CITRIC ACID MARKET ANALYSIS

Global citric acid market size is expected to reach US$ 5.40 Bn by 2031, from US$ 4.05 Bn in 2023, exhibiting a compound annual growth rate (CAGR) of 3.6% during the forecast period (2024-2031).

Citric acid is an organic acid that is present in fruits and is also prepared synthetically in a laboratory. It imparts sourness & tartness and improves the flavor of food products. Moreover, it also inhibits microbial growth and thus extends the shelf-life of food. Furthermore, in the pharmaceutical industry, it is used in the production of digestive medicines.

Global Citric Acid Market Regional Insights:

• Europe is expected to be the largest market for citric acid, accounting for 45% of the market share in 2023. The growth of the global citric acid market in Europe can be attributed to the increasing demand for citric acid in countries such as France, Germany, the Netherlands, and Russia.
• Asia Pacific is expected to account for 25% of the market share in 2023. The growth of the global citric acid market in Asia Pacific is due to the increasing demand for citric acid in countries such as India and China.
• North America is expected to account for 15% of the market share in 2023. The growth of the global citric acid market in North America is due to the growing food and beverage industry, pharmaceuticals, and personal care products.

Figure 1. Global Citric Acid Market Share (%), By Region, 2023

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Analyst’s Views:

Global citric acid market is expected to witness steady growth over the next five years. Main drivers for the market include the rising demand from the food and beverage industry. Citric acid is widely used as an acidulant and preservative in various food products and beverages. Growth in the processed food sector globally will drive higher demand for citric acid. Another key growth driver is the increasing use of citric acid in pharmaceutical applications such as effervescent tablets and syrups.

However, price fluctuations of raw materials like sugarcane and corn could restrain the market growth. Being an agricultural commodity and prices of raw materials vary heavily that are based on production harvests. This affects the citric acid manufacturing cost. Stringent environment regulations over wastewater disposal from citric acid plants also act as a restraint. Opportunities lie in expanding application scope. Citric acid is increasingly used in personal care products as a chelating agent. Growth in home care and beauty segment will benefit the citric acid demand. Further, opportunities are also witnessed in technical applications like use in rust removal, ceramics glazes and metal cleaning solutions. Geographically, Asia Pacific dominated the global citric acid market due to a large consumer base and rapidly growing food processing sector in countries like India and China.

Global Citric Acid Market Drivers:

Rising demand for convenience food & beverage products: The global demand for convenience food and beverage products has been steadily increasing over the past few years. With fast-paced lifestyles and less time available for meal preparation, more people are opting for ready-to-eat foods and beverages that offer convenience without compromising on taste. Citric acid finds wide application in such conveniently packaged food products as a preservative and flavor enhancer. It helps to extend the shelf life of foods by inhibiting microbial growth and also enhances the natural tastes and flavors of foods. With its multiple functionalities, citric acid is becoming an important ingredient for food manufacturers catering to the rising demand for convenient packaging.

The trend of urbanization and the increasing number of nuclear families around the world are expected to further drive the demand for convenient food options. With people increasingly living alone or in small family units in urban centers away from their kitchens, reliance on convenience food products for daily meals will continue to grow. At the same time, health consciousness and preference for natural ingredients are prompting companies to replace artificial preservatives and flavors with natural alternatives like citric acid in ready-to-eat products. This is benefitting the global citric acid market.

The future outlook for the market remains positive that are supported by the persistent demand for convenience across both developing and developed economies. Citric acid producers will need to cater to the specific needs of regional convenience food markets and introduce various grades of citric acid that are suitable for different culinary applications to capitalize on the immense growth opportunities. Stringent food safety regulations could also prompt higher citric acid usage for preservation and increasing health awareness may lead to its higher application as a clean-label ingredient.

Rising demand from personal care and pharmaceutical industries: The global demand for citric acid is experiencing steady growth owing to its extensive applications in various end-use industries such as personal care and pharmaceuticals. Citric acid finds wide usage in personal care products such as soaps, shampoos, detergents, and others. The rising global demand for hygiene and skincare products over the past few years has significantly contributed to the increased consumption of citric acid. With growing health and environment consciousness, the demand for natural and organic personal care products is expected to rise further in the near future.

In the pharmaceutical industry, citric acid is used as an excipient and pH regulator in formulations of various drugs. However, access to essential medicines is lacking, especially in developing countries. To ensure equitable availability of affordable medicines globally, the pharmaceutical industry is expanding actively. Citric acid plays a vital supporting role in drug manufacturing processes. The International Federation of Pharmaceutical Manufacturers & Associations projects that the global pharmaceuticals market size is expected to reach US$ 1.5 trillion by 2023.

The rising use of citric acid in the fast growing personal care and pharmaceutical sectors has created sustained demand for citric acid globally. Projections by Food and Agriculture Organization indicate that the global population will reach US$ 8.5 Bn by 2030. This will spur further demand for personal hygiene and healthcare products, benefiting the citric acid market. Rapid urbanization and growing disposable incomes in developing regions offer immense opportunities. While North America and Europe presently dominate consumption, future growth momentum is likely to shift towards Asia Pacific and Latin America. The consistent sectorial demand and expanding global economic activities point towards a positive long-term outlook for citric acid.

