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A Detailed Analysis of the Algae-Based Food Additive Market Based on Increasing Consumer Demand for Sustainable and Plant-Based Ingredients in the Food Industry
The global algae-based food additive market is forecast to expand at a CAGR of 8.8% and thereby increase from a value of US$0.19 Bn in 2023 to US$0.35 Bn by the end of 2030.
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Attributes |
Key Insights |
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Algae-based Food Additive Market Size (2023E) |
US$0.19 Bn |
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Projected Market Value (2030F) |
US$0.35 Bn |
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Global Market Growth Rate (CAGR 2023 to 2030) |
8.8% |
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Historical Market Growth Rate (CAGR 2018 to 2022) |
8.3% |
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Revenue Share of Top Four Countries (2022E) |
46% |
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Food additives made from different kinds of algae, which are photosynthetic organisms that live in aquatic environments, including lakes, ponds, and oceans, are referred to as "algae-based food additives." They are divided into three families: alginates from brown algae, agars, and carrageenans from red algae. Rich in proteins, vitamins, carbs, fats, minerals, and bioactive substances, algae-based food additives are useful for a variety of uses in food, frozen desserts & dairy products, and beverages. Additionally, their main functions are stabilization, emulsification, and thickening; nevertheless, these days, their natural source is a big plus.
Growing emphasis on plant-based and sustainable alternatives, motivated by customer demand for eco-friendly products and increased environmental consciousness, is driving the dynamic landscape of the algae-based food additive sector. Moreover, the industry is seeing a boom in R&D as companies investigate novel uses and formulations of algae-based additives across a range of sectors, such as personal care, nutraceuticals, and food and beverage. In addition, algae-based food additives are becoming more widely used as customers want natural and transparent components in the foods they eat, thanks to the growing popularity of clean-label products.
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Get a Customized VersionIncreasing Health Benefits of Algae-Based Food Additives
Increased demand for additives made from algae is predicted due to a growing understanding of the health advantages associated with these products. The exceptional health benefits of algae-based food additives, a veritable nutritional powerhouse rich in vitamins and minerals, have come to light. Supplements and natural, nutrient-rich food sources are becoming more popular as the emphasis on wellness and preventive healthcare has grown. Spirulina and carrageenan are two examples of algae-based food additive products that have been shown to improve immune system performance, reduce cholesterol, and have anti-inflammatory properties. In addition, algae's capacity to flourish in harsh environments with little resource inputs is an added benefit, particularly in light of consumers' increasing awareness of environmentally friendly products. Furthermore, a wide range of consumers are served by the variety of algae-based food additive products, which may be used for anything from food and beverages to cosmetics, biofuel, and dietary supplements, hence driving increased demand for them worldwide. Therefore, the demand for algae-based food additives is expected to rise globally as health-conscious consumers continue to look for natural, sustainable, and nutrient-dense food options.
High Setup Expenses for the Algae Production System
The demand for algae-based food additives is predicted to decline internationally due in large part to the high setup expenses of the algae production system. Establishing an infrastructure for algae cultivation, which includes land, water bodies, and specialized equipment, requires a substantial initial investment. The significant financial obstacle frequently deters small and medium-sized enterprises from joining the market. Additionally, maintaining algae farms raises operating expenses because it requires a large amount of committed labor and resources. The consumer will unavoidably pay more for algal items at retail since these costs are passed on to them. Potential clients may be turned off by this, especially in price-sensitive regions, which would lower demand worldwide. Furthermore, the high setup costs foster a climate that is adverse to experimentation and innovation, both of which are essential for expanding the uses of algae-based food additives. As a result, pricing and accessibility provide serious obstacles that exacerbate the drop in demand.
Growing Need for Plant-based Products
The increasing demand for plant-based products is expected to fuel a considerable portion of the projected increase in the global market for algae-based food additives in the upcoming years. Due to a rising understanding of the health advantages of plant-based diets and the negative environmental effects of animal-based products, consumers around the world are moving more and more toward these diets. Because algae are an abundant supply of plant-based products, they are in a good position to meet this expanding demand. Furthermore, algae-based food additives are becoming more popular as a healthy substitute for conventional protein sources since they are rich in vitamins, antioxidants, and vital amino acids. Algal farming is also attractive because it is sustainable. Algae may develop in a variety of conditions, including saltwater and wastewater, and they do so quickly and with little resource usage. Because of this, the manufacturing of algae-based food additives is sustainable both in terms of the environment and nutrition.
