality, and other factors. It enhances the viscosity and improves the textural properties of various food products such as processed meat, gravies, and sauces. The processed food industry is influenced by the demand for ready-to-eat products, owing to the proactive lifestyles of consumers. According to a global events company, Montgomery Group, 2020, the U.K. food-to-go sector is likely to reach USD 31.6 billion by 2024 due to the ease of utilization and consumption of convenience foods.

Consumers are willingly spending on such products as they are easily available and less time-consuming. Such factors have led to the increased incorporation of the product in processed foods by the manufacturers to suffice the growing demands.

Increasing Popularity of Clean-label Additives to Drive Market Growth

The exponential growth in natural and clean-label food consumption across the food and beverages industry due to its growing awareness has influenced the demand for hydrocolloids. Moreover, this has led to the increasing reliance on natural fibres and gums for functional properties, stability, safety, and quality of food products. According to the American Oil Chemists' Society Journal of 2015, hydrocolloids, apart from imparting textural properties, also enhance the nutritional properties of the food as they contain nearly 60-90% of dietary fibres.

Processed foods with nutritional and potential health benefits are witnessing a surge in demand due to their additional sensory properties and convenience, which is expected to impact the global hydrocolloids market growth positively.

RESTRAINING FACTORS

 Stringent Government Regulations and Operational Delays to Hinder Growth

Numerous government regulatory bodies are closely observing the utilization of hydrocolloids in various food products. Regulatory bodies such as the United States Food and Drug Administration (USFDA), European Parliament and Council, World Health Organization (WHO), Food and Agriculture Organization Expert Committee on Food Additives, and others strictly regulate food safety. They control and set guidelines on the amount of direct or indirect utilization of food and beverages.

For instance, in April 2016, the Food and Drug Administration (FDA) prohibited the utilization of certain cattle materials due to the potential risk of bovine spongiform encephalopathy (BSE) in human food, dietary supplements, and cosmetic products. Thus negatively impacting gelatin production and its utilization in the region. The manufacturers were bound to clarify and declare that the raw materials used were inspected and safe for human consumption. Thus, receiving regulatory approval for new products becomes a long and expensive procedure that results in operational delays. This is likely to pose a restraining factor in market growth.

HYDROCOLLOIDS MARKET SEGMENTATION ANALYSIS

By Type Analysis

Gelatin to Hold Major Market Share

Based on type, gelatin holds the major share in the market due to its broad range of pharmaceutical products, such as wound dressing and tablet formulations. It is diversely used in food products as a clarifying agent in desserts, candies, jellies, ice creams, etc. On the other hand, it is an essential protein source and effectively replaces carbohydrates and fats in food products. Furthermore, its utilization in developing diet products without affecting their flavor and textural properties influences its demand from processors.

Guar gum, a poly galactomannan, is utilized to prepare low-glycemic index food products and prepare biodegradable films for food packaging and flavor encapsulation applications. It is also used in paper manufacturing, pharmaceuticals, and the cosmetics industry to preserve water-retention properties. Thus, its multifunctional properties increase its incorporation in various end-use applications.

Xanthan gum is extensively utilized in various food products to improve their texture, flavor, consistency, and shelf life. In addition to this, it prevents food and cosmetic products from separating. Due to such attributes, it is likely to account for the third-largest share of the market.

Carrageenan is a polysaccharide extracted from red seaweed widely utilized in the pharmaceutical, food, and cosmetic industries for its gelling and thickening properties. It is used as an inactive excipient in tablets and is regarded as a vegan substitute for animal-derived gelatins.

By Source Analysis

Animal to Emerge as the Most Utilized Source for Production

Based on the source, the market is segmented into microbial, animal, seaweed, and others.

The animal source segment is likely to emerge as the most widely used source due to the abundant availability of animal by-products as raw material for processing hydrocolloids. Skin, bones, and hides of animals such as cows, pigs, and poultry are utilized for its manufacturing. It is the most preferred source of choice as it promotes the full utilization of animals that were primarily raised for meat, thereby contributing to zero waste generation. Nowadays, manufacturers are embarking upon manufacturing products that ensure full traceability and support animal welfare, which helps deliver safe products, thus offering lucrative opportunities for the segment to grow.

In recent years, seaweed has emerged as a valuable hydrocolloid source due to its functional properties and importance in food, biotechnology, and medicinal industries, thereby paving the way for segmental growth in the forthcoming years.

Microbial hydrocolloids such as xanthan gum, guar gum, gellan gum, and others are widely adopted as thickening agents in food products and culture media for experiments. They are incorporated in plant-based products such as soy milk as an emulsifier for obtaining the organoleptic properties of dairy products. Agar is used as a laxative, appetite suppressant, and thickener in condiments, while pectin is used as a thickener in baking and cooking.