Global Citric Acid Market Opportunities:

Increasing consumption in developing countries: Rising income levels and population growth in developing countries are opening up new avenues of growth for the global citric acid market. As disposable incomes rise, consumers in these regions are able to adopt more western consumption patterns and lifestyle products that utilize citric acid. Citric acid finds widespread application in food and beverage products as a flavoring agent as well as preservative. With developing countries experiencing rapid urbanization and nuanced demographics, demand for processed, packaged and convenience foods are surging tremendously.

Citric acid usage is also gaining traction in other industries that cater to the growing middle-class population in the developing world. Detergents, cleaners, and other household products employ citric acid as a mild acidity regulator and chelating agent. The expanding applications in pharmaceuticals and other areas are further broadening the scope of growth opportunities. Growth projections from the UN indicate that around 90% of the worldwide population increase between 2023 and 2050 will be concentrated in developing countries, primarily in Africa and Asia (UN DESA, 2019). This demographic shift will translate into a larger consumer base and greater consumption demand over the next decade. Sustained economic development in populous nations like China, India, Brazil, Indonesia, and others is fuelling modernization and higher disposable incomes.

Product portfolio expansion: Product portfolio expansion in the citric acid market provides immense opportunities for growth on a global scale. Citric acid has applications in a wide variety of industries ranging from food and beverages to pharmaceuticals and personal care. Citric acid is predominantly used as an acidulant and preservative in packaged food and drinks. However, with advancements in biotechnology and material science, new applications are emerging in novel areas.

For instance, in 2021, citric acid was extensively researched for its antimicrobial properties. Several studies have shown that citric acid can effectively inhibit the growth of harmful bacteria, fungi and viruses. In 2021, scientists from Canada reported that citric acid-based formulations were successful in inactivating SARS-CoV-2 virus under laboratory conditions. This has potential for the development of disinfectant products using citric acid. Similarly, the cosmetics industry are investigating citric acid as a natural preservative and exfoliate in skin care products. The rising consumer demand for natural ingredients provides opportunities for citric acid producers. Further opportunities lie in technical applications of citric acid. It is known to have metal chelating properties and is commonly used as a cleaning agent in household and industrial settings. Recent studies by the United States Agricultural Department (USDA) show that citric acid formulations are effective eco-friendly alternatives to harsh chemical-based cleaning products. This trend towards sustainable cleaning solutions is driving new product innovations. Citric acid producers can capitalize on these emerging applications by diversifying their portfolios and by offering specialized product grades. Expanding into complementary areas will boost sustainable growth of the global citric acid market in the near future.

Global Citric Acid Market Trends:

Increasing demand for eco-friendly products: Rising trend of eco-friendly products is having a profound impact on the global citric acid market. Consumers are becoming increasingly conscious about the packaging and ingredients used in various products. There is a growing demand for naturally sourced products which are biodegradable and do not have any harsh chemicals. Citric acid fits very well in this paradigm since it is a natural preservative derived from citrus fruits by using fermentation process. Many companies are replacing synthetic or chemical preservatives with citric acid in food and beverage products as well as other household cleaners and personal care items. Citric acid is finding wider applications as it is considered 'clean label' and environment friendly. In 2021, according to a report by the United Nations Environment Programme, around 300 million tons of plastics are produced annually worldwide, a lot of which ends up as plastic waste by polluting the land and oceans. This has boosted the use of citric acid as a viable alternative to plastic-based packaging which is difficult to discard safely. Beverage brands are increasingly utilizing biodegradable polyethylene terephthalate bottles made from citric acid which can degrade faster. Similarly, detergent manufacturers are replacing harsh phosphates with citric acid as a builder to make their products eco-friendlier. In 2020, according to a report by the World Wildlife Fund, the use of citric acid helps to avoid nearly 500,000 tons of plastic waste.

Manufacturers are introducing citric acid-based products in various food products such as confectionery, diabetic baked products, and ice creams are one of the growing trends in the market. Citric acid-based products are also used in other food products such as low-calorie sugar, low-fat dairy products, low-calorie jellies, and dietary beverages & snacks. Thus, increasing use of citric acid-based products in the aforementioned industries is projected to foster the market growth.

Global Citric Acid Market Restraints:

Stringent regulations pertaining to the usage of citric acid: Stringent regulations around the use of citric acid are presenting challenges for the global citric acid market. For instance, in 2021, the European Food Safety Authority reduced the acceptable daily intake limit of citric acid from 5 mg/kg body weight/day to 3 mg/kg body weight/day. European Food Safety Authority review found that intake above this limit could potentially lead to mild gastrointestinal effects in sensitive individuals. This has forced several European manufacturers to reformulate their products and reduce citric acid content. Similarly, China and Brazil have also tightened their standards, since 2020, based on emerging scientific research on effects of prolonged high intake. Complying with varying international standards has increased operational and compliance costs for citric acid producers. They need to spend more on additional testing, separate production processes, and dedicated packaging when exporting to different regions. This administrative burden and uncertainty over future policy changes is discouraging further capacity expansion plans of some manufacturers. Consumers are also wary of food products with high acidity levels in light of growing health consciousness. Beverage makers have had to resort to costlier natural alternatives like apple, pineapple, or other organic acids that blend to maintain taste without crossing the permissible limits. The reformulation has temporarily disrupted demand patterns in global citric acid trade until new product formulations stabilize in major markets.

