Bulk Food Ingredients Market

The global bulk food ingredients market is projected to reach USD 454.6 billion by 2028 from USD 366.7 billion by 2023, at a CAGR of 4.4% during the forecast period in terms of value. The need for packaged ready-to-eat meals like confectionary, biscuits, beverages, and chocolates is one lifestyle element that drives the market for bulk ingredients. The market has been helped by the expansion of food service retail chains and the rise in the number of restaurants and cafés. These businesses buy a substantial amount of food ingredients from wholesalers, including grains, spices, and herbs. The market for bulk food ingredients is expanding due to a variety of factors, including changing lifestyles, the embrace of Western culture, and an expanding labour force. In addition, the preference for tea and coffee over carbonated beverages is anticipated to fuel market expansion. Market participants are releasing several kinds of herbal and ayurvedic teas that are also healthy, raising demand for them in many regions of the world.

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Bulk food Ingredients Market Dynamics

DRIVER : Rise in end-use applications

The demand for products that are rich in nutrients is significantly high in Europe and North America due to the increase in consumer awareness. The consumption of products with an extensive nutritional profile would continue to increase as parents prefer opting for food products—such as grains, oilseeds, and nuts, that are estimated to account for a key share in the bulk ingredients market. These products offer nutrition for healthy child development. End-use applications such as bakery & confectionery, snacks & spreads, ready meals, infant formulas, and dairy products are projected to witness significant growth in the next five years, resulting in increased demand for bulk food ingredients.

Food products are processed for various purposes, including the preparation of safer food products by eliminating harmful microorganisms such as bacteria, enhancing the shelf life of products, and increasing convenience. These bulk food ingredients are available in different end user application industries after being processed. Bulk food ingredients account for a major part of the raw materials required by the food processing industry. Hence, the increase in demand for packaged/processed food products is projected to drive the growth of the bulk food ingredients market.

Restraint: Improper storage management and infrastructure

The challenges faced by the bulk food ingredients processors/wholesalers require them to maximize the available space, manage different storage temperatures, and respond to a high turnover of stock while maintaining hygiene levels and product traceability. The Food and Agricultural Organization (FAO) reported that nearly one-third of all produced foods (1.6 billion tons of edible food) is lost every year across the supply chain, the monetary value of which is nearly USD 936 billion. In developing countries, food products are lost mainly in post-harvest and processing, i.e., by poor practices, technical and technological limitations, labor and financial restrictions, and the lack of proper infrastructure for transportation and storage. The amount of Food Waste in industrialized countries is nearly 222 million tons, which is nearly equal to the total net production in Sub-Saharan African (SSA) countries (230 million tons). In addition, when waste food is thrown into landfills, a substantial portion is converted into greenhouse gas and methane, which has a global warming potential of 25 times higher than carbon dioxide.

A study by the National Academy of Agricultural Sciences (NAAS) highlights that the lack of access to a storage facility is the most important cause of post-harvest losses for all types of food products in India. India loses nearly 10% of its grain and oilseeds annually. Harvest to household losses may actually be more than what a country such as Australia exports. The major reason for these losses is inappropriate storage management. Hence, the loss of food ingredients due to improper storage management and infrastructure can be a major restraining factor for the growth of the bulk food ingredients market.

Opportunity: Rise in demand for natural or clean label products

Healthy, and ‘clean’ food products with fewer additives. Unlike organic, however, the term ‘natural’ remains undefined by legislators. Consumers are opting for cleaner products that contain an absolute minimum of synthetic or chemical additives.

According to the survey conducted by Consumer Reports National Research Center in 2013, two-thirds of the US consumers prefer locally grown products, whereas more than 60% of the population opt for ‘clean’ or ‘natural’ labeled products. As a result of the increase in demand for organic products in the North American and European region, as well as the other parts of the world, there is a significant growth in demand for bulk food ingredients products.

Clean-label products are organic, natural, non-GMO, and minimally processed consumer-friendly products. According to the Clean Label Alliance, it is witnessed that nearly 75% of consumers are willing to pay high prices for clean-label products. The increase in health awareness among consumers is projected to drive the demand for natural and clean-label products, which, in turn, would drive the demand for bulk food ingredients. Consumers are becoming inclined toward clean-label products, as they are becoming more aware of the non-synthetic ingredients and their negative effects. This is projected to encourage the adoption of products and diets with clean-label ingredients.

