Cochineal is an oval-shaped scale insect used to derive a natural colorant, crimson or carmine dye. The insects produce carminic acid, which is further extracted from the female insect bodies and eggs to make carmine dye. Cochineal insects are natives to tropical and subtropical parts of South America, Peru, and Mexico. These insects survive on the nutrients and moisture from the cacti. Carmine dye is primarily used as a natural colorant in food and beverages and cosmetics products.
After the emergence of synthetic colorants in the early 20th century, the use of natural pigments and dyes shrank. Most of the artificial color additives are toxic and carcinogenic, while natural color additives are highly beneficial for health as they are composed of a wide range of essential nutrients. Severe health concerns over synthetic/artificial food color additives increased the demand for natural colorant additives and propelled the cochineal extract market.
The norms and regulations on chemical content in artificial color additives have promoted natural food color additives, therefore making cochineal insect cultivation profitable again. The food color additives market has witnessed significant changes after the emergence of ISO 22000, therefore encouraging enhanced food safety. Major regulatory bodies such as the European Food and Safety Authority (EFSA) and the Food and Drug Administration (FDA) have banned several artificial color additives.
Cochineal insects can be cultivated with two farming methods — controlled and traditional. Traditional farming is carried out by planting infected cactus pads on the compatible cacti species with cochineals, harvesting it by hands. At the same time, the controlled method uses small size baskets placed on the compatible cacti species. The basket comprises fertile female cochineal insects that later leave the basket and settle on the cacti.
The complete cycle continues for three months, and later new cochineal insects begin the cycle again. It is estimated that approximately 80% of the cochineal insects' production is done by traditional farming while balanced is produced from controlled plantations. Usually, cochineals insects are found in subtropical parts of South America and Mexico; they have been introduced in several other countries, including Spain and Australia. Existing cochineals insects cultivators in South America are also focusing on the growing cultivation of insects to cater to rising demand.
Food and beverage companies are focusing on health and nutrition, along with consumer taste and preferences. Appearance, textures, smells, and colors play a significant role in increasing impulse purchases. At the point of purchasing, the buyer focuses on appearance characteristics while making purchasing decisions. The color of the food products is considered one of the most delightful and impressive attributes that directly impact the section, preference, and stimulate consumers' eating desires. Undoubtedly, consumers' perceptions, desires, and opinions are utilized to market the products. Hence, more appealing and delightful food products have been offered continuously. Moreover, color additives are used to distract the consumer's attention from the food product's unpleasant characteristics.
Cochineal extract competes with a vast array of manufactured and several natural color additive products, expected to hamper cochineal extract demand. Natural color additives comprised several products, including paprika oleoresin, turmeric oleoresin, lycopene, enocianina, carotenoids, spirulina extracts, and chlorophyll, among others. Artificial color additives are also used as a flavoring agent, which slightly reduced the raw material and processing cost.
Geographically, the global cochineal extracted market is segmented into North America, Europe, Asia Pacific, Central, and South America and the Caribbean, the Middle East, and Africa.
North America is expected to hold a significant share of the global cochineal extracted market, powered by the rising demand from the U.S. and Mexico's food processing industry. In light of busy schedules, consumers in the region are frequently consuming readily to eat packaged food instead of a conventional meal, which leads to the rising demand for packaged food. Moreover, to capture the higher market share, several major food processing companies widen their portfolios with natural additives to attract a large consumer base. According to a report published by the U.S. Census Data and Simmons National Consumer Survey (NHCS), In 2018, 238.94 million Americans used bagged and packaged salads. The increasing demand for natural additives and ingredients in packed foods is a key trend observed in the regional market.
Central and South America and the Caribbean is witnessing steady growth in the cochineal extract market. This is imputed to increasing supply and demand for cochineal extract from the bakery and beverages industry. Central and South America and the Caribbean comprise of the largest cochineal extract producers in the world, which ultimately supports the growth of the cochineal extract market in the region.
Asia-Pacific is anticipated to be the fastest-growing packaged food market and is predicted to increase natural color additives' consumption during the upcoming years. China and India play a vital role in terms of supply and demand. An increasing number of working women populations has had a considerable impact on the demand for packed food products in emerging economies such as India and Indonesia. In addition to this, evolving lifestyles, rapid urbanization, and rising disposable income have resulted in increased packaged foods. China's packaged food market has observed remarkable growth since the last two decades by introducing millions of products by thousands of food manufacturers and processors in the country. Additionally, increasing health awareness among people has compelled the food processors to adopt natural additives such as cochineal extract.
Europe is anticipated to witness considerable growth for the cochineal extract market during the forecast period. This is attributed to the rising consumption of cochineal extract in pharmaceutical products. The unique characteristics of the cochineal extract have created lucrative opportunities in pharmaceutical sectors. Cochineal extract is used to make pharmaceuticals aesthetically appealing and distract the consumers form unpleasant characteristics such as bad smell and taste of the products. Major pharmaceutical markets such as Germany, Italy, Spain, and the U.K. promote the greater demand for the cochineal extract in the region.
The Middle East and Africa cumulatively hold very niche shares in the global cochineal extract market; however, they are projected to witness a growing demand during the forecast period for cochineal extract compared to the last few years. The packaged food market is the major consumer of cochineal extract in the region.
The global cochineal extract market is dominated by the local Peruvian and Mexican companies; however, some of the prominent players in the market are Gentle world, DDW The Color House, Chr Hansen Holding A/S, Xian LiSheng-Tech Co., Ltd, Sensient Technologies Corporation, Naturex, Roha Dyechem Pvt. Ltd., BioconColors, ColorMaker, Inc., and Colores Naturales EIRL, Lake Foods among others.