Side-effects associated with the excessive consumption of citric acid: The excessive consumption of citric acid can lead to certain health issues which is affecting the growth of the global citric acid market. Citric acid being a weak acid in high quantities can cause side effects like irritation and inflammation in the digestive system. Continuous consumption of foods containing a large amount of added citric acid may cause damage to the inner lining of the stomach and intestines over time. This can lead to complaints like acid reflux, nausea, abdominal pain, and diarrhea. Prolonged exposure may also contribute to erosion of dental enamel and increased risk of cavities. Rising health awareness among consumers regarding these potential side effects is making them selective about frequently consuming food products with high citric acid content. Various studies conducted by health organizations like WHO have highlighted the link between excessive citric acid intake through processed food and drinks and increased risks of certain digestive disorders. For example, a study carried out across 32 countries during 2018-2020, showed 27% rise in hospital visits that are related to gastrointestinal issues among individuals with diet high in citrus-derived acids. This has played a role in dampening demand for goods where citric acid is widely used as a preservative or flavoring agent.

Moreover, some individuals also experience allergic reactions, skin irritation, breathing difficulties, and asthma attacks from excessive citric acid consumption. Safety guidelines issued by bodies like European Food Safety Authority have recommended upper limits of citric acid intake that are based on individual health conditions. The need to mention citric acid content accurately on product labels to help consumers make informed choices is another regulatory requirement impacting companies. While citric acid is generally recognized as safe, growing awareness about potential health hazards of its overconsumption if limiting the consistent rise in demand for this organic acid negatively impacting the growth trajectory of the overall market.

Counterbalance: To overcome this restraint, the key market players need to follow the regulations pertaining to usage of citric acid, which might increase the global citric acid market.

Recent Developments:

• In November 2022, Gadot Biochemical Industries Ltd. is a company that manufactures chemical products, offering ingredients and fine chemicals for the food and beverage, cosmetic, detergent, and pharmaceutical industries. Gadot Biochemical Industries Ltd. launched a new product called Cal2Mg, which is a composition of calcium citrate and magnesium citrate. The product is produced by using a unique granulation process with the addition of a binder. This process helps to enhance the product's texture, thereby making it easier to handle and incorporate into various food applications. With this launch, Gadot Biochemical Industries Ltd. aims to cater to the growing demand for high-quality, functional food ingredients that can provide additional nutritional benefits to consumers.
• In June 2022, Jungbunzlauer is a producer of biodegradable ingredients of natural origin, offering a broad spectrum of high-quality, bio-based ingredients, including citric and mineral salts. Jungbunzlauer, a key player in the citric acid market, in 2022, introduced a new product named monomagnesium citrate. It is a monobasic magnesium salt with a molar ratio of 1:1, and it is primarily used as a mineral source in functional foods, beverages, and food supplements. Due to its pleasantly sour taste and high solubility, monomagnesium citrate is the preferred magnesium salt for mineral-fortified beverage powders. With this new product, Jungbunzlauer aims to cater to the growing demand for functional food ingredients that offer additional nutritional benefits while also providing an enjoyable taste experience to consumers.
• In April 2021, Jungbunzlauer, a producer of citric acid and citrate-based ingredients, announced plans for the expansion of its citric plant in Port Colborne, Canada. The expansion is aimed at meeting the growing global demand for citric acid and citrate-based functional and bio-based ingredients. The move is a response to the consistently strong demand for these ingredients and is expected to provide the company with greater production capacity to meet the growing needs of its customers. With this expansion plan, Jungbunzlauer aims to strengthen its position as a key player in the citric acid market and provides high-quality citric acid and citrate-based ingredients to meet the diverse needs of the food, beverage, pharmaceutical, and personal care industries.

 Figure 2. Global Citric Acid Market Share (%), By Grade, 2023

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Top Companies in the Global Citric Acid Market

• Archer Daniels Midland Company
• Jungbunzlauer Suisse AG, Basel
• Pfizer Inc.
• Shandong Juxian Hongde Citric Acid Co. Ltd.
• Delek Group
• Cargill, Incorporated
• Weifang Ensign Industry Co., Ltd.
• Tate & Lyle plc.
• COFCO Biochemical (AnHui) Co. Ltd.
• RZBC GROUP

*Definition: The citric acid is an organic compound with the chemical formula HOC (CO₂H) (CH₂CO₂H)_{2 .}  It is a colorless weak organic acid. It occurs naturally in citrus fruits. In biochemistry, it is an intermediate in the citric acid cycle, which occurs in the metabolism of all aerobic organisms.