Clean label is one of the most important features of packaged foods. Consumer awareness is strengthening the clean label trend, which, in turn, encourages them to adopt plant-based and natural diets that support the growth of the bulk ingredients market. Retailers are also catering to the growing demands for clean-label products among consumers by offering their private label brands. The recent outbreak of COVID-19 has led consumers to buy more clean label products due to their safe consumption and health benefits. This is projected to drive the growth of the bulk food ingredients market.

The below figure indicates consumer preference for clean label products in the US and suggests that the demand for clean label products in the US is increasing.

Challenge: Unstable agricultural supply results in price volatility

Price fluctuations are a common feature of well-functioning agricultural product markets. Measures such as import duties, export taxes, non-tariff barriers, or domestic policies, such as price support, influence the price changes in domestic markets. According to FAO, the global markets have witnessed a series of dramatic fluctuations in commodity prices. Since 2000, prices have deviated from their long-term negative growth trend and have become increasingly volatile. In addition, prices have witnessed an increase between late 2006 and mid-2008 to their highest level in thirty years and have decreased sharply through 2009. In late 2010 and early 2011, the prices regained their peak. Currently, food prices are projected to remain high and volatile in the market.

Price is one of the major restraining factors in the bulk food ingredients market. There are various fluctuations in raw material prices, such as the prices of starch and sugar for sweetener ingredients. According to a report published by the FAO, in 2018, the starch price was quoted at nearly USD 507/ton, which is 44% higher than in October 2017. In addition, the quotations have exhibited considerable volatility throughout 2018. The price of sugar across the world keeps on fluctuating. According to FAO, the sugar price index has increased by 5.5% from December 2019 to January 2020, making the fourth consecutive monthly increase. The latest increase was encouraged by a 17% drop in India’s sugar output and a 66% production fall in Brazil, which is one of the largest sugar-producing countries, and a 25% contraction in Mexico’s harvest. Export nut prices witnessed a decrease of 20.5% from December 2019 to June 2020. This decline has resulted from a loss in demand from Asia due to the restaurant closures and a decrease in purchases of some nuts (perceived luxury foods). In addition, a low export record of the almond crop in California supported the drop in prices.

Bulk Food Ingredients Market Ecosystem

Prominent companies in this market include well-established, financially stable manufacturers of bulk food ingredients. These companies have been operating in the market for several years and possess a diversified service portfolio, state-of-the-art laboratory & technologies, and strong global sales and marketing networks. Prominent companies in this market include Archer Daniels Midland Company (US), International Flavours & Fragrances Inc. (US), Olam Group (Singapore), Cargill, Incorporated (US), Ingredion  (US), Associated British Foods plc (UK), Tate & Lyle PLC (UK), EHL Ingredients (UK), Batory Foods (US), Graincorp (Australia), Community Foods (UK), McCormick & Company, Inc. (US), The Source Bulk Foods (Australia), Essex Food Ingredients (US), and Subnutra (India).

By primary processed type, herbs & spices segment is projected to have the fastest growing rate during the forecast period.

There is an increasing global demand for natural and organic ingredients, driven by the growing consumer preference for clean label products. Herbs and spices are natural flavor enhancers that provide unique tastes, aromas, and health benefits. They are widely used in various cuisines and food applications, including processed and packaged foods, beverages, sauces, and seasonings. Herbs and spices offer a wide range of flavors and can provide differentiation to food products, allowing manufacturers to create unique and appealing taste profiles. With consumers seeking diverse and exciting flavor experiences, the demand for a variety of herbs and spices is on the rise.

By application, beverage segment is projected to have fastest growing rate during the forecast period.

There is a growing global demand for a wide variety of beverages, including carbonated drinks, juices, sports drinks, ready-to-drink teas and coffees, functional beverages, and alcoholic beverages. As consumers seek convenience and new taste experiences, the beverage industry is constantly innovating to meet these demands. Consumers are increasingly conscious of their health and wellness, driving the demand for healthier beverage options. This includes beverages with natural ingredients, reduced sugar content, functional additives, and botanical extracts. Bulk food ingredients such as natural sweeteners, fruit extracts, natural flavors, and plant-based ingredients are essential in developing healthier and more appealing beverage products.

