Spice and Herb Extracts Market

Spices and Herbs Extracts Market Analysis

The Spice and Herb Extracts Market is expected to register a CAGR of 7.3% during the forecast period.

Herbs and spice extracts that are more aligned toward health and wellness, as well as products that have a high penetration rate across artisanal food, culinary preparations, and generic household foods, are likely to maintain dominance over the coming years. Extracts such as ginger, dried capsicum/pimenta, pepper, curcuma, cinnamon, and cloves, have the highest potential for growth in the European market. The increasing demand for a diverse mix of herbs and spices, mostly related to the increasing popularity of ethnic cuisines and healthy foods, and the growing consumption of convenient, processed, and ready-to-eat dishes is expected to drive the demand for ethnic spice blends. Furthermore, most of the new products launched in the market are labeled as 'street food' to cater to a unique set of buyers.

The global food and beverage industry is witnessing a rapid change in eating preferences, and demand for botanical flavors is on the rise. Spice and herbs are demanded extracts to add flavors and innovate recipes in food and beverage applications. To meet this demand, companies are also equipping themselves. For instance, in 2021, Sensient Natural Ingredients LLC announced the acquisition of New Mexico Chili Products Inc., a dehydrated chili production facility in Deming, that processes capsicums and a variety of specialty chilies for commercial use and sale to CPG food manufacturers, spice blenders, and foodservice customers. With this acquisition, the company will be able to increase its sales volume across the globe.

The global spice and herb extracts market has experienced steady but sluggish growth. This is mainly due to continuous developments in recipes and beverage flavors. Further, increasing preference for botanical flavors among consumers, an increasing number of consumers eating out, and a wide range of applications of spices and herbs extracts are propelling the demand for the market. However, inconsistencies in the prices of spices and herbs and the high cost of production are affecting the growth of this market. Finally, the increasing demand for variations in flavored food products is creating a growth opportunity for the spice and herbs extracts market.

Spices and Herbs Extracts Market Trends

Therapeutic Benefits of Spices

Herbs and spices are enriched with various health and therapeutic benefits. Spices improve the taste and flavor of foods and add value to human health in several ways. The majority of spices have antiviral and antibacterial properties, with various vitamins and mineral traces. Spices impart a wide range of health benefits, such as high antioxidant value, reduction of blood sugar levels and diabetes, and improvement of skin health and brain health. Garlic has a powerful compound called allicin, which lowers the chance of heart disease and prevents the growth of cancer cells. Allicin, a potent chemical found in garlic, reduces the risk of heart illness and inhibits the development of cancer cells. These spices are used by several healthy food producers to create goods that promote health and draw in the area's nutrition consumers. Other spices, such as turmeric, are also intensively being promoted for their health benefits. These factors predict huge growth opportunities for the players to strengthen their position in the market by augmenting their product portfolio with spices that cater to larger health benefits for the global consumer who are widely tending toward health-consciousness.

The growth of the diabetic population led to a rise in the popularity of cumin, which promotes weight loss. It is effective in reducing blood cholesterol levels. The market has witnessed an increase in the consumption of spices, due to the growing consumer awareness regarding the health benefits of herbs/spices. Several health food manufacturing companies in this region utilize these spices to introduce and develop health-promoting products and attract the health-conscious consumers of the region. There is now ample evidence that spices and herbs possess antioxidant, anti-inflammatory, antitumorigenic, anticarcinogenic, and glucose- and cholesterol-lowering activities as well as properties that affect cognition and mood. All the above-mentioned factors, drive the market for spice and herb extract market globally.

European Holds Significant Share in the Market

Europe is the largest market for spice and herbs extracts globally. Despite low production, Europe is much inclined towards the import of spice, herbs, and their extracts from developing regions such as Asia-Pacific and the Middle East, and Africa. According to the ITC Trademap, Germany is by far Europe's largest importer of spices and herbs, with an import of 154 thousand metric tons in 2021, which amounts to 21% of total European Union imports. Germany's main imported product categories are pepper and capsicum (33%), ginger, saffron, curcuma, and others (32%), and vanilla (14%). Thus, European consumers' consumption of organic herbs and spices drives the market's growth. On a global scale, Europe is a mature market for spice and herb extracts and the growth rate is comparatively slower than other regions.

According to UNWTO, 584.9 million international tourists arrived in Europe in 2022. Furthermore, due to globalization and increasing tourism activities, demand for ethnic food has been increasing, which is, in turn, boosting the demand for spice and herbs extracts in various regions, and this trend is expected to continue during the forecast period. Europe was the region with the highest number of international tourist arrivals worldwide. For instance, according to European demand for spices is growing mostly due to interest in new tastes and healthy living. Furthermore, increasing inclination toward good-for-health food, organic food ingredients, food having a greater amount of transparency, and less amount of sodium in salts are expected to create opportunities for the companies manufacturing spices and seasonings. Therefore, this factor is expected to increase the consumption of organic ingredients, such as spices in home-prepared food. Also, the growing popularity of organic spices among European customers due to their chemical- and pesticide-free properties, as well as European spice and herb extract, are expected to drive growth during the forecast period. However, the majority of European food processors utilize organic herbs and spices for the sole objective of product differentiation, which in turn boosts the European spice and herb extract market.

Spices and Herbs Extracts Industry Overview

The global spices and herbs extracts market is competitive, with a significant presence of numerous global and regional players. Kalsec Inc, Kerry Group plc, Döhler Gmbh, Givaudan, and Olam International. Key players in the global spice and herbs extract market are investing in R&D and are entering into mergers and acquisitions to enhance their product portfolios. Some of the leading market players are using strategies such as expansions, and partnerships. For instance, in April 2021, Olam Food Ingredients (OFI) acquired United States-based private-label spices and seasonings manufacturer Olde Thompson at an enterprise value of USD 950 million through its wholly-owned subsidiary Olam Holdings Inc. The acquisition helped expand OFI's private label capabilities and enabled the business to provide consumers with a comprehensive range of bold, authentic, natural tastes, and flavors with end-to-end traceability and sustainability.

Spices and Herbs Extracts Market Leaders

Spices and Herbs Extracts Market News

• December 2022: Kerry, a major player in taste and nutrition, developed a new tool to assist manufacturers in optimizing the nutritional profile of their products while being mindful of the numerous front-of-pack regulations. KerryNutri Guide can use different front-of-package nutrition labeling systems to measure food and drinks and help the user get a higher score.
• December 2021: SH Kelkar and Company Ltd (SHK), which is an India-based flavor and fragrance company, announced with its completely owned subsidiary Keva Europe BV its acquisition of a 100% stake in a subsidiary of Holland Aromatics' BV, in the Netherlands. Through this, the company will cater to the new market and increase its business operations.
• December 2021: Univar BV, a subsidiary of Univar Solutions Inc., a global chemical and ingredient distributor and provider of value-added services, announced that it had expanded its Ingredients & Specialties (I & S) portfolio through a new exclusive distribution agreement with Kalsec Inc.
• August 2021: The Nedspice Group of companies collaborated with Bia Analytical in the fight against food fraud, and the addition of another product to the list of spices whose authenticity can be verified using a fast, reliable, and accredited method is vital to ensuring consumer protection.