Increasing Demand for Bakery Products, Alcoholic Beverages, and Ethanol to Drive Yeast Market Growth in Coming Years

Northbrook, IL, USA, 2019-Nov-4 — /EPR Network/ —

The yeast market is projected to reach a value of USD 5.40 billion by 2022, at a CAGR of 9.0% from 2017 to 2022. The market is driven by factors such as the growth of the bakery industry, increasing demand for convenience food, and increasing demand for bioethanol as a fuel. Yeast, on the basis of type, is segmented into baker’s yeast, brewer’s yeast, wine yeast, bioethanol yeast, and feed yeast. Based on application, the market is broadly segmented into food and feed. The major forms of yeast are fresh yeast, dry yeast, and instant yeast. Specialty yeast, by type, is segmented into yeast extracts, yeast autolysates, and other yeast derivatives. On the basis of region, the market has been segmented into North America, Europe, Asia-Pacific, and the Rest of the World (RoW).

How is the increasing preference for MSG alternatives creating profitable growth opportunities for manufacturers in the yeast market?

MSG is the sodium salt of a glutamic acid, which is used as a food additive in various processed foods to enhance the natural flavor of foods. Various studies have shown that prolonged consumption of MSG results in several health complications, some of which include obesity, weakness and fatigue, and frequent headaches and numbness. Growing awareness about the side effects of MSG has resulted in an increased demand for safer alternatives. Yeast extracts contain hydrolyzed properties and amino acids and can hence be used to add flavor in processed foods and other savory applications; yeast is hence a suitable alternative to MSG. And, with more campaigns against the use of MSGs in food, the market for yeast has high growth potential in this function.

How is the scarcity of raw materials and market saturation in various countries posing challenges for manufacturers in the yeast market?

Market saturation restricts the market growth, owing to which manufacturers are compelled to look for new opportunities in developing economies. However, this leads to an increase in costs involved in investments, expansions, and establishment of new distribution networks, which narrows their profit margins.

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Molasses is one of the essential raw materials used for the production of yeast, especially baker’s yeast. Cane and beet molasses are the main sources of carbon dioxide production in yeast production. However, scarcity of molasses acts as a market challenge, thus resulting in increased prices of yeast, especially in North America and Europe, where the molasses production does not meet the requirement for yeast production. The restrictions on sugar trade in Europe have further reduced the availability of molasses in this region. As molasses is a key source, its scarcity poses a challenge for the growth momentum of the market, despite innovations of other raw materials. The innovations will have to be as cost-efficient and have greater availability to bridge the gap between the demand from regions and industries that depend on molasses and the supply of yeast thereof.

On the basis of type, the baker’s yeast segment accounted for the largest market size in 2016. However, the bioethanol segment is projected to grow at the highest CAGR during the forecast period. Due to the increasing awareness about the use of bioethanol, many countries have already accepted bioethanol as an alternative to gasoline, owing to its low-carbon emission and environment-friendly nature. The demand for baker’s yeast is increasing in the developing economies due to the increasing trend of consumption of processed food items and special bakery foods. The major application areas for baker’s yeast are bread, bread rolls, pizza base, cracker biscuits, sweet bread, burger, and buns for fermentation of the dough.

On the basis of application, the food segment is expected to witness the fastest growth in the yeast application segment. It accounted for the largest market share in 2016. The food segment is further categorized into bakery, alcoholic beverages, non-alcoholic beverages, prepared food, and others which include nutritional supplements and snacks. The demand for baked products and non-alcoholic beverages has increased, which in turn drives the demand for yeast in the food segment.

On the basis of form, the fresh yeast segment is expected to witness the highest growth rate during the forecast period.  Fresh yeast is the most commonly used yeast form in various food products such as bread and biscuits. Thus, it is expected to grow in the near future owing to the awareness of the usage of fresh yeast. It is used in bakery products owing to its favorable rising qualities and ability to enhance flavor & taste in bread, croissants, and Danish pastries.

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The Asia-Pacific market is expected to witness the fastest growth during the forecast period. The market is mainly driven by China as it has witnessed high growth in the yeast-based products market, and is one of the emerging markets for baker’s yeast. Import of yeasts in the region benefits countries such as New Zealand and Australia. Moreover, the economic improvements in countries such as India and China have increased the demand for yeasts in the region. The Asia-Pacific market is driven by the growing demand for processed food products in developing economies such as India, China, Japan, Australia, and South Korea.

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