The global Citric Acid Market is estimated to be valued at US$ 118.0 Mn in 2022 and is expected to exhibit a CAGR of 1.7% over the forecast period 2023-2030, as highlighted in a new report published by Coherent Market Insights.
Market Overview:
Citric acid is an acidic compound derived from citrus fruits. It is commonly used as an acidulant and preservative in foods and beverages. Some key advantages of citric acid are its sour taste, ability to prevent browning reactions in cut fruits, and versatility for use in various food applications like soft drinks, jams and jellies, desserts etc. With growing health consciousness, citric acid has garnered popularity as a 'clean label' and environmental friendly alternative to synthetic preservatives. About 60% of the citric acid produced is used in food and beverage applications while the rest finds use in various industrial applications like detergents, bath products and pharmaceuticals.
Market key trends:
One of the key trends driving the growth of citric acid market is the shift towards natural and clean label ingredients. Consumers are increasingly demanding products with simple and recognizable ingredients. Citric acid derived from natural sources like citrus fruits meets this demand as it is considered a 'clean label' ingredient. Furthermore, citric acid production is more environmental friendly as compared to other acidulants. Its manufacturing process creates fewer pollutants and greenhouse gases. Citrus fruits used for citric acid extraction are also a renewable resource. This environmental credential of citric acid is boosting its preferences among formulators and driving the demand in the market.
Porter's Analysis
Threat of new entrants: The threat is moderate as production capacity for citric acid requires high capital investment. However, mature markets and low profit margins act as deterrents.
Bargaining power of buyers: The bargaining power is high due to availability of substitutes and undifferentiated nature of the product. Buyers can negotiate for better prices and demand value-added services from suppliers.
Bargaining power of suppliers: The bargaining power of suppliers is moderate as citric acid production is dominated by a few major players globally. However, suppliers have bargaining power owing to high concentration of production facilities in specific regions.
Threat of new substitutes: The threat is moderate as citric acid has few substitutes such as acetic acid and glucono delta lactone. However, citric acid remains the major renewable substitute for phosphates and biodegradable substitute for cleaning agents.
Competitive rivalry: The competitive rivalry is high due to presence of large players globally.
Key Takeaways
The Global Citric Acid Market Demand is expected to witness moderate growth, exhibiting 1.7% CAGR over the forecast period, due to increasing demand from food and beverages industry.
The Asia Pacific region dominates the global citric acid market, owing to presence of major citric acid producers such as China, India, and Thailand in the region. China alone contributes to around 45% of global citric acid production. Growth in food processing industry is further propelling demand in the region.
Key players operating in the citric acid market are Archer Daniels Midland, Cargill, Tate & Lyle, Jungbunzlauer Suisse AG, Huangshi Xinghua Biochemical. Major players are focusing on expanding production capacities to cater to rising demand for citrate salts and anhydrous citric acid especially in emerging economies
