South America Food Additives Market - Growth, Trends, and Forecast (2020 - 2025)

The South America food additives market is projected to grow with a CAGR of 5.3% during the forecast period 2020 - 2025.

• The market is primarily driven by the wide range of its application in food and beverage industries for different functioning, such as preservative, flavor enhancer, emulsifier, sweetener, colorant, and many other functions. Also, the rising demand for convenience and packaged foods where additives are used in a higher quantity is further fueling the market growth.
• However stringent environmental regulations like the FDA for additives used directly in processed foods and food-contact substances such as food packaging products are expected to impede the market growth. For instance, regarding the use of preservative and other food additives in Brazil, Article 2 of Decree #2092/1991 states the following: "all foods, condiments, beverages, or their raw material and food additives which are manufactured, fractioned, preserved, transported, sold, or exposed, must comply with CAA requirements. That is, when one of those is imported, CAA requirements will be applied.

Key Market Trends

Rising Demand for Natural Food Flavor & Enhancers in the Region

Latin American countries, such as Argentina and Brazil, are taking action in the battle against obesity with several nations enacting policies designed to curb the consumption of artificial flavors, that add up unnecessary calories in the diet. The flavors, such as Martinique Rum Soaked Pineapple, Guatemalan Coffee Pure Arabica, Dulce de Leche Argentinian Recipe, Brazilian Orange Sorbet, and Spices, which have a high preference in South American countries, especially in Brazil, are also exported to European countries, like the United Kingdom. The companies are replacing their artificial ingredient with an extension in the natural ingredient category with an essence of natural flavorings, acceptable ingredients, like fruit and natural sweeteners in the food and beverage category. For instance, in 2014, Givaudan launched a peanuts collection, which was driven by industry demand for new directions in peanut flavors.

Brazil to Hold the Major Share in the Regional Market

Owing to the large population base with a potential consumer market, Brazil remains a lucrative market for food additives in the South American region. Moreover, the country is experiencing significant development in terms of new product launches and innovations. Major companies are strategizing business expansion in order to increase market penetration and are investing to supplement the production facility in the country. Furthermore, observing an increased inclination of the Brazilian population more towards natural ingredients, the major companies in the market are investing capital in sourcing tools and technologies to upgrade their products to a much reliable and likable category. The companies across the market in Brazil are following clean label consumer-driven initiatives and are investing capital in sponsoring awareness programs and seminars targeting the population to build a sense of reliability on their products, which are expected to decide the fate of companies in the food additives market in the forecast period.

Competitive Landscape

The South America food additive market is fragmented in nature owing to the presence of a large number of regional and domestic players. Emphasis is given on the merger, expansion, acquisition, and partnership of the companies along with new product development as strategic approaches adopted by the leading companies to boost their brand presence among consumers. Key players dominating the country's market include Cargill Incorporated, Givaudan, Corbion NV, Firmenich SA, Ajinomoto Co., Inc., and Palsgaard A/S, among others.

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