(Food-Beverage-News.Com, June 09, 2021 ) According to MarketsandMarkets, the global nut products market size is estimated to be valued at USD 1.5 billion in 2020 and is projected to reach USD 2.0 billion by 2025, recording a CAGR of 5.8%. The growing inclination of consumers towards plant-based and gluten-free products coupled with increasing health awareness is promoting the market. The product launches by key players belonging to key application sectors such as bakery and confectionery is also driving the growth of the market.
The volatile market demand for nut-based end products belonging to categories, such as snacks, dairy, bakery, and confectionery during the pandemic has negatively affected the nut products supply chain. A decent growth projection is expected in the consumption dynamics of products containing nuts as a major ingredient. Supply chain actors in the nut products market are gearing themselves to cater to unexpected spikes after lukewarm demand for nuts and their value-added products. Disruptions in supply chain during the COVID-19 lockdown across countries were challenging for the market.
Drivers: Rising health awareness led to evolving dietary patterns
The increasing consumer health awareness and the rising disposable income across regions are factors that have encouraged people to opt for high-quality nut products. The changing consumer preferences for convenience products with health and wellness claims have led to high demand for nut products. The increasing health concerns and awareness have led to an evolving consumption pattern. Nut-based derivatives, such as pastes and butter, are increasingly utilized in a plethora of baked confections, especially in European and North American markets.
Restraints: Availability and fluctuating costs for nuts as raw material
The raw material for nut products is agri-commodities that witness high uncertainties in their prices and availability. Exotic and uncommon nuts are harder to obtain, given their fluctuating yields. Ingredient manufacturers utilizing nuts as a raw material requires a carefully planned inventory management system in place, which is usually not the case, especially for small and medium-scale manufacturers. Hence, the process for converting nuts into value-added products, such as butter, pastes, and fillings, becomes cost-intensive, and this high cost trickles down to processed food & beverage manufacturers that is ultimately passed on to end-consumers.
Opportunities: Expanding application spectrum for nuts and derivatives
The robust growth and promising potential in plant-based dairy alternatives and meat analogs have opened up significant opportunities for nut product manufacturers. Key giants such as Olam International and Barry Callebaut have already intensified their efforts in catering to these attractive end-use avenues for gaining a cutting-edge advantage in the foreseeable future.
Nut-based butter, paste, fillings, and flour are increasingly utilized across applications, among which bakery and confectionery are the dominant ones. Nut flour and paste are also incorporated for the development of plant-based savory products. Almonds, hazelnuts, and walnuts are some of the key sources of raw materials, which are processed into semi-finished derivatives.
Challenges: Supply chain management intricacies and quality of nut products
One of the crucial challenges in the growth of the nut products market is the quality and safety issues as the product travels through different junctures in the supply chain. Lacunae on the part of handling, distribution, transportation, and intermediate storage can cause serious implications on the overall quality of nut products. Raw material suppliers, nut product manufacturers, distributors, and other supply chain stakeholders must work as a coherent whole to avoid any lapses, thereby ensuring end-use industries receive quality ingredients with a high degree of safety profile.
Europe is projected to dominate the global market by 2025
The European region is projected to record a higher growth rate during the forecast period. Consumers in this region are witnessing a high demand for natural and low-sugar ingredients, and food products, resulting in a surge in nut product consumption. The trend of using natural and trusted ingredients is reflected in the increasing use of ‘clean labels,’ with other health-related claims such as ‘gluten-free.
Key players in this market include Olam International (Singapore), Barry Callebaut (Switzerland), Blue Diamond Growers (US), Zentis GmbH & Co. KG (Germany), Mount Franklin Foods (US), Kerry Group (Ireland), Mandelin, Inc (US), Bazzini (US), Besana (Italy), Lubeca (Denmark), and Puratos (Belgium). These major players in this market focus on increasing their presence through expansions, mergers & acquisitions, partnerships, joint ventures, and agreements. These companies have a strong presence in North America, Asia Pacific, and Europe. They also have manufacturing facilities, along with strong distribution networks across these regions.