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 emerged as the leading region, accounting for 36.02% of the global market share in 2019. Meanwhile, the U.S. annatto market is anticipated to expand notably, reaching approximately USD 74.22 million by 2032, supported by growing adoption across the food & beverage and personal care industries.

Annatto, derived from achiote seeds, is one of the oldest naturally sourced colorants used by humans. It serves as a popular natural food-grade dye and is gaining traction in both food and non-food sectors. Regulatory authorities, including the U.S. Food and Drug Administration (FDA) and the European Food Safety Authority (EFSA), have recognized annatto as a safe additive and coloring agent, further bolstering its demand.

Information Source: https://www.fortunebusinessinsights.com/industry-reports/annatto-market-101592

COVID-19 Impact

The COVID-19 pandemic created multiple obstacles for the annatto market, primarily due to supply chain disruptions and factory shutdowns. Transportation limitations and higher logistics expenses negatively affected production and distribution. Furthermore, lockdowns significantly reduced demand from the foodservice sector, one of the primary consumers of colorants. However, as global supply chains recover and packaged food consumption continues to rise, the market is expected to regain steady growth momentum.

Market Trends

Clean-Label Demand Fueling Market Expansion

Growing consumer interest in clean-label and naturally sourced ingredients has become a key catalyst for market growth. Shoppers are increasingly favoring products that are non-GMO, minimally processed, and sustainably produced. Components like bixin are witnessing surging popularity due to their versatility and natural origin. Reflecting this shift, Europe’s annatto market rose from USD 67.3 million in 2018 to USD 70.8 million in 2019, highlighting a clear trend toward natural colorants.

Segmentation Insights

Among product types, solvent-extracted and emulsified annatto hold a dominant position, particularly in dairy applications. The ingredient is classified as Generally Recognized As Safe (GRAS) and has received validation from major regulators such as the FDA, EU, and WHO. In 2019, the food industry accounted for over 71.6% of total annatto usage, with strong demand from dairy, bakery, and beverage segments. Additionally, manufacturers are reformulating their product lines using natural additives to enhance flavor, color, and visual appeal.

Regional Insights

Annatto is the second most widely used natural colorant globally, trailing only caramel. Increasing demand for bixin and norbixin continues to enhance global growth opportunities.

• Europe: Expected to remain the dominant regional market throughout the forecast period.
• North America: The U.S. leads the region, driven by growing consumer inclination toward clean-label foods.
• Asia Pacific: Experiencing robust growth due to rising population, urbanization, and expanding food consumption.
• South America: Countries such as Peru, Brazil, Ecuador, and Bolivia serve as major production centers, benefiting from high profitability and raw material availability.

Key Market Players

• Givaudan SA (Switzerland)
• Archer Daniels Midland Company (U.S.)