Annatto Extract Market Analysis, Dynamics, Forecast and Supply Demand 2025

Posted by aartimurkute on July 19th, 2021

Annatto extract, also known as Bixa Orellana, is primarily extracted from the red seeds of the achiote tree. The achiote tree thrives in tropical nations in Latin America and APAC, with Brazil being the largest producer. Annatto extract is widely used as a coloring agent and taste enhancer in the food & beverage industry. The pigment that produces the necessary colors comprise norbixin, bixin, and carotenoids.

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Preference for Organic and Natural Ingredients Boosts Global Annatto Extract Market

The annatto extract market has seen substantial growth over the last few years. Consumers are moving away from synthetic ingredients to natural and organic alternatives. Furthermore, several countries have limited the use of synthetic coloring in foodstuffs sold. As a natural colorant, annatto extract is a direct beneficiary of this. For example – India and Sri Lanka prohibit the use of Fast Red food coloring. The EU permits sixteen synthetic food colorings, while Australia permits only thirteen. An ever-increasing awareness coupled with regulatory action regarding the rampant use of artificial coloring in foodstuffs should propel demand in the annatto extract market for the forecast period.

Widespread Application Across Various Industries Aids Global Annatto Extract Market

Annatto extract is of immense importance in the food & beverage industry and is used in sauces, butter, pasta, cheese, and other snacks. It is even used in the cosmetics and textile industries in soaps, shampoos, lipsticks, and skincare products. The cosmetics segment is projected to account for the most incremental dollar opportunity over the forecast period. Annatto pigment is used as a natural dye in lipsticks, hair color dye, and paint. A noticeable trend is a surge in demand for cosmetics that highlight their organic roots. This should assist growth in the annatto extract market.

European Consumers and Regulators Work in Tandem to Make Continent Lucrative

Europe holds a prominent position in the global food & beverage industry and is on track to lead the annatto extract market for the foreseeable future. European consumers are extremely health-conscious and veganism is in vogue there. In addition, robust regulations regarding synthetic additives generate demand for natural ingredients such as annatto extracts

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Prohibitive Cost Poses Major Challenge in Global Annatto Extract Market

Annatto extracts are only grown in a limited number of countries such as India, Sri Lanka, Brazil, Mexico, and Peru, making them expensive. A lot of end-use industries in developed countries have to resort to imports, and these costs are passed on to the end-consumer. Annatto extract is also prone to color degradation and is less stable when exposed to bright light or high temperatures. In 2016, Europe’s Food Safety Authority announced the use of Annatto B and C extracts in lieu of those used earlier. All these factors are anticipated to slow growth rates in the annatto extract market. 

Key Players in the Annatto Extract Market

Some companies profiled in this report of the annatto extract market are DDW The Color House, Naturex S.A, Sensient Colors LLC, Kalsec Inc, Chr. Hansen Holding A/S, Daxia Ingredientes e aditivos LTDA, WILD Flavors, Givaudan SA, IFC Solutions, and International Flavors & Fragrances Inc. (Frutarom Natural Solutions Ltd).