Clean Label Ingredients Market (By Form: Powder, Liquid; By Type: Natural Colors; By Application; By Distribution Channel) - Global Industry Analysis, Size, Share, Growth, Trends, Revenue, Regional Outlook and Forecast 2024-2033

Clean Label Ingredients Market Size and Growth 2024 to 2033

The global clean label ingredients market size was estimated at USD 124.78 billion in 2023 and it is expected to surpass around USD 190.47 billion by 2033, poised to grow at a CAGR of 4.32% from 2024 to 2033. The clean label ingredients Market has gained significant traction in recent years, driven by increasing consumer demand for transparency and natural products. Clean label ingredients refer to food additives and ingredients that are perceived as natural, wholesome, and free from synthetic chemicals, artificial additives, or genetically modified organisms (GMOs). Consumers today are more health-conscious and prefer products that have a short, simple ingredient list, with items they can easily recognize and understand.

Key Pointers

• The Europe region dominated the global market with the largest market share of 40% in 2023.
• By Form, the powder segment captured the maximum market share of 63% in 2023.
• By Form, the liquid segment is estimated to expand the fastest CAGR of 3.94% from 2024 to 2033.
• By Type, the natural flavor segment held the largest share of 21% in 2023.
• By Type, the fruit & vegetable ingredients segment is anticipated to grow at the noteworthy CAGR of 7.15% during the forecast period.
• By Application, the food segment held the largest market share of 41% in 2023.
• By Application, the dairy, non-dairy, and fermented beverages segment is expected to showcase the fastest CAGR of 4.97% from 2024 to 2033.
• By Distribution Channel, the B2B segment held the largest share of 72% in 2023.

What are the Growth Factors of Clean Label Ingredients Market?

The growth of the clean label ingredients market is primarily driven by anincreasing consumer demand for transparency and natural products. As consumers become more health-conscious, there is a rising preference for food and beverages made with ingredients that are simple, natural, and free from synthetic additives, artificial colors, and preservatives. Additionally, the growing awareness about the potential health risks associated with artificial ingredients has led to a shift towards clean label products. Manufacturers are responding by reformulating their products to meet these demands, which is further accelerating market growth. Moreover, stringent government regulations on food labeling and a growing trend toward plant-based and organic foods are also contributing to the expansion of the clean label ingredients market.

What are the Trends in Clean Label Ingredients Market?

• Rising Demand for Natural Ingredients: Consumers are increasingly seeking natural alternatives to artificial additives. Ingredients like natural colors, flavors, and preservatives derived from plants, fruits, and vegetables are gaining popularity as consumers prioritize health and wellness.
• Growth of Plant-Based and Organic Products: The clean label trend is closely linked with the rise in plant-based and organic foods. Consumers looking for healthier and more sustainable options prefer products with minimal processing and organic certification, driving demand for clean label ingredients.
• Transparency and Traceability: There is a growing consumer demand for transparency in ingredient sourcing and production processes. Brands are responding by providing detailed information about where their ingredients come from and how they are processed, enhancing consumer trust.
• Innovation in Food Formulation: Companies are investing in research and development to find innovative solutions for replacing synthetic additives with natural ingredients. This includes advancements in natural emulsifiers, sweeteners, and texturizers that maintain product quality without compromising on health benefits.

What are the Key Challenges Faced by Clean Label Ingredients Market?

• High Cost of Natural Ingredients: One of the primary challenges in the clean label ingredients market is the higher cost of natural and organic ingredients compared to synthetic alternatives. This can increase production costs for manufacturers, which may be passed on to consumers as higher prices.
• Limited Shelf Life: Natural ingredients often have a shorter shelf life compared to their synthetic counterparts. This presents a challenge for manufacturers in terms of maintaining product freshness, reducing waste, and ensuring a consistent supply chain.
• Supply Chain Complexity: Sourcing high-quality, natural ingredients in sufficient quantities can be challenging. The clean label market often requires a diverse and complex supply chain, with stringent quality control measures to ensure ingredient integrity, which can complicate procurement processes.
• Technical and Formulation Challenges: Replacing synthetic ingredients with natural alternatives can be technically challenging. Manufacturers may struggle to achieve the same taste, texture, or stability in their products, leading to a potential compromise in product quality or consumer acceptance.

Which Region Dominates the Clean Label Ingredients Market?

The Europe region accounted for a dominant revenue share of 40% in 2023. This dominance is driven by the presence of leading clean-label ingredient manufacturers, along with increased R&D efforts and the introduction of innovative products. Additionally, favorable government initiatives addressing the negative health effects associated with synthetic food additives and flavors are further boosting the demand for clean-label products in the region.

What is the Contribution of Europe to Clean Label Ingredients Market? 

In North America, the clean label ingredients market is projected to grow at the fastest CAGR of 4.83% during the forecast period. The rising consumer interest in plant-based foods and healthier beverages is significantly driving the demand for clean-label ingredients. This growing trend presents a promising opportunity for companies to develop and offer innovative products to consumers in the region.

The Asia Pacific region is expected to experience a steady CAGR of 8.23% over the forecast period, largely due to the increasing demand for fast food products. The growing popularity of plant-based diets and the rise in health-conscious consumers are fueling the demand for organic products in the region. For example, in November 2022, India-based Vecan Foods launched plant-based meals. In response to evolving consumer preferences, several companies are expanding their product portfolios to gain a competitive edge.

