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Clean Label Ingredients Market size is $61.48Bn in 2019, growing at a CAGR of 6.76% during the forecast period 2020-2025. Clean Label refers to food products containing natural, familiar, simple ingredients that are easy to recognize, understand, and pronounce, with no artificial ingredients or synthetic chemicals. This market is driven by rise in clean label product launches, fueled by increase in consumer demand for clean label food products to drive consumption of clean label ingredients and health issues associated with artificial food additives and food safety incidents. Clean-label ingredients are consumer-friendly ingredients, which are natural, organic, non-GMO, and very minimally processed. Clean label products are 100% natural, non-GMO, and organic. The demand for natural ingredients is growing, owing to the increasing health concerns of the customers, regarding the adverse health effects of artificial ingredients. Clean label encompasses a broad range of concepts from transparency, all-natural, organic, non-GMO, free-form to locally grown.
By Source – Segment Analysis
In 2019, Bakery segment dominated the Clean Label Ingredients Market in terms of revenue. Clean label is a growing trend in the baking industry that is largely influenced by consumers looking for alternative ways to consume their favorite baked goods. They are demanding healthier, simpler and more familiar products. Baking clean label products requires different ingredients, formulations, processes and quality control approaches. It helps reduce constipation, diverticulosis and risk of chronic diseases. The rising popularity of bakery cereals as a healthy and on the go convenient food solution drives the consumption of these products especially in the urban areas is abetting towards the growth of the market.
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Geography – Segment Analysis
In 2019, the North America region dominated Clean Label Ingredients Market in terms of revenue owing to the broad presence of customer based and high adoption rate innovative labeling products. The prioritization in the production of food and beverages by the Government in this region for the development of the farming aids to the market’s growth. Government has taken initiatives to promote technological advancements in this region are key factors in the growth of the Clean Label Ingredients Market. The increase in demand for convenience goods with clean labels is also a factor boosting the market. Asia-Pacific is estimated to record the fastest growth rate during the forecast period 2020-2025.
Drivers – Clean Label Ingredients Market
Increase of Health-Conscious People
Increase in the number of health-conscious consumers drive the Clean Label Ingredients Market owing towards the demand for organic, fresh and exotic products. This is partly due to increased importance placed on a healthier lifestyle, leading consumers to look for healthier options without the added time of preparing from fresh like healthy ready meals, beverages and others. Consumers demand for high quality products with no changes in nutritional, mineral and calcium properties. Consumers tend to pay more for natural food and confectionery products, and naturally flavored confections provide a higher value proposition for the product and brand.
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Challenges – Clean Label Ingredients Market
High Cost of Machines for Labeling
The lack of proficient organization for system and growing stringent government policy and regulation toward market growth is restraining growth of the market. The high capital investments for equipment and strict regulations for the consumer safety are restraining the worldwide growth of the market. Lack of sufficient storage facilities and improper distribution and limited storage and transportation is hindering the market’s growth.
Clean Label Ingredients Industry Outlook
Product Launches was the key strategy of the players in the Clean Label Ingredients Industry. Clean Label Ingredients top 10 companies include Archer Daniels Midland Company, Brisan, Cargill Corporation, Chr. Hansen A/S, Corbion N.V., E.I. Dupont De Nemours & Company, Groupe Limagrain, Ingredion Incorporated, Kerry Group PLC and Koninklijke DSM N.V.
Acquisitions/Product Launches
In February 2020, Cargill Corporation launches plant based patty and ground products for maintaining consistency in the taste of costumers and by providing high-quality protein. This helps in attracting many consumers and thus aids to its productivity of sales.
In May 2018, Koninklijke DSM N.V. collaborated with Foote, Cone & Belding, FCB. This collaboration will help in increasing its global presence.
Key Takeaways
The growing consumer awareness towards product labeling is likely to be the major driving factor for the market’s growth.
Increase in demand for organic and fresh products is set to propel the growth of the market.
An increase in the demand for nutritional and quality food due to rise in urbanization, and increase in working population is anticipated to drive the market’s growth.
Asia-Pacific region is estimated to record the fastest growth rate during the forecast period (2020-2025).
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