South America Specialty Food Ingredient Market Size

South America Specialty Food Ingredient Market Analysis

The South American Specialty Food Ingredient Market is projected to witness a CAGR of 3.82% over the next five years.

The industry for specialty food ingredients essentially thrives on the wider technological and functional benefits that these ingredients confer, in terms of high quality, safety, affordability, nutrition, and deliciousness of processed food products. The preference for certain types of food products is now core to some consumers' identities, especially in developing economies in South America such as Columbia, Brazil, and others, which is driving the demand for specialty food ingredients. Brazil is the world's fifth-largest economy and South America's largest economy. It is the largest country in South America, with the highest population, the largest GDP, and the greatest number of trades on the entire continent. Hence, it provides good opportunities for specialty ingredient manufacturers to offer their products in the country and establish a good consumer base.

South American consumers' interest in high-quality food products has increased the demand for fortified drinks and functional foods with low or no added sugar, owing to the increasing incidences of obesity across the region. As a result, to meet rising consumer demand, players are innovating and introducing low-sugar sweeteners.For instance, Pure Circle offers sweeteners like stevia ingredients for food and beverage manufacturers and owns an innovation center in Brazil to strengthen its presence in the market. Moreover, the region's aging population has led to a growing interest in attaining wellness through healthy diets. Therefore, this is resulting in an increased demand for specialty food ingredients across the region. Owing to the above opportunities, the players have been expanding in the market to take advantage of the opportunities in the market.

Foreign players' expansion and joint ventures in Argentina's food processing sector are increasing the use of specialty food ingredients. For instance, in 2021, Ingredion signed an agreement with Argentina food producer Grupo Arcor to form a joint venture (JV) to broaden food and beverage ingredient offerings to customers in Argentina, Chile, and Uruguay. According to the agreement, Arcor holds a 51% stake in the venture, while Ingredion holds the remainder. The joint venture is expected to have a combined turnover of more than $300 million.