Caramel Ingredients Market Size, Share, Industry, Forecast and outlook (2024-2031)

Global Caramel Ingredients Market Is Segmented  By Form (Solid, Liquid, Granular), By Application (Topping, Filling, Coloring, Flavoring, Others), By End-Use (Bakery, Confectionery, Beverages, Ice Cream and Desserts, Others), and By Region (North America, Latin America, Europe, Asia Pacific, Middle East, and Africa) – Share, Size, Outlook, and Opportunity Analysis, 2024-2031

Report Overview

Global Caramel Ingredients Market is expected to grow at a high CAGR  during the forecast period (2024-2031)

Caramel refers to a confectionery product that is utilized as a topping, filling, and flavoring in food and beverage variety. The food ingredient is generally prepared by heating a different kind of sugar at a defined temperature. Caramel ingredients are available in various types and forms and are used in numerous applications, including decoration on cake & ice cream, fusion in traditional dishes, and fancy food eating among others. A booming convenience food industry, rising consumer disposable income, and increased urbanization, particularly in developing economies, are some of the key factors driving the market.

Market Scope

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Market Dynamics

Increasing application of caramel ingredients across various end-use industries

Due to increased consumer indulgence in bakery and confectionery items, caramel ingredients have been gaining global acceptance. This ingredient is also widely used in beverages, where it can be found in syrups and powders in teas, lemonades, fruit drinks, colas, and beer, to name a few examples. Recognizing the ingredient's many applications, businesses of all sizes have been seeking ways to capitalize on current consumer and food trends in order to stay ahead of the competition. There's also a food-decorating trend that's gaining traction among consumers. Such factors have a favorable impact on the caramel ingredients market.

In recent years, however, the market has been challenged by the emergence of caramel substitutes. Concerns about the detrimental effects of caramel ingredients as a coloring agent have risen in recent years, which has been a big setback for the market. This has been exacerbated by a general shift in eating patterns, with consumers increasingly opting for healthier, low-carb, low-sugar items. For many manufacturers, this is proving to be a stumbling hurdle. Furthermore, growing prices of caramel components and other raw materials will limit industry expansion.

Market Segmentation Analysis

Liquid caramel ingredients held largest market revenue share in the year 2020

Liquid ingredients dominate the market due to their widespread use in the beverage industry, particularly in colas and sodas. The substance is also commonly utilized in the production of alcoholic beverages like whiskey, beer, dark rum and scotch. Salted caramel porter is the most popular beer in the fall, and companies continue to add fresh and imaginative variations to the original formula to keep consumers engaged. In December 2018, Arcadia Brewing Company teamed up with Biggby Coffee to release the Salted Caramel Coffee Porter. This limited-edition variation of one of the favorite seasonal beers was made available at select retail locations in the U.S.

Based on the end-use industry, the confectionery segment accounted for the largest revenue share in 2020. Caramel has always been a popular ingredient in confectionery and will continue to be popular in the future. Confectionery makers, large and small, have been coming up with new and creative combinations as they recognize the relevance and potential of this versatile ingredient. For example, Quality Street, one of Nestlé's most well-known chocolate, toffee, and sweets brands, included a caramel brownie chocolate in its 2019 Christmas lineup. Similarly, in the autumn of 2019, Dove, an American chocolate brand sold as 'Galaxy' in other countries, released a fall-inspired version White Chocolate Caramel Apple.

Market Geographical Share

Europe is dominating the global caramel ingredients market in the year 2020

The increased use of caramel as an ingredient in applications such as packaged and frozen foods, desserts, bakery goods, and confectionery has continued to drive the European caramel ingredients market in the forecast period. Companies have made seasonal favorites and innovation a key growth strategy, which is projected to fuel market growth in this region. For example, at the 2019 TFWA World Exhibition & Conference, Mars Wrigley International Travel Retail debuted its limited-edition M&M's and Twix options. Twix Salted Caramel and M&M's Crunchy Caramel are designed to provide customers with something fresh, unexpected, and enjoyable to enhance their travel experience.

Over the forecast period, Asia Pacific is expected to increase at the fastest rate. India, China, Indonesia, Malaysia, Korea, and Thailand, are some of the key revenue generators for both new and established firms in the region. Rapid urbanization, rising consumer disposable income, improved logistics, and the expansion of the food and beverage industry in these developing countries have all attracted large global firms to expand in the region and take advantage of the lucrative opportunities.

Companies and Competitive Landscape

The global caramel ingredients market is fragmented. Some of the key market players in the global Caramel Ingredients market include Kerry Group, Cargill, Incorporated., Sensient Technologies Corporation, Puratos Group, and Sethness Caramel Color among others. Product innovation, appealing packaging solutions, marketing and promotion efforts, collaborations with product manufacturers in other application categories, and capacity expansion in newer markets are just a few of the market's growth initiatives. For example, Mars Corporation has announced a new Milky Way variant that will be available in stores in January 2020. The Milky Way Salted Caramel bar is a different take on the classic candy bar. Milky Way Caramel Apple and Milky Way Simply Caramel are two other items from the company, which has a strong focus on caramel ingredients. Dairy Queen released two new Blizzards to its 2019 fall menu, one of them being the Heath Caramel Brownie Blizzard.

COVID-19 Impact: Negative impact on market

In 2020, the COVID-19 pandemic has had a significant impact on the food and beverage industry. Several food processing companies, bakeries, and patisseries have closed as a result of strict lockdowns imposed by various governments and regulatory organizations around the world. Due to fewer sales of food products during the COVID-19 pandemic, various industry participants and manufacturers saw a considerable decline in their revenue. Moreover, there was a decline in the retail sales of ice cream, which further declined the sales of caramel ingredients as it is widely used in ice cream and desserts.