The Global Natural Extracts Market was estimated at USD 9.92 Bn in 2020 and is expected to grow with a CAGR of 9.5% during the forecast period.
The natural extracts market is majorly growing owing to increasing end-use applications of natural extracts across the globe. This growth is majorly attributed to the multifunctional properties offered by diverse natural ingredients that include natural food flavors and colors. These colors and flavors are widely used in convenience foods, bakeries & confectionery, dairy & frozen desserts, and meat products in the food processing sector. Additionally, natural extracts have wide application in several personal care products such as fragrances, shampoos, body lotions, and many more owing to the natural fragrances offered by the product. Further, plant extracts have wide acceptance in manufacturing several pharmaceuticals and nutraceuticals owing to the presence of higher bioactive components such as phytochemicals that exist in edible fruits, seeds, leaves, and flowers. These phytochemicals offer various health-promoting properties such as antioxidants, anti-inflammatory, hypoglycaemic, anticancer, anti-obesity. Therefore, growing demand from these end-use applications is expected to boost the growth in the natural extracts market.
Moreover, another major factor driving the demand in the natural extracts market is increasing consumer awareness regarding the adverse effects of consuming food & beverages that contain synthetic ingredients. Also, numerous food safety associations and health organizations are prohibiting the use of several artificial flavorings in food and beverages. For instance, in October 2018, the Food and Drug Administration (FDA) in the U.S. has banned the use of seven synthetic flavorings that are associated with cancer. It stated the use of naturally extracted counterparts in place of banned flavors as they are safe for consumption. Hence, consumers across the globe are interested in buying clean label products which offer a wide range of naturally derived ingredients, which is, in turn, driving the demand in the natural extracts industry.
Based on region, the Asia-Pacific region is growing with the fastest CAGR in the natural extracts market and is projected to exhibit high growth during the forecast period. The major factor driving the growth of the natural extract market is the rapidly expanding food and beverage industry in this region. Natural extracts are widely utilized as a natural colorant and flavor in many authentic and ethnic cuisines in the region amidst a tight regulatory grip over synthetic additives. Additionally, strong product demand across several sectors, such as animal feed, nutraceuticals, and cosmetics among many others is also prominently driving the market in this region. Further, the growing standard of living along with rising health consciousness among people in this region is also positively influencing the demand market demand.
The key market players in the Natural Extracts industry are: