Food Coating Market

Food Coating Market Size, and Forecast (2023-2028)

The food coating ingredients market is estimated at USD 3.6 billion in 2023 and is projected to reach USD 4.9 billion by 2028, at a CAGR of 6.2% from 2023 to 2028. The food coating equipment market is estimated at USD 5.7 billion in 2023 and is projected to reach USD 7.7 billion by 2028, at a CAGR of 6.3% from 2023 to 2028.

The elemental function of coating food is to protect the food from spoilage; but, over the past few decades, food coating has developed an entirely new definition in industrial food processing. Food coating is now carried out to enhance the appearance and impart additional flavors to traditional food products. For these reasons, packaged food manufacturers are taking advantage of food coating ingredients to improve the quality and at the same time increase the shelf life of their products. This enables manufacturers to increase sales and reduce wastage during distribution and in the supply chain network. Food coating manufacturers are also focusing on the development of healthy and nutritious coating ingredients such as oats, sugar-free ingredients, gluten-free ingredients, and others to tackle the growing concerns of obesity, diabetes, and allergies among consumers.

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Food Coating Market Dynamics

Drivers: Rising consumption of processed food to propel the market

The increasing demand for convenient and time-saving food options, driven by the fast-paced and busy lifestyles of consumers in urban areas, has resulted in a significant market for food coating ingredients and equipment. Ready-to-eat and ready-to-cook meat, confectionery products, and bakery food items have gained popularity due to their ease of preparation, nutritional value, and long shelf life. Additionally, consumers' growing preference for protein-based foods, the rise in frozen food consumption, and the increasing snacking habits have further fueled the demand for these products. Consequently, the market is experiencing a surge in the need for various ingredients like spices, fats, oils, cocoa, flours, sugar, and syrups. This increased demand for ingredients is also expected to drive the sales of equipment such as coaters, applicators, and enrobers.

Meat processors select the equipment for processing meat based on the specific meat type. Meat processing involves various physical and chemical treatment methods, generally combining various methods. According to the US Department of Agriculture (USDA), farmers and meatpackers produced a record 4.5 billion pounds of red meat and poultry alone in April 2022, which, in turn, will need more processing capacity, further leading to higher demand for food coating equipment such as bread and batter applicators.

Similarly, snacks and bakery products require coating equipment for flavoring, glazing, and enrobing the end products, adding taste and texture and ensuring longer shelf life. Food coating equipment reduces the product’s ingredient waste, processing time, and cost.

Restraints: Rising cost of production due to fluctuating price of ingredients

The increasing prices and unpredictable fluctuations of ingredients have become significant challenges in the field of food coating. The high cost of ingredients not only raises production expenses but also discourages manufacturers from adopting new coating technologies. This is due to the resulting lower profit margins and the longer time required to reach the breakeven point for food manufacturers. To overcome these obstacles, food coating equipment must provide cost-effective solutions in terms of both output and ingredient usage. This is necessary to compensate for the rising ingredient prices and enable food manufacturers to achieve economies of scale. For example, the prices of cocoa beans and sugar, which are crucial ingredients in coating confectionery, chocolates, and snacks, have continuously increased from 2018 to 2022. As a result, the high cost of the final product forces manufacturers to prioritize cost-cutting measures rather than investing in new technologies or equipment for their production facilities.

Opportunities: Growing investment opportunities to develop new food coating technology

With the increasing influence of globalization, consumers are becoming more aware of various food trends. Concurrently, food manufacturing companies are expanding their operations worldwide, thanks to trade liberalization. This expansion has prompted food manufacturers to explore new and untapped markets. Even domestic players are enhancing their product offerings to keep up with the escalating competition in the market. Notably, manufacturers in China, India, and Japan have developed their own food coating equipment that rivals the quality of imported equipment or the offerings of established market leaders in coating technology. To gain a competitive advantage in both domestic and international markets, companies prioritize innovation in their food coating technology. They employ cutting-edge technologies such as electrostatic coating, which achieves a remarkable 98% coating coverage on all products, surpassing traditional flavoring methods and further enhancing coating efficiency.

To cater to the changing demand from food manufacturers, food coating equipment manufacturers focus on the R&D of various technologies used in equipment. The key features required by food manufacturers include better and more large-scale handling of food products, increasing the shelf life of products, improved production capacity, and reducing the wastage of ingredients.

Technological Advancements: Advancements in food coating technology, such as improved coating formulations, production methods, and equipment, can enhance the efficiency and quality of coated food products, potentially driving market growth.

In 2022, IIT Guwahati developed a biodegradable, edible coating that extends the shelf life of fruits and vegetables. According to officials, this coating material, which will prevent wastage, was tested on vegetables such as potatoes, tomatoes, green chili, strawberries, Khasi Mandarin variety of oranges, apples, pineapples, and Kiwi and was found to keep these vegetables fresh for nearly two months.

An example of this is cinnamon essential oils utilized within cosmetics and food as an antimicrobial plant extract additive. It can be utilized as an antimicrobial food packaging product when incorporated within cyclodextrin nanosponges. Garlic essential oils have also been utilized within food packaging for their antimicrobial properties. The innovative approach to incorporating essential oils within edible coatings can be a method to prevent the growth of mold and yeast. This technique would optimize and effectively increase the shelf-life of food products. Nano-emulsions, which are oil-in-water or water-in-oil emulsions, can be a step towards improving the physiochemical properties of edible coatings for further quality control of food products. These advanced coatings have been researched and found to improve fruit quality and sensory characteristics, such as using a nano-emulsion within a pectin-based edible coating on freshly cut orange slices. This next generation of edible coatings may revolutionize the food industry to increase the viability of fruit and vegetables; this technique allows these emulsions to fuse with the components easily.

Challenges: Infrastructural and regulatory challenges in developing countries

The presence of prominent food coating equipment manufacturers and ingredient suppliers has led to saturated and highly competitive markets in countries like the US, the UK, Germany, and France. As a result, manufacturers in developed economies are compelled to seek untapped potential markets and clients in emerging economies to sustain growth in the food processing industry. Expanding into different geographical regions is a strategic goal for ingredient and equipment manufacturers to broaden their consumer base. However, this expansion faces challenges such as regulations, infrastructure limitations, required investments, and economic environments. Setting up a new manufacturing unit in a developing country demands significant investments from food coating and equipment manufacturers. Apart from internal facility investments, manufacturers must allocate substantial resources to develop an efficient supply chain network and storage facilities for raw materials and finished goods. Insufficiently developed infrastructure in countries like Brazil, India, and Argentina, coupled with limited government support for foreign entities in nations such as China, pose significant obstacles for both ingredient and equipment manufacturers, thus hindering the growth of the food coating market. Although lower raw material prices and labor costs can benefit food processors, the costs associated with infrastructural development serve as a major challenge for these companies.

Food Coating Market: Value Chain Analysis

Ecosystem Analysis

The market ecosystem for food coating encompasses various stakeholders and components involved in the production, distribution, and consumption of food coating products. The key elements of the food coating market ecosystem:

Food Coating Manufacturers: These are the companies that specialize in producing food coating ingredients, equipment, and solutions. They develop and manufacture a wide range of coatings, including batter and breading mixes, seasonings, marinades, oils, fats, and specialized coating equipment.

Food Processing Companies: Food processing companies utilize food coating ingredients and equipment to enhance the taste, texture, appearance, and shelf life of their products. They incorporate food coatings into their production processes for various food items such as meat, poultry, seafood, bakery products, confectionery, snacks, and frozen foods.

Raw Material Suppliers: Raw material suppliers play a crucial role in the food coating market ecosystem. They provide ingredients like spices, herbs, flours, sugars, oils, fats, cocoa, starches, and various additives required for food coating formulations. These suppliers may include agricultural producers, ingredient manufacturers, and distributors.

Equipment Manufacturers: Equipment manufacturers produce and supply food coating equipment, such as coaters, applicators, enrobers, and other specialized machinery. These manufacturers focus on developing innovative technologies to improve coating efficiency, productivity, and quality.

Ecosystem Map

Based on equipment type, the coaters & applicators segment is estimated to account for the largest market share of the food coating market.

Coating involves various techniques, such as spraying, dipping, and brushing. It is done to improve palatability, enjoyment, or protection. Over the years, food coating equipment has advanced to handle a variety of coating ingredients to coat a variety of food products, from fragile to frozen. Developed nations are the major markets due to the high demand for bakery, dairy, and meat products. Apart from these applications, a coating can also be utilized to extend the shelf life of perishable food, such as apples. Due to the lack of sophisticated infrastructure for on-farm storage in some developing countries, such as India, a coating produced of wheat straw hemicellulose polysaccharide (WP) improves the shelf-life of products, thereby assisting farmers and suppliers by giving them more time to sell their harvest. Thus, improved palatability, extended shelf life, and improved quality of food & beverage products are likely to drive the market for coating equipment.

Based on Application, the meat & seafood products sub segment of the food coating ingredient market is anticipated to dominate the market.

Commonly used ingredient for the coating of meat & seafood products is flour, which helps to provide appealing colors and flavors. Different coatings are applied to the surface of meat loaves, sausages, and other meat food products. Both fresh and frozen types of meat, when subjected to extended storage, lose substantial water due to evaporation. It is desirable to have the meatloaves coated as the coating lends protection to the product and gives it more appealing organoleptic characteristics.

Based on application, the confectionery products is projected to witness the highest CAGR in food coating equipment market during the forecast period.

