The South African food additives market is projected to register a CAGR of 5.4% during the forecast period (2022-2027).
The COVID-19 pandemic disrupted the supply chain and also brought a halt to the production processes due to lockdown and government restrictions. Various studies have depicted that due to export restrictions, the export of food ingredients, including food additives, faced a negative impact of around 40%. However, the overall processed food market showed a positive trend because of the higher dependency on convenience food during the pandemic.
The market is driven by the extensive use of additives in the F&B sector for different functions, including preservatives, flavor enhancers, emulsifiers, sweeteners, and colorants. Also, the rising demand for convenience and packaged foods where additives are used in a higher quantity is further fueling the market growth.
The South African market is growing as it is one of the emerging countries, which is very conscious of health and wellness. The thirst for convenience food is high, which ultimately gives a boost to the food additive market. In processed and packaged foods, ensuring food safety and quality starting from transportation to farm to fork and storage facilities is a major concern. The South African Food Additives Market is expected to witness a CAGR of 6.19% during the forecast period (2020-2025).
Clean labeling has become an important aspect of high-rated consumer demand, emphasizing processed food products. With the increase in health awareness, a majority of the population check for clean labels before buying a product. This rise in demand for clean labels has shifted the focus of manufacturers from synthetic food additives to natural ones. Companies like DuPont and Cargill are focusing on research and development to innovate new products to suit consumer demand. Moreover, the South African beverage and bakery industry are focused on using traditional coloring and flavoring methods, for which the companies have come up with natural alternatives in clean labels.
Beverage companies in South Africa are increasingly focusing on making product lines based on tropical fruits and super fruits. This is driving the growth of the flavored beverage market. Coca-Cola is offering various soft and carbonated drinks in different tropical flavors, such as Fanta Mango. Toni Glass is offering beverages in different berries, ginger, and other exotic flavors. The beverage segment is the largest application segment for stevia. The rise in health concerns related to sugar consumption and a surge in the production cost due to the sugar tax imposed by the South African government are leading to the market penetration of stevia in various soft drinks, juices, teas, and nectars. Companies, such as PepsiCo Inc. and the Coca-Cola Company, started incorporating products in their diet soft drinks and marketed them as drinks with no side effects on consumer health. Coca-Cola offers the only stevia-sweetened Coke under the brand name, Coke Life, and it is considered as Coca-Cola’s response to the rapidly growing natural sweetener trend.
The South African food additives market is fragmented, with fierce competition between global and local players. Acceptance of convenience and package foods in the African region is leading to the demand for food and beverage additives. The major players in the market are Cargill Inc., Tate & Lyle, Archer Daniels Midland Company, DuPont- Danisco, Kerry Inc., etc. The strategies adopted in the food additives industry are in the innovation category under the development of natural food additives and functional food ingredients to meet the changing customer demands.
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The COVID-19 pandemic disrupted the supply chain and also brought a halt to the production processes due to lockdown and government restrictions. Various studies have depicted that due to export restrictions, the export of food ingredients, including food additives, faced a negative impact of around 40%. However, the overall processed food market showed a positive trend because of the higher dependency on convenience food during the pandemic.
The market is driven by the extensive use of additives in the F&B sector for different functions, including preservatives, flavor enhancers, emulsifiers, sweeteners, and colorants. Also, the rising demand for convenience and packaged foods where additives are used in a higher quantity is further fueling the market growth.
The South African market is growing as it is one of the emerging countries, which is very conscious of health and wellness. The thirst for convenience food is high, which ultimately gives a boost to the food additive market. In processed and packaged foods, ensuring food safety and quality starting from transportation to farm to fork and storage facilities is a major concern. The South African Food Additives Market is expected to witness a CAGR of 6.19% during the forecast period (2020-2025).
Key Market Trends
Increasing Consumer Demand for Clean Label Ingredients
Clean labeling has become an important aspect of high-rated consumer demand, emphasizing processed food products. With the increase in health awareness, a majority of the population check for clean labels before buying a product. This rise in demand for clean labels has shifted the focus of manufacturers from synthetic food additives to natural ones. Companies like DuPont and Cargill are focusing on research and development to innovate new products to suit consumer demand. Moreover, the South African beverage and bakery industry are focused on using traditional coloring and flavoring methods, for which the companies have come up with natural alternatives in clean labels.
Beverages Dominates the Food Additive Market
Beverage companies in South Africa are increasingly focusing on making product lines based on tropical fruits and super fruits. This is driving the growth of the flavored beverage market. Coca-Cola is offering various soft and carbonated drinks in different tropical flavors, such as Fanta Mango. Toni Glass is offering beverages in different berries, ginger, and other exotic flavors. The beverage segment is the largest application segment for stevia. The rise in health concerns related to sugar consumption and a surge in the production cost due to the sugar tax imposed by the South African government are leading to the market penetration of stevia in various soft drinks, juices, teas, and nectars. Companies, such as PepsiCo Inc. and the Coca-Cola Company, started incorporating products in their diet soft drinks and marketed them as drinks with no side effects on consumer health. Coca-Cola offers the only stevia-sweetened Coke under the brand name, Coke Life, and it is considered as Coca-Cola’s response to the rapidly growing natural sweetener trend.
Competitive Landscape
The South African food additives market is fragmented, with fierce competition between global and local players. Acceptance of convenience and package foods in the African region is leading to the demand for food and beverage additives. The major players in the market are Cargill Inc., Tate & Lyle, Archer Daniels Midland Company, DuPont- Danisco, Kerry Inc., etc. The strategies adopted in the food additives industry are in the innovation category under the development of natural food additives and functional food ingredients to meet the changing customer demands.
Additional Benefits:
- The market estimate (ME) sheet in Excel format
- 3 months of analyst support
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Table of Contents
1 INTRODUCTION
4 MARKET DYNAMICS
5 MARKET SEGMENTATION
6 COMPETITIVE LANDSCAPE
Companies Mentioned (Partial List)
A selection of companies mentioned in this report includes, but is not limited to:
- Cargill Incorporated
- Kerry Inc.
- Corbion NV
- Tate & Lyle PLC
- Ingredion Incorporated
- Dupont de Nemours Inc.
- Novozymes
- Firmenich SA
- Nicola-J Flavors and Fragrances (Pty) Ltd
- ILLOVO SUGAR AFRICA (PTY) LTD
Methodology
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