South America specialty food ingredient market is projected to witness a CAGR of 3.82% during the forecast period (2020 - 2025).
- The industry for specialty food ingredients essentially thrives on the wider technological and functional benefits that these ingredients confer, in terms of high quality, safety, affordability, nutrition, and deliciousness of the processed food products.
- The preference for certain types of food products is now core to some consumers’ identities, especially in developing economies of South America such that Columbia, Brazil, and others, which is driving the demand of specialty food ingredients.
Key Market Trends
Increase in Consumption of Healthy Food and Beverage
The industry for specialty food ingredients essentially thrives on the wider technological and functional benefits that these ingredients confer, in terms of high quality, safety, affordability, nutrition, and deliciousness of the processed food products.
Processed food products include various categories, such as ready meals, baked foods, breakfast cereals, confectionery, and non-alcoholic beverages. Specialty food ingredients are a vital part of a wide range of processed foods, thereby contributing to competitiveness in the food & beverage industry.
The demand for convenient foods has recorded robust growth in the country's various South American countries such as Brazil, Argentina, Colombia, and others, owing to changing lifestyles and dietary preferences. Specialty ingredients, such as preservatives, emulsifiers, stabilizers, enzyme preparations, and others, enhance the nutritional profile of the packaged food and extend their shelf-life, thereby pushing for higher demands of these specialty food ingredients.Health and wellness, along with the rising preference for better-for-you foods in South American, have brought specialty ingredients to center stage, as they are increasingly customized to cater to wider functionalities and broader applications in the processed food industry.
Increasing Demand for Speciality Ingredients in Brazil
Brazil is the world's fifth-largest and South America’s largest economy. It is the largest country in South America with the highest population, maximum GDP, and the greatest number of trades in South America. Hence, it provides a good opportunity for the ingredient manufacturers to offer their products in-country and establish a good consumer base in the Brazilian market.
Brazil is known for the increasing purchase power of the consumers and an appetite for innovative, safe, and high-quality food products. As the income levels of consumers have increased, the consumption of premium food has also increased.
Brazilian consumers’ interest in high-quality food products has increased the demand for fortified drinks and functional foods, owing to the increasing overweight and obesity rates among the consumers. Moreover, an aging population has a growing interest in attaining wellness through a healthy diet, therefore, it is resulting in the rising demand for specialty food ingredients in Brazil.
South America Specialty Food Ingredient Market is very competitive and fragmented. Implementation of R&D and technological innovations in the country is attracting the key players to expand their footprints in these developing markets and gain a competitive edge over their competitors, by introducing their products proactively in the developing market. For instance, In November 2019, IMCD, Netherlands-based company acquired 100% shares of Colombian specialty distributor Unired Químicas in order to expand its consumer base in the Colombian market.
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