Licorice Extract Market – Investments toward Extraction Technology Remains a Coveted Strategy
Once popular as a weed, then as a concoction, and now being a legit natural sweetener, licorice extract has been making a prominent mark for itself in numerous industries. According to an exclusive study published by Transparency Market Research (TMR), the licorice extract market will remain relevant in pharmaceutical, tobacco, and food & beverage industries with its steady gait, and is anticipated to record a value of ~US$ 2.9 Bn by 2029, up from ~US$ 1.9 Bn in 2019.
Insights from the study show that, individuals with medical conditions such as obesity, diabetes, and high cholesterol account for a substantial share of the demand for licorice extract, with popular consumables being in the form of toothpastes, chewing gums, or sweeteners. As the once covert health benefits of licorice extract come to light, pharmaceutical and nutraceutical industries find an attractive market for penetrating nutritional products and dietary supplements to consumers seeking natural products to maintain their health.
Gaining a sense of enormous sales potential of licorice extract, companies are devising numerous product-level strategies to scale up their businesses. Among them, increasing the effectiveness of extraction technology remains a coveted strategy in the licorice extract market.
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Cost-efficiency of Synthetic Sweeteners Could Impact Sales of Licorice Extract
Given the health implications regarding obesity and diabetes, medical personnel recommend individuals to control their sugar intake, which augurs well for low-calorie sweeteners. Being at the lower end of the price scale, the penetration of synthetic sweeteners has been growing, while the shift to natural sweeteners is currently only in its infancy stage.
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Despite the switch of consumers toward organic products, end-use industries continue their high-scale adoption of artificial sweeteners. Take for instance the food and beverage industry. As the industry continues to experiment with unique flavors, the use of artificial sweeteners remains constant. The wide availability of artificial sweeteners in various forms such as cubes, granules, paste, liquid, and powder, alongside their cost-effectiveness, is likely to exert a negative influence on the sales of licorice extract.
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Microencapsulation – Key to Achieve Multiple End-use Applications
In order to match the pace of the ever-evolving preferences of consumers, manufacturers find themselves hard-pressed to bring innovative products to the table, and microencapsulation has lately acquired a significant amount of traction. Manufacturers are investing in microencapsulation technologies to protect the sweet sensation promoted by licorice extract. This technology especially finds huge prominence in the production of sugar-free chewing gums and chewable confections to prolong their sweet flavor during chewing.
As per the consumption trend, the powdered form of licorice extract will remain preferable over cubes and paste, given the ease of shipment and long shelf life. However, the preference for licorice extract in the semi-fluid form is likely to grow at an exponential rate, as end-use industries show a marked proclivity for readily-soluble forms.
Another striking feature of the market that players need to focus on is the large-scale adoption of licorice extract in the tobacco industry. The potential of licorice extract as a de-bittering agent is likely to drive sales in the tobacco industry. However, the food and beverage industry will continue to account for a leading share in the licorice extract market during the forecast period.
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Analysts’ Take on the Future of the Licorice Extract Market
Authors of the study maintain an optimistic outlook on the future growth of the licorice extract market. Growing cognizance regarding the benefits of licorice extract will remain a key success factor to achieve high revenue influx. Moving beyond the traditional scope of application, licorice extract remains sought-after in the cosmetics and personal care industry, which will catalyze revenue from consumers seeking skincare and hair care products that are developed using natural ingredients. Though the high popularity and deep penetration of synthetic sweeteners could dim the revenue prospects of the landscape, running awareness campaigns that stress on the benefits of natural sweeteners over their synthetic counterparts could help manufacturers in diverging demand towards their products.
- According to Transparency Market Research’s latest market report on the licorice extract market for the historical period of 2014-2018 and forecast period of 2019-2029, globally, revenue generated by the licorice extract market has been estimated to be US$ ~1.9 Bn in 2019, and is expected to expand at a CAGR of ~4% in terms of value throughout the forecast period.
North America Stands Out in Licorice Extract Market in Terms of Sales and Growth
- The production of licorice extract has been high in Europe, followed by North America. However, consumption-wise, the U.S. has been significant in the licorice extract market. The U.S. has the highest consumption of licorice extract, and is also projected to enjoy substantial growth in the licorice extract market during the forecast period. This is due to the demand for organic products being high in North America, and consumers being highly aware of the products that are being launched in the market.
- In South Asia and East Asia, the demand for licorice extract remains low due to many reasons, the main being unawareness and the high price of licorice extract. However, demand is expected to rise in the coming years at a high growth rate. The consumption of licorice extract is high in the Middle East in the foodservice sector, as consumers are willing to pay premium prices for clean label products.
Food & Beverage Industry Main Driving Force for Licorice Extract Market Growth
- Manufacturers are also gradually shifting towards the use of licorice extract instead of conventional ones. This change is with respect to the changing consumer demand for clean label products, and demand for transparency in the supply chain of the products that they consume.
- Increasing awareness among the population is paving the way for trends such as organic, non-GMO, and many more.
- Pharmaceuticals, tobacco, and food and beverages are the key application areas for licorice extracts. The demand for these extracts has been greater in the food and beverage industry, and this is projected to continue over the coming years as well.
Health Attributes of Licorice Extract Influencing Purchase Decisions of Consumers
- Consumers are more interested in products that have certifications and claims such as organic, non-GMO, made from vegetables, etc., as compared to the regular products that are available in the market.
- 28% of the consumers in the U.S., who shop for food and beverages, look for the ‘organic’ label on products. Thus, the licorice extract market has been on the rise owing to the rising demand of clean label products among consumers.
Manufacturers Re-branding Licorice Extract Products to Attract More Consumers
- The marketing of products has become very essential to aid consumers in knowing about the various products that are available in the market. It is very crucial to recognize the needs of consumers and project various products accordingly to fulfill the same.
- Thus, licorice extract manufacturers are re-branding their products and improving their marketing strategies for them. Also, unique brand images are being created for these licorice extract products, which has led to consumers knowing the brand rather than the company.
High Prices Restraining Licorice Extract Market in Developing Countries
- Price remains the major factor that is hindering the growth of the licorice extract market in developing countries. Licorice extract, which is priced higher, enjoys healthy sales in North America and Europe. However, in developing countries such as Mexico, India, Turkey, China, etc., the demand for licorice extract is comparatively low.
- This is due to comparatively lower disposable income and consumer awareness in these regions. However, in the coming years, the demand for licorice extract in Asia Pacific is expected to gain traction at a growth rate of more than ~16% in terms of value.
Licorice Extract Market: Competitive Landscape
- Manufacturers such as
- Norevo GmbH
- F&C Licorice Ltd.
- Mafco Worldwide LLC
- Zagros Licorice Co.
- VPL Chemicals PVT Ltd.
- SepidanOsareh Co.
- ASEH Licorice MFG & Exp. Co.
- Maruzen Pharmaceuticals Co. Ltd.
- Zelang Group
- Ransom Naturals Ltd.
- Are the key players operating in the global licorice extract market.
