Citric acid, a mild organic acid, is widely recognised for its natural preservative and flavor-enhancing properties in foods and beverages. In addition to being extracted predominantly from citrus fruits such as lemons and oranges, it is widely used in pharmaceuticals, cosmetics, and industrial applications. While the citric acid market flourished in 2023, it is essential to comprehend the forces driving its expansion and the obstacles it confronts. The citric acid market is anticipated to expand at a 4.6% CAGR between 2024 and 2032.
Because citric acid is widely used in the food and beverage industry, its market has grown substantially. Its ability to extend the shelf life of products, coupled with its acidic flavour that enhances a variety of foods, makes it an indispensable component in a vast array of products. Many beverage producers, for instance, have acknowledged that citric acid helps maintain the pH level, thereby ensuring flavour consistency. In addition, the increase in the consumption of processed and packaged foods has further boosted demand. Leading food brands have increased their citric acid content in response to evolving consumer interests and preferences, which provides supporting evidence.
Citric acid has found its niche as a cleansing agent as the world shifts towards eco-friendly and sustainable products. Its organic composition and effective cleaning properties, especially with regard to removing hard water stains and internal rust, have increased its demand in domestic and industrial cleaning. Citric acid is conspicuously listed as an active ingredient in green cleaning products, as evidenced by product labels and advertising campaigns emphasising "chemical-free" cleaning.
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Citric acid is gaining popularity in the cosmetic and personal care industries due to its pH-adjusting and astringent properties, as well as its ability to promote skin exfoliation and re-growth. Increased consumer awareness of the constituents in their skincare products and the desire for products with minimal chemical content have brought citric acid to the forefront. A cursory inspection of popular skincare forums and platforms reveals that users praise the incorporation of citric acid into their skincare regimens, attesting to its efficacy in skin rejuvenation.
The environmental concerns associated with the production of citric acid are one of the market's greatest obstacles. Aspergillus niger (a fungus) that feeds on a sugar substrate derived from molasses or maize starch is utilised in the production process, which is predominately fermentation-based. This method, despite being effective, has raised eyebrows due to the immense quantities of water and waste it generates. The water consumption in certain regions with a water shortage has sparked local discontent. In certain regions, local news reports and grass-roots campaigns have highlighted these concerns and called for more sustainable production methods.
In 2023, the liquid and powder forms of citric acid were the two leading market competitors. The liquid form, renowned for its simplicity of incorporation, particularly in beverage production and pharmaceuticals, generated substantial revenue. The primary benefit of this form was its direct usability, which eliminated the need for any preparatory procedures, making it an attractive option for industries that prioritise rapid production. However, the powder form of citric acid followed shortly thereafter. Its widespread use in food preservatives, cleaning agents, and cosmetics allowed it to maintain a substantial market share. Additionally, its prolonged shelf life and transportability contributed to its increased demand. The versatility of the powder form segment was demonstrated by its widespread adoption across numerous industrial sectors, making it the segment with the highest CAGR in 2023.
In terms of application, the Pharmaceutical, Food & Beverage, and other industries were the key revenue generators for the citric acid market. The Food & Beverages industry was the largest revenue contributor in 2023, driven by the ever-increasing demand for preserved foods and beverages as well as the crucial role citric acid plays as a preservative and flavour enhancer. The Pharmaceutical industry, on the other hand, was the dark horse, recording the highest CAGR. This segment is expected to maintain its growth trajectory from 2024 to 2032, as citric acid's function in stabilising active pharmaceutical ingredients and its use in effervescent tablets become increasingly recognised.
Asia-Pacific (APAC) came out geographically as the region that contributed the largest percentage to the revenue in 2023. This dominance was fuelled by the massive consumer base and the rapid expansion of the food & beverage and pharmaceutical industries in countries such as India and China. However, Europe, with its stringent food safety regulations that promote natural preservatives, demonstrated the highest CAGR, indicating that Europe may emerge as a formidable competitor for APAC in the future years.
In terms of competitive trends, the citric acid market in 2023 was dominated by a handful of significant competitors. Among them are Pfizer, Inc., Tate & Lyle PLC, Danisco A/S, Cargill, Incorporated, Kenko Corporation, ADM and Jungbunzlauer Suisse AG, to mention a few. Expansion, mergers, and the development of eco-friendly production methods dominated their strategies. Their research and development departments were bustling with efforts to increase yield, reduce production costs, and ensure sustainable production. In anticipation of an even more competitive market from 2024 to 2032, it is anticipated that these actors will continue to innovate and possibly steer the market into uncharted territory.