Regulatory Barriers Affecting Products Made from Algae-based Food Additives
Throughout the projected period, regulatory obstacles to the use of algae-based food additives in food and medicinal goods will impede the market's expansion. Safety concerns or a lack of regulatory permission could be the cause of this. For instance, in June 2021, the US Food and Drug Administration—a federal agency with its headquarters in the US—stated that it works with businesses that gather and utilize blue-green algae to make sure they abide by FDA laws, particularly those pertaining to manufacturing, and that the products they produce are safe. Dietary supplements and other foods deemed adulterated by the FDA because they contain dangerously high quantities of pollutants, like microcystins, are subject to regulation. Consequently, the market expansion for algae-based food additives is being impeded by regulatory obstacles regarding the use of algae-based substances in food and pharmaceutical products.
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Rising Demand from Dietary Supplements and Nutraceuticals in South Asia & Oceania will Boost its Expansion
South Asia & Oceania algae-based food additive market is expected to grow at a significant rate over the forecast period. Oils like omega-3 are utilized more often in dietary supplements and nutraceutical items because customers are becoming more health-conscious, which creates a market for food additives made of algae. Furthermore, one of China's main sources of power is its vast infrastructure for algae cultivation, which surpasses that of many other nations. Due to this strong basis, it has been able to develop cutting-edge cultivation and extraction techniques. Significant investments in technology and research are anticipated to support this.
The growing customer desire for natural, wholesome, and sustainable food products is driving the rapid expansion of the algae-based food additive market. Algae are an effective and natural replacement for industrial additives due to their plentiful supply of essential lipids, minerals, vitamins, and proteins. Moreover, the growing consumer preference for natural and clean-label products has further accelerated this market's growth trajectory. Demand would rise as a result of their greater understanding of how conventional agriculture affects the environment. Algae extracts have the potential to boost growth by naturally improving the color, flavor, and nutritional content of snacks, beverages, and other processed foods. Furthermore, new advances in the technologies for growing and processing algae have been crucial in increasing the use of algal-based additives in several food industry sectors. However, a number of problems need to be fixed before the market for food additives made from algae can grow to its full potential.
Supply-side Dynamics
The supply of the algae-based food additive has been rising rapidly in recent years, indicating a growing desire among consumers for nutrient-dense, organic, and sustainable food options. The availability of additives derived from algae has increased due in large part to advancements in processing and production techniques, which has raised both supply and demand. Furthermore, the advancements have not only improved the efficiency of the supply chain but also raised the bar for the quality and safety of products made from algae. Moreover, as consumer preferences shift toward healthier, plant-based alternatives, the market for algae-based food additives is predicted to grow quickly. A contributing factor to this shift is people's growing awareness of the environmental effect of conventional farming practices.
Which Product Type is Expected to Benefit the Most from Revenue Generation?
Growth of Carrageenan Category due to its Antiviral and Antibacterial Properties
The carrageenan category dominated the algae-based food additive market in 2022. The ingredient is widely recognized for being used in foods with low nutritional value as a thickening agent. It is well known in the pharmaceutical business to treat a wide range of ailments, such as tuberculosis, bronchitis, common colds, coughs, and other digestive issues. Carrageenan's growing popularity due to its antiviral and antibacterial properties would further increase product demand over the projected timeframe. Moreover, the spirulina category is anticipated to grow at a significant rate over the forecast period. Spirulina is considered a superfood because of its high protein and mineral content. Because of its high content of vitamins, antioxidants, and minerals, it is a popular element in functional meals, nutritional supplements, and nutraceuticals. It is not only readily digested and anti-inflammatory, but it also benefits the immune system, heart health, and weight loss.
Which Source Will Be Targeted the Most for Sales?
Rising Demand for Clean-label Food will Boost the Growth of Red Algae Category
The red algae category dominated the algae-based food additive market in 2022. In the market for algae-based food additives, red algae have established themselves as the main supplier. This pre-eminence is fueled by a combination of unique advantages that make them stand out. Their inherent abundance and broad accessibility in aquatic habitats is one of the important aspects. Additionally, red algae will become increasingly necessary due to the rising demand for sustainable and clean-label food items. Moreover, the green algae category will grow at a substantial rate in the forecast period. Some types of green algae are well-known for possessing high levels of the pigment beta-carotene, which the body uses to produce vitamin A. It is commonly used in the food and beverage sectors as a natural colorant. Due to its antioxidant properties, it is also utilized in dietary supplements. Because of its high lipid content and its use in the cosmetic business as an anti-aging agent, it is also utilized in the production of biofuels.
