Annatto Market Size, Growth, and Trends by 2032

The outbreak of COVID-19 posed major challenges to the annatto industry due to supply chain interruptions and temporary manufacturing shutdowns. Restrictions on transportation and rising logistics costs affected both production and distribution activities. Additionally, the decline in demand from the foodservice sector—a major consumer of natural colorants—negatively impacted sales. Nevertheless, with global logistics stabilizing and the demand for packaged and processed foods rebounding, the market is anticipated to recover and expand consistently in the coming years.

Information Source: https://www.fortunebusinessinsights.com/industry-reports/annatto-market-101592 

Market Trends

Rising Demand for Clean-Label Ingredients Driving Growth

The growing consumer preference for clean-label and naturally derived products has emerged as a major growth driver. Modern consumers are increasingly choosing non-GMO, minimally processed, and eco-friendly ingredients. Compounds such as bixin are gaining strong market traction due to their natural origin and adaptability across applications. This shift is evident in Europe, where the annatto market increased from USD 67.3 million in 2018 to USD 70.8 million in 2019, highlighting the steady transition toward natural colorants.

Segmentation Insights

Among the various product types, solvent-extracted and emulsified annatto dominate the market, primarily due to their widespread use in dairy products. The ingredient is classified as Generally Recognized as Safe (GRAS) and approved by leading regulatory agencies including the FDA, EU, and WHO.

In 2019, the food industry accounted for over 71.6% of total annatto consumption, with strong demand stemming from dairy, bakery, and beverage applications. Furthermore, many food manufacturers are reformulating their products using natural colorants to improve appearance, taste, and consumer appeal.

Regional Insights

Annatto ranks as the second most commonly used natural colorant worldwide, following caramel. The increasing demand for bixin and norbixin continues to create lucrative growth opportunities across regions.

• Europe: Expected to retain market leadership throughout the forecast period.

• North America: The U.S. remains a key market, driven by the shift toward clean-label and natural foods.

• Asia Pacific: Witnessing rapid expansion due to urbanization, population growth, and increasing food consumption.

• South America: Countries such as Peru, Brazil, Ecuador, and Bolivia act as major production hubs due to abundant raw materials and high profitability.

Key Market Players

• Givaudan SA (Switzerland)

• Archer Daniels Midland Company (U.S.)

• Chr. Hansen Holding A/S (U.S.)

• Sensient Technologies Corporation (U.S.)

• Kalsec Inc. (U.S.)

• Döhler Group (Germany)

• Dairy Connection, Inc. (U.S.)

• IFC Solutions (U.S.)

• Biocon Colors (India)

• Aarkay Food Products Ltd. (India)

Get Sample PDF Brochure: https://www.fortunebusinessinsights.com/enquiry/request-sample-pdf/annatto-market-101592 

Recent Developments

• March 2020: U.S.-based organic beverage company Suja partnered with Whole Foods Market to launch a new juice line made with natural colorants, including annatto, showcasing the industry’s growing emphasis on clean-label innovation.