By Application Analysis

Wide Utilization in the Food Industry to Lead the Application Segment  

Bakery, confectionery, condiments, and beverages are common applications where food processors use hydrocolloid ingredients as coating materials to reformulate their functional properties. They impart appealing texture to the food products, stabilize flavors, stabilize emulsions, and provide structure to reduce sugar-beverages.

The rheology control and water-binding ability have led to an impressive demand for hydrocolloids from the pharmaceutical industry. It also helps provide attractive features such as regulating the flow behavior and imparting stickiness to the oral formulations, which are the factors anticipated to fuel the product demand further in the industry.

The cosmetics industry extensively utilizes hydrocolloid ingredients in various water-based applications for manufacturing deodorants, sunscreens, toothpaste, and others as viscosity control agents. Its thickening and water-binding properties are witnessing an upsurge in its utilization, which is likely to propel market demand in the forthcoming years.

REGIONAL INSIGHTS

Asia Pacific market stood at USD 3.44 billion in 2019 and is anticipated to remain at the forefront during the forecast period. The rising demand for processed foods and fast foods is anticipated to propel its demand in the region. The functional and clean-label perspective of the product has led to its utilization as a stabilizing and texturizing ingredient and its adoption as the ingredient for many food and beverage processors. The rising population and increasing demand for clean-label and natural food ingredients such as stabilizers and thickening agents have increased the demand for hydrocolloids. Moreover, hydrocolloid manufacturing bases in countries such as Thailand, India, China, and Indonesia contribute to regional growth.

China Hydrocolloids Market Share, By Application, 2019

The market in North America is anticipated to hold the second-largest share in terms of revenue during the forecast period. The consumer demand for low-calorie food products has influenced manufacturers to incorporate the product in various processed foods. The trend of consuming fortified convenience food products has fuelled the demand for such products in the region.

Countries like the U.K., Russia, Germany, and France are among the major hydrocolloids in Europe. Further, the food industry's growth and extensive utilization of natural ingredients in food products are likely to drive the regional market.

The market in South America is mainly driven due to its incorporation in the food industry as a clean-label food additive. The demand for such natural and safe food additives is expected to impetus its demand in the region.

In the Middle East and Africa, the inclination towards ready-to-eat food products and convenience food is increasing, which is likely to fuel the region's hydrocolloid demand.

KEY INDUSTRY PLAYERS

 Companies Focus on Innovative Product Launches for Broadening their Portfolios

The market is consolidated with the presence of several prominent global players. The increasing popularity of the product as a clean-label additive has significantly led to its increase in demand. Companies such as Koninklijke DSM N.V., Cargill, Incorporated, Archer-Daniels-Midland Company, DuPont de Nemours, Inc., and Kerry Group plc are concentrating on new product launches and strategic expansions of their business for portfolio broadening and meeting the demands. For instance, in September 2019, TIC Gums, Inc. launched Ticaloid PRO 122 RD, a hydrocolloid blend for incorporating ice cream and ready-to-drink beverages to meet the keto trend.

LIST OF KEY MARKET PLAYERS PROFILED IN THE HYDROCOLLOIDS MARKET:

• Kerry Group plc (Tralee, Ireland)


• Koninklijke DSM N.V. (Heerlen, Netherlands)


• Cargill, Incorporated (Minnesota, United States)


• Archer-Daniels-Midland Company (Illinois, United States)


• DuPont de Nemours, Inc. (Delaware, United States)


• Ashland Global Holdings Inc. (Delaware, United States)


• J.M. Huber Corporation (New Jersey, United States)


• W Hydrocolloids, Inc. (Philippines)


• Ingredion, Incorporated (Illinois, United States)


• Tate & Lyle plc (London, United Kingdom)

KEY INDUSTRY DEVELOPMENTS:

• In July 2021, Cargill Inc., an American privately held global food corporation, announced that it is investing $45 million to add soluble fibers to its European portfolio of sweeteners, texturizers, and starches in Poland.


• In July 2021, W Hydrocolloids, Inc., the leading global carrageenan supplier, introduced two new products - Ricogel 88150 for food applications marmalade, yogurt, and dulce de leche and Ricogel 84668 for plant-based burgers.


• In February 2021, Cargill Inc. introduced a new label-friendly WavePure seaweed powder for food manufacturers. The product is obtained without chemical modification and produced from native seaweed. Cargill is the first to make large, commercial-scale quantities of this versatile ingredient available to its European customers.

REPORT COVERAGE

The market research report provides qualitative and quantitative insights into the market. It also offers a detailed analysis of the market size and growth rate for all possible market segments. Various key insights are an overview of related markets, recent industry developments such as mergers & acquisitions, the regulatory scenario in critical countries, and key industry trends.

Report Scope & Segmentation