Asia Pacific is expected to have the fastest growing rate during the forecast period.

The Asia Pacific region has a large and rapidly growing population. The rising population leads to increased food consumption and drives the demand for bulk food ingredients to meet the growing production needs. As more people enter the middle class and experience higher disposable incomes, there is an increased demand for processed and convenience foods, further boosting the need for bulk ingredients. There is a shift in dietary patterns in the region. Urbanization, changing lifestyles, and Western influences have led to a higher consumption of processed and packaged foods. This trend increases the demand for bulk food ingredients as manufacturers require large quantities of ingredients to meet the growing demand for these convenience products. The region is witnessing rising consumer awareness of health and wellness, leading to a growing demand for natural and organic food products. Bulk food ingredients such as herbs, spices, natural sweeteners, and functional additives align with this consumer preference for clean label and healthier options.

Key Players in Bulk food Ingredients Industry

The key players in this include Archer Daniels Midland Company (US), International Flavours & Fragrances Inc. (US), Olam Group (Singapore), Cargill, Incorporated (US), Ingredion  (US), Associated British Foods plc (UK), Tate & Lyle PLC (UK), EHL Ingredients (UK), Batory Foods (US), Graincorp (Australia), Community Foods (UK), McCormick & Company, Inc. (US), The Source Bulk Foods (Australia), Essex Food Ingredients (US), and Subnutra (India). These companies have been focusing on expanding their market presence, enhancing their solutions, and partnering with many channel partners and technology companies to cater to consumers across the globe. The deep roots of these players in the market and their robust offerings are among the major factors that have helped them achieve major sales and revenues in the global bulk food ingredients market.

Bulk food Ingredients Market Report Scope

Bulk food Ingredients Market Highlights

Market By Primary Processed Type

• Nuts
• Oilseeds
• Grains, pulses, and cereals
• Herbs & spices
• Sugar
• Tea, coffee, and cocoa
• Salt
• Other types (dried vegetables and citric acid)

Market By Secondary Processed Type

• Dry fruits & processed nuts
• Vegetable oil
• Processed herbs & spices
• Processed grains, pulses, and cereals
• Sugar & sweeteners
• Tea, coffee, and cocoa
• Flours
• Sea salt
• Other types (dried vegetables and citric acid)

Market By Distribution Channel

• Direct from manufacturers
• Distributors

Market By Application

• Food products
  • Bakery products
  • Confectionery products
  • Snacks & spreads
  • Ready meals
  • Other food applications
  • (infant formula and dairy products)
• Beverages
  • Alcoholic beverages
  • Non-alcoholic beverages
  • Hot beverages
  • Cold beverages

Market By Region

• North America
• Europe
• Asia Pacific
• South America
• Rest of the World

Recent Developments

• In January 2023, Cargill, Incorporated announced the completion of its acquisition of Owensboro Grain Company, a soybean processing facility and refinery located in Owensboro, Ky. Cargill's acquisition of Owensboro Grain Company will strengthen its efforts to build capacity across its North American oilseeds network to meet the rising demand for oilseeds in the food, feed, and renewable fuel industries.
• In October 2022, International Flavors & Fragrances Inc. opened its innovation center worth USD 30 million in Singapore, to innovate and launch products and technologies in all its businesses. This will help the company come up with innovative products in various categories such as sweeteners.
• In July 2022, Olam Group acquired Club Coffee L.P., which is one of Canada’s largest coffee roasters and packaging solutions providers. This will help the company grow its coffee business in Canada, strengthen its coffee business, and meet the growing demand for coffee.
• In June 2022, ADM (US) partnered with Bayer AG (Germany) to build and implement a sustainable crop protection model for soybean farmers in Maharashtra, India. During this partnership, Bayer will provide regular training to ADM cluster agronomist team in Soybean markets and Bayer will also develop a crop protection package for all crops of soybean and pulses.

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