Form Insights

The powder segment held the largest share of 63% in terms of revenue in 2023. Factors such as longer shelf life and ease of storage are the major factors fueling the demand for powder-based clean-label ingredients. Powdered clean label ingredients can be easily blended into dry mixes, dough, and batters enabling precise control over the ratio of ingredients and achieving a suitable texture for the product. Additionally, powders also provide versatility in terms of dispersion in liquids thereby allowing manufacturers to provide different product formulations. In July 2023, Givaudan partnered with Manus Bio to announce the launch of BioNooKatone, a sustainably sourced citrus flavor sourced from natural citrus extracts.

On the other hand, the liquid segment promises a significant CAGR of 3.94% during the forecast period. Factors such as dispersion and ease of use in food and beverage applications are fueling the demand for the segment. Liquid ingredients disperse uniformly resulting in a consistent distribution of the product leading to improved flavor and texture. In October 2020, Kerry Group announced the launch of natural citrus extracts made of orange, tangerine, lime, and lemon. The citrus extracts are ideal to use in ready-to-drink beverages and sparkling drinks.

Type Insights

The natural flavor segment held the largest share of 21% in 2023. Several consumers are seeking healthier alternatives to artificial flavors, leading to a surge in demand for flavors sourced from natural sources. In addition, favorable regulatory scenario and government support toward the usage of natural flavors in diverse application is fueling the demand for the segment. Rising innovations and product developments in natural food flavor sources have also profited the natural flavor industry. In September 2023, Belgium-based Solvay announced the launch of three naturally sourced flavor ingredients Sublima, Delica, and Alta. The flavors are sourced from vanillin.

The fruit & vegetable ingredients segment is expected to showcase a CAGR of 7.15% during the forecast period. Consumers are increasingly concerned about artificial additives, preservatives, and synthetic ingredients in their food. Fruits and vegetables are natural ingredients that can enhance the appeal of clean-label products. Also, the rising demand for plant-based food and beverages is driving the demand for naturally sourced fruit and vegetable ingredients. In March 2023, Ingredion Incorporated announced the launch of citrus-based texturizers FIBERTEX CF 102 and FIBERTEX CF 502 in its clean-label ingredient portfolio. The citrus fibers are sourced from peels of citrus fruits and can be used in dressings, sauces, baked goods, and meat alternatives.

Application Insights

The food segment held the largest market share of 41% in 2023. The growing consumer interest in minimally processed ingredients has prompted manufacturers to revamp their product portfolios to meet clean label standards. In July 2023, as per Ingredion’s study, 71% of consumers are willing to pay higher prices for clean-label products.

The COVID-19 pandemic has further amplified the significance of clean-label food products, as consumers have become more cautious about the food products they purchase. Consumers are prioritizing clean labels as they seek greater assurance about the safety and quality of the food they consume. As a result, clean label renovation has become a key priority for many manufacturers, aligning their offerings with consumer expectations and preferences.

The dairy, non-dairy, and fermented beverages segment is expected to showcase the fastest CAGR of 4.97% during the forecast period. Factors such as the high prevalence of allergies coupled with the demand for beverages free from additives and synthetic chemicals are the major factors driving the demand for clean-label beverages. In September 2021, Clean Energy, a provider of sports nutrition products announced the launch of on-the-go smoothie packs sourced from organic vegetables and fruits. The pack is available in flavors such as strawberry, blueberry, spinach, and flaxseed.

Distribution Channel Insights

Based on distribution channel, the clean label ingredient market is bifurcated into B2B and B2C. The B2B segment held the largest share of 72% in 2023. Food manufacturers and ingredient suppliers are placing a stronger emphasis on the use of sustainably sourced ingredients owing to the changing consumer landscape. Utilization of clean-label ingredients enables B2B businesses to provide their customers with the assurance that their products adhere to specific quality standards and cater to consumer preferences. Furthermore, stricter labeling regulations is also encouraging B2B business to offer products that are minimally processed.

The B2C segment is anticipated to grow at a CAGR of 4.64% during the forecast period. The B2C segment includes online channels, supermarkets, hypermarkets, specialty stores, and other convenience stores. The rise in the number of companies offering clean-label food and beverages coupled with the wider availability of newer brands through online channels and supermarkets is boosting the demand for the B2C segment. Manufacturers are increasingly utilizing the use of social media and marketing techniques to garner interest from consumers.

Who are the Top Manufactures in Clean Label Ingredients Market?

• Cargill
• Archer Daniels Midland
• Koninklijke DSM N.V
• Dupont De Nemours and Company
• Kerry Group Plc
• Tate & Lyle Plc
• Corbion Inc.
• Frutarom
• Kerry Group PLC
• Sensient Technologies
• Ingredion Incorporated

Clean Label Ingredients Market Segmentations:

By Form 

• Powder
• Liquid
• Others

By Type 

• Natural Colors
• Natural Flavors
• Fruit & Vegetable Ingredients
• Starch & Sweeteners
• Flour
• Malt
• Others

By Application 

• Food
  • Bakery
  • Confectionery
  • Cereals & Snacks
  • Processed Food
  • Others
• Pet Food
• Dairy, Non-Dairy, and Fermented Beverages
• Others

By Distribution Channel 

• B2B
• B2C

By Region

• North America
• Europe
• Asia Pacific
• Central & South America
• Middle East & Africa