There has been a rising demand for confectionery products in the European region, which presents a mature market for the confectionery industry. Hence, this region is expected to show slow growth as compared to other regions. Confectionery is generally high in calories and carbohydrates but poor in micronutrients. Industry statistics show that, in terms of sales generated, the Western European region dominated the worldwide confectionery sector. Better-for-you products have become more popular as a response to health issues. The clean label movement has impacted the confectionery market because of the demand for colors that are derived naturally. Many food firms announced plans to reformulate their products to swap out artificial additives and streamline ingredient lists to meet this growing demand. Few companies have made acquisitions, with companies having a strong bakery processing equipment portfolio to enhance their product as well. Gea Group (Germany) has firmly moved into the bakery sector with the acquisition of Comas and Imaforni, the leading suppliers of demanding industrial processing equipment and solutions for the cakes, pies, cookies and biscuits, crackers, and snacks industry.

Food Coating Market Trends

• Health-Conscious Consumer Preferences: Consumers were increasingly seeking healthier food options, leading to a rise in demand for food coatings that are gluten-free, low-fat, and made from natural ingredients. Coatings made from alternative flours (such as chickpea or almond flour) and plant-based proteins were gaining popularity.
• Innovation in Coating Technologies: Food coating manufacturers were investing in research and development to introduce innovative coating technologies. These included advanced coating systems designed to improve texture, flavor, and shelf life while reducing oil absorption during frying.
• Demand for Convenience Foods: The growing demand for convenient food options was driving the market for coated convenience foods such as frozen chicken nuggets, fish sticks, and pre-coated frozen vegetables. Manufacturers were focusing on developing coatings that maintain crispiness after reheating, catering to the needs of busy consumers.
• Expansion in the Snack Industry: The snacking trend was fueling the growth of the food coating market, particularly in the snack food segment. Coatings were being used to enhance the taste and texture of a wide variety of snack products, including chips, pretzels, and popcorn.
• Clean Label Products: Clean label trends were influencing the food coating market, with consumers demanding transparency in ingredient sourcing and processing methods. Manufacturers were responding by offering coatings made from simple, recognizable ingredients with no artificial additives or preservatives.

The Asia Pacific market is projected to dominate the food coating equipment market.

The region’s growing demand for processed food, improved manufacturing industry growth over the past decade, and advancements in the food industry have provided new opportunities for the food coating ingredients market. An increase in processed and convenience food production and innovations in segments such as meat, snacks, and bakery & confectionery products drive the demand for coating ingredients in the Asia Pacific region. China and India are set to experience continual demand during the forecast period. Many global companies are focusing on these emerging markets and are increasing their footprint by setting up manufacturing facilities, distribution centers, and R&D centers. India is projected to be the fastest-growing market in the region as there are many investments being made by several multinational corporations due to favorable support of the government and low labor cost. The Asia Pacific food & beverage industry is greatly influenced by rising consumer preference for conscious food habits, the growing trend toward natural & organic foods, and the increasing demand for convenience food products. With emerging economies, growing industrialization, increasing demand for processed foods, and consumer preference for quality products, ingredient suppliers are optimistic about the growth of the food & beverage industry. These trends and preferences have associated with the increasing consumption of coated food products.

Key Market Players

Archer Daniels Midland (US),Kerry Group (Ireland), Cargill (US), Ingredion Incorporated (US), and DSM (The Netherland) are among the key players in the global food coating market. To increase their company's revenues and market shares, companies are focusing on launching new products, developing partnerships, and expanding their production facilities. The key strategies used by companies in the food coating market include geographical expansion to tap the potential of emerging economies, strategic acquisitions to gain a foothold over the extensive supply chain, and new product launches as a result of extensive research and development (R&D) initiatives.

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Scope of the Report

Food Coating Market Segmentation:

By Ingredient Type

• Batter
• Flours

By Application

• Bakery
• Snacks

By Equipment Type

• Coaters & Applicators
• Enrobers

By form

• Dry
• Liquid

By Mode of operation

• Automatic
• Semi-automatic

By Region

• North America
• Europe
• Asia Pacific
• South America
• Rest of the World (RoW)

Other ingredient type includes starches, proteins, and colors.

Other equipment type includes panning systems, fluid applicators, and sugar applicators.

RoW includes the Middle East & Africa.

Food Coating Industry News

• In July 2021, Kerry has officially opened a new 21,500-square-foot state of the art facility at its Jeddah operation in the Kingdom of Saudi Arabia. This will meet the growing consumer demand in the region for healthier, tastier, and more sustainable food and beverages, particularly in snack, meat and bakery sectors.
• In September 2021, Ingredion signed a new strategic distribution agreement with a US-based company, Batory Foods, which is one of the leading suppliers of high-quality food ingredients, such as food emulsifiers. This agreement with Batory Foods aimed to expand its distribution all over the US. Batory Foods will be responsible for the distribution of food ingredients manufactured by Ingredion in 15 states of the US, including Arizona, California, Illinois, etc. This will help Ingredion strengthen its position and gain more market share for food emulsifiers in the US.

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