The global annatto market was valued at USD 196.55 million in 2019 and is projected to reach USD 361.39 million by 2032, registering a CAGR of 4.71% during the forecast period. Europe led the market in 2019 with a share of 36.02%. In addition, the U.S. market is anticipated to experience notable growth, reaching USD 74.22 million by 2032, supported by increasing demand across food & beverage and personal care & cosmetics industries.
Annatto, also known as achiote seed extract, is one of the earliest natural colorants used by humans. It is widely applied in the food industry as a natural, food-grade coloring agent. The growing acceptance of natural dyes across both food and non-food industries is expected to generate strong growth opportunities. Furthermore, regulatory recognition from organizations such as the U.S. Food and Drug Administration (FDA) and the European Food Safety Authority (EFSA) has reinforced its status as a safe food additive.
Information Source: https://www.fortunebusinessinsights.com/industry-reports/annatto-market-101592
COVID-19 Impact
The COVID-19 outbreak created significant challenges for the annatto industry, primarily due to disruptions in supply chains. Restrictions on manufacturing operations, higher transportation costs, and international trade limitations slowed production and delivery. Temporary travel bans, lockdowns, and quarantine mandates also weakened demand, particularly in the foodservice sector, which represents a considerable consumer of food colorants. Despite these challenges, producers of food additives are actively working toward restoring stable supply chains, which is expected to revive demand in the near future.
Market Trends
Clean-Label Movement Driving Growth
The increasing consumer shift toward clean-label products is shaping the future of the annatto industry. Shoppers are prioritizing natural, transparent, and easily recognizable ingredients. Ethical sourcing and sustainability are becoming vital aspects of this trend, with companies striving to obtain clean-label certifications. Natural food colorants such as bixin are witnessing growing demand because they are minimally processed, non-GMO certified, and easy to reformulate. For instance, Europe’s annatto market expanded from USD 67.3 million in 2018 to USD 70.8 million in 2019.
Segmentation Insights
Solvent extraction and emulsified annatto products dominate the market, primarily because of their extensive use in dairy applications. Annatto extract is classified as Generally Recognized As Safe (GRAS) and has received approvals from major global regulatory bodies such as the FDA, EU, and WHO. In 2019, the food industry represented 71.65% of the overall market share, with bakery, dairy, and beverage sectors being the primary application areas. Additionally, manufacturers are increasingly reformulating their offerings with natural colorants to improve the organoleptic qualities of their products.
Regional Insights
Annatto is the second most widely used natural colorant after caramel. Strong demand for bixin and norbixin highlights promising growth opportunities. Europe is expected to maintain leadership throughout the forecast period.
In North America, the U.S. remains the largest market, fueled by consumer preference for clean-label food ingredients. Asia Pacific is witnessing rising demand due to population growth and increased food consumption, while South America—particularly Peru, Brazil, Ecuador, and Bolivia—continues to be a major producer. The high profitability of annatto trade is expected to sustain production in this region.
Key Companies
- Givaudan SA (Switzerland)
- Archer Daniels Midland Company (U.S.)
- Chr. Hansen Holding A/S (U.S.)
- Sensient Technologies Corporation (U.S.)
- Kalsec Inc. (U.S.)
- Dohler Group (Germany)
- Dairy Connection, Inc. (U.S.)
- IFC Solutions (U.S.)
- Biocon Colors (India)
- Aarkay Food Products Ltd. (India)
Recent Industry Developments
- March 2020: Suja, a U.S.-based producer of organic, non-GMO, and cold-pressed beverages, launched a new juice line in collaboration with Whole Foods Market. The company incorporated natural colorants, including annatto, to expand its clean-label offerings.
Report Coverage
This report provides a detailed qualitative and quantitative analysis of the annatto market, including market size estimates, growth projections, and segmentation breakdowns. It also evaluates market dynamics, regional insights, and the competitive landscape. Key areas covered include recent mergers and acquisitions, regulatory frameworks, and evolving industry trends such as the rising demand for clean-label additives.
