Starch and Starch Derivatives Market - Growth, Trends, and Forecasts (2022 - 2027)

The global starch and starch derivatives market is projected to register a CAGR of 5.40% during the forecast period, 2022-2027.

The demand for modified starches has been increasing in parallel to the rapid development of the food industry. Modified starches offer a tremendous number of functional benefits to a variety of foods, such as bakeries, snacks, beverages, as well as nutritional foods.

Also, naturally derived rice starches have strong freeze-thaw, acid, and process stability, making them ideal for use in packaged sauces, as well as frozen products. As a natural fat replacer, rice starch brings creaminess to low-fat versions of dairy desserts, ready meals, soups, and sauces, as well as fillings.

The COVID-19 pandemic placed unprecedented stresses on food supply chains, with bottlenecks in farm labor, processing, transport, and logistics, as well as momentous shifts in demand. The effect on the agricultural sectors, including corn, potato, tapioca, and wheat, followed by its intermediate product, such as starches, is marginal, owing to the support of the government that ensured that the supply chain function smoothly in the face of the crisis by stabilizing the food systems, thereby supporting both food security and nutrition. According to the World Bank, the import of legumes (including peas) and pulses from January 2019 to February 2020 declined by 6%, owing to supply chain disruptions, followed by export restrictions. The export restrictions have a direct impact on the prices of the agricultural commodities, comprising all the raw materials, which is expected to automictically have a negative price effect on its processed ingredients, including industrial starches.

Key Market Trends

Growing Food Processing Sector Globally

Starch derivatives with high tolerance to processing conditions are expected to be increasingly incorporated in the specialty applications, such as functional foods, pharmaceutical solutions, as well as sophisticated paper-based applications. The general health and wellness trend has provided the starch market with a distinct direction for new product development, which includes a clean label and exhibits enhanced functionality.

Furthermore, owing to the high incidence of obesity, there is an increasing demand for healthy foods and beverages among consumers, which further fuels the demand for starches in convenience and processed foods. According to a survey by Office for National Statistics (UK), the sales volume of potato starch increased to approximately 38.9 million tons in 2020.

Additionally, manufacturers are investing in developing clean label solutions, owing to the growing demand for clean label food products among consumers across the world. Such factors are anticipated to drive market growth in the coming years. For instance, in March 2020, Tate & Lyle expanded its line of Claria clean label starches and launched Claria Everlast. The starch is designed to solve formulation challenges related to refrigerated and freeze thaw stability in categories, such as frozen meals, sauces, and yogurts. The ingredient is not-GMO and has a clean taste and neutral color.

Asia-Pacific is the Fastest Growing Region

The starch and starch derivatives market in Asia-Pacific is experiencing rapid expansion due to the growing demand for non-GMO and organic ingredients in the region has led the manufacturers to introduce new lines of specialty starches, especially for applications in the food industry, including dressings, sauces, bakery fillings, ice creams, yogurt, soups, bakery items, beverages, meat, and dry sausages. There has been a significant increase in the demand for all forms of ready-to-eat or convenience food and beverage products, owing to increasingly busy lifestyles and the rising working population in the countries of Asia-Pacific. The food processing industry is thus expected to have significant growth and generate new opportunities for investment and exports for these developed countries.

The application of modified starch in varied applications is widely contributing to the Chinese market. It aids in thickening or stabilizing food products, especially sauces. Thus, with the rising market for sauces and condiments, the starch and starch derivatives market is also growing at a faster pace. For instance, in April 2021, Cargill partnered with Starpro, a key food grade tapioca starch producer in Thailand, and expanded its specialty tapioca starch offerings in the Asia-Pacific region. The collaboration is expected to support the product processing requirements of food manufacturers and meet the sensory expectations of consumers.

Competitive Landscape

The global starch and starch derivatives market is highly fragmented, with many local and international players in the market. The key players in the market are Tate & Lyle PLC, Cargill Incorporated, Archer Daniels Midland Company, Ingredion Inc., and Roquette Freres among others. These companies have set their focus on research and development, expansion, partnership, and innovation, in order to retain their position within the market or gain an advantage over their competitors. Additionally, companies are focusing on expanding their network of innovation centers, which enables them to collaborate with customers for new product development and reformulations, as well as make investments accordingly.​ For instance, in January 2021, Cargill doubled its production capacity of cold-water swelling starch (CWSS) at its Pandaan sweetener plant in Indonesia. CWSS is ideal for cold prepared dairy products, snacks, bakery products and fillings, and sauces and dressings.

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