The global annatto market was valued at USD 196.55 million in 2019 and is forecasted to reach USD 361.39 million by 2032, registering a CAGR of 4.71% during the study period. Europe held the dominant position in 2019, representing 36.02% of the total market share. In contrast, the U.S. annatto market is expected to grow significantly, projected to hit nearly USD 74.22 million by 2032, supported by rising usage across the food & beverage and personal care sectors.

Annatto, derived from achiote seeds, stands among the oldest naturally sourced colorants known to humans. It is widely utilized as a natural food-grade dye, gaining steady adoption across both food and non-food industries. Moreover, it has received safety approval from key regulatory authorities such as the U.S. Food and Drug Administration (FDA) and the European Food Safety Authority (EFSA), which has further strengthened its market appeal.

The outbreak of COVID-19 posed major challenges to the annatto industry due to supply chain interruptions and temporary manufacturing shutdowns. Restrictions on transportation and rising logistics costs affected both production and distribution activities. Additionally, the decline in demand from the foodservice sector—a major consumer of natural colorants—negatively impacted sales. Nevertheless, with global logistics stabilizing and the demand for packaged and processed foods rebounding, the market is anticipated to recover and expand consistently in the coming years.

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

Market Trends

Rising Demand for Clean-Label Ingredients Driving Growth

The growing consumer preference for clean-label and naturally derived products has emerged as a major growth driver. Modern consumers are increasingly choosing non-GMO, minimally processed, and eco-friendly ingredients. Compounds such as bixin are gaining strong market traction due to their natural origin and adaptability across applications. This shift is evident in Europe, where the annatto market increased from USD 67.3 million in 2018 to USD 70.8 million in 2019, highlighting the steady transition toward natural colorants.

Segmentation Insights

Among the various product types, solvent-extracted and emulsified annatto dominate the market, primarily due to their widespread use in dairy products. The ingredient is classified as Generally Recognized as Safe (GRAS) and approved by leading regulatory agencies including the FDA, EU, and WHO.

In 2019, the food industry accounted for over 71.6% of total annatto consumption, with strong demand stemming from dairy, bakery, and beverage applications. Furthermore, many food manufacturers are reformulating their products using natural colorants to improve appearance, taste, and consumer appeal.

Regional Insights

Annatto ranks as the second most commonly used natural colorant worldwide, following caramel. The increasing demand for bixin and norbixin continues to create lucrative growth opportunities across regions.

• Europe: Expected to retain market leadership throughout the forecast period.
• North America: The U.S. remains a key market, driven by the shift toward clean-label and natural foods.
• Asia Pacific: Witnessing rapid expansion due to urbanization, population growth, and increasing food consumption.
• South America: Countries such as Peru, Brazil, Ecuador, and Bolivia act as major production hubs due to abundant raw materials and high profitability.

Key Market Players

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