Known and Unknown Adjacencies Impacting the Hydrocolloids Market

Northbrook, IL, USA, 2019-Oct-15 — /EPR Network/ —

The global hydrocolloids market is estimated to be valued at USD 8.8 billion in 2018 and is projected to reach USD 11.4 billion by 2023, at a CAGR of 5.3% during the forecast period. The hydrocolloids market is driven by the rising demand for convenience foods from the food industry and the multifunctionality of hydrocolloids in food & beverage products. However, adherence to international quality standards, regulations regarding food additives such as stabilizers, and fluctuations in raw material prices pose significant threats to the market growth.

Key players in the global hydrocolloids market include Ingredion (US), DowDuPont (US), Cargill (US), Darling Ingredients (US), and Kerry (Ireland).). Mergers & acquisitions and expansions & investments were the core strengths of leading players in the hydrocolloids market. These strategies were adopted by key players to increase their market presence. It also helped them diversify their businesses geographically, strengthen their distribution networks, and enhance their product portfolios. Market leaders such as Ingredion (US), DowDuPont (US), and Cargill (US), are focusing on tapping the potential markets through partnerships, joint ventures & agreements, and mergers & acquisitions.

Ingredion (US) is a major player in the hydrocolloids market. The company sells its hydrocolloids products in over 120 countries at a global level. The company offers hydrocolloids such as agar, sodium alginate, carrageenan, microcrystalline cellulose, cellulose gum, pectin, and xanthan gum under its brand, Coyote. These hydrocolloids are used as stabilizers in the food industry. In 2015, the company acquired Penford Corporation (US), to further expand its presence in the hydrocolloids market. Furthermore, in 2016, the company gave a boost to its hydrocolloids business with the acquisition of the US-based TIC Gums. In 2017, the company invested over USD 10.0 million to expand in the hydrocolloids market in Charleston County (US).

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DowDuPont (US), is one of the leading players in the hydrocolloids market. The company sells its hydrocolloids products in over 90 countries at a global level. The company offers hydrocolloids such as carrageenan, microcrystalline cellulose, cellulose gum, guar gum, locust bean gum, microcrystalline cellulose (MCC), and pectin for applications in bakery, dairy and ice cream, meat and savory, culinary, and beverage. In 2017, the company acquired FMC’s (US) health and nutrition business. This acquisition helped the company for expanding its product portfolio and its hydrocolloids business in the European and Asian regions. In 2016, the company launched a range of hydrocolloids, under the brand, GRINDSTED JU System. It expanded its presence in the South Asian hydrocolloids market through this launch.

Fluctuations in prices of raw materials challenging the growth of the market

Hydrocolloid manufacturers have to face the challenge of an increase in the price of raw materials. The prices of raw materials for different hydrocolloids have been fluctuating, resulting in uncertainty in the market. The prices of different raw materials affect the price of the food hydrocolloids, which in turn impacts the price of the end food product. Hydrocolloids are also obtained from natural sources. Changes in climatic conditions have resulted in the shortage of raw materials, which in turn, has increased their prices. For instance, in the case of hydrocolloids, prices of the E.cottonii seaweed from Asia experienced a decline due to a shortage of production. The price of guar gum is increasing due to poor crop harvests in Asian countries such as India and Pakistan and the rise in demand from oilfields as guar gum is also used as a hydrocolloid in oil.

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As companies try to pass on the cost to customers, it results in a price increase and as substitutes are available in the market, customers can switch to them. This restricts the growth of this market.