Carmine: Challenges and Opportunities Ahead

Posted by Nicky Arora on November 20th, 2019

The global Carmine Market size is expected to reach USD 26.0 million by 2025, according to a new report by Grand View Research, Inc. It is anticipated to expand at a 5.8% CAGR in terms of revenue over the forecast period. Increasing demand from food and beverage industry owing to its unique red color is the primary market driver. Unavailability of substitutes is expected to drive product demand in the forthcoming years.

Rising consumer awareness regarding harmful effects of synthetic food colors has resulted in increasing demand for carmine in bakery and confectionery products. In addition, use of natural colors as substitutes to synthetic red in novel beverages is expected to drive market growth over the forecast period.

Growth of food and beverage industry in developing economies, in light of increased domestic consumption, is anticipated to be a major factor driving the carmine market. Rising preference for natural food colors owing to their health benefits is expected to drive product demand from food and beverage manufacturers over the next eight years.

Factors such as raw material supply, price, and consumer demand, and regulatory trends widely influence the market for carmine. The insect harvesting process used for the production of carmine is laborious and requires a span of minimum three months. This results in tight raw material supply. As a result, the bargaining power of suppliers is high in the industry.

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Further key findings from the report suggest:

• Bakery and confectionery accounted for around 22.7% of revenue share in 2017 owing to increasing usage in production of pastries, cupcakes, muffins, specialty baked goods, and candies
• Carmine in meat products is expected to witness a 4.1% CAGR from 2018 to 2025 in terms of revenue owing to development of new formulations with improved heat stability useful in meat preparations at high temperatures
• Europe accounted for a significant revenue share of carmine market in 2017 on account of demand from producers of novel beverages such as juices, health drinks, and dairy and frozen products including ice creams and yogurts
• U.S. is expected to expand at a steady CAGR in terms of revenue owing to rising adoption in ready-to-eat foods with presence of major players such as Nestle, Kellogg’s, H.J Heinz, and ConAgra
• Companies catering to the international market distribute carmine through dedicated direct, indirect, and online distribution channels. Raw material suppliers play a major role in enabling availability of cochineal bugs as production is concentrated in Peru.