Which Functionality Are the Most Sales-focused?
Thickening Category to Widen Footprint Due to Increasing Inclination of Consumers Towards Meals with Improved Sensory Qualities
In 2022, the thickening category led the market. The ability to thicken food composition is crucial and plays a key role in the market for algae-based food additives. These additions are made from algae and have been shown to be very effective in enhancing texture & consistency in a wide range of food products. Additionally, the market is driven by consumers' growing preference for foods with enhanced sensory aspects. The thickening functionality is expected to remain prominent and have a significant impact on the direction of innovation and growth in the food business. On the other hand, throughout the projected period, the enhancing texture segment is expected to increase significantly. This is mostly because texture enhancers are added to a variety of food and drink goods to improve their color, texture, and flavor, which draws people into foods with flavor. Furthermore, in order to promote food product sales and accelerate market expansion, a number of firms are also utilizing them as texture enhancers.
Which Application will Contribute to the Most in Market Revenue?
Convenience Food & Snacks Category to Dominate Sales due to its Functional Qualities and Nutritional Benefits
The convenience food & snacks category dominated the market in 2022. Algae-based food additives have been included in the convenience food industry because of their functional qualities and nutritional benefits, which have been driven by customers' desire for natural and sustainable ingredients. Furthermore, it is anticipated that in the upcoming years, the growing consumer demand for plant-based and vegan food items will support the market's growth.
Moreover, the confectionery & bakery category held a significant share in the market. Emulsifiers and enzymes are highly sought after to improve the quality of baking and confectionery goods. Dietary fibers and sweetness are also added in large quantities; these additions are crucial for giving the goods a pleasant flavor. Moreover, large manufacturers in the confectionery and bakery industry are developing new items that will improve their quality and productivity.
High Adoption from Food & Beverage Sector in North America to Fuel Growth Market
In the forecast period, North America is anticipated to maintain its dominant position in the algae-based food additive market. The developing industries of food and beverage, nutraceuticals, pharmaceuticals, and dietary supplements have greatly influenced the growth of the North American market. Another reason that the market for items made from algae is expected to grow is the country's growing population. Additionally, there is a strong market for novel and natural ingredients in the US food and beverage sector. Food makers have been using algae-based food additives more and more because of their beneficial qualities and clean label appeal. They aim to satisfy the growing demand from customers for sustainable and healthier products.
The competitive landscape in the market for food additives based on algae is active and diverse. Prominent companies such as Aliga Microalga, Corbi, Cargil, KIMI, Algama Foods, and others are concentrating on R&D, environmentally friendly sourcing, and novel formulations. Important businesses also prioritize environmental certifications for their products and address the growing need for natural and sustainable components. For instance, leading food and agribusiness company Cargill uses its wide network and well-established presence in the area to efficiently distribute its food additives made of algae. They supply beta-carotene, alginates, and carrageenan, which are essential components of many Asian culinary products. Cargill's robust connections with regional food producers and distributors guarantee effective product distribution and accessibility across the area. Furthermore, they prioritize quality, innovation, and evolving client preferences in an effort to maintain their market position and take advantage of the rising demand.
New Product Launch
July 2023: The goal of the SUBMARINER Network's AlgaeProBANOS (APB) project is to develop novel, high-value algae-based products for a variety of markets, including human and animal feed, textiles, cosmetics, and more.
Market Impact: Innovative, high-value products derived from algae might be created through the APB initiative, which might expand the applications of algae in a number of fields, including food additives. The need for bio-based and sustainable ingredients in the food industry is expanding, which might fuel market growth for algae-based food additives.
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Details |
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Forecast Period |
2023 to 2030 |
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Historical Data Available for |
2018 to 2022 |
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Market Analysis |
US$ Million for Value |
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Key Regions Covered |
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Key Countries Covered |
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Key Market Segments Covered |
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Key Companies Profiled |
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Report Coverage |
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Customization & Pricing |
Available upon request |
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By Source:
By Functionality:
By Application:
By Region:
The market is anticipated to grow at a CAGR of 8.8% during the projected period.
The algae-based food additive market was valued at US$0.19 billion in 2023.
The U.S. held the largest market share in 2023.
The prominent players in the market are Aliga Microalga, Corbi, Cargil, KIMI, Algama Foods, and others.
The spirulina segment is expected to grow at the fastest growth during the forecast period.
