Future Market Insights, Dubai:According to the latest study of Future Market Insights (FMI), the global food grade gases market remained in a good shape in 2019, accounting for revenues worth over US$ 5.3 Bn. As with many industries, the market is significantly hit by the global outbreak of coronavirus in 2020, as halt in manufacturing and supply chain operations is causing a slump in demand from numerous end users.
Extension of lockdowns across key economies and major markets and subsequent decline in consumer footfall in restaurants and convenience stores are tightening production and sales of food grade gases. However, panic buying and stockpiling practices triggered by COVID-19 are leading to a spike in sales of processed and frozen foods which may prevent the market revenue from a steep decline.
Carbon Dioxide (CO2) to Remain the Bestselling Category
Food grade CO2 is widely used in beverage production which helps in carbonation and preservation without changing the chemical properties. Accounting for 2/5th of the total sales, food grade CO2 continues to witness relatively high demand and investment as compared to other gases. However, retail stores are limiting sales of ‘non-essential’ food products to combat hoarding, which in turn will be a headwind to the market growth.
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“As the effects of COVID-19 are causing ripple effects throughout the marketplace in term of demand, supply, and production, market stakeholders are rushing to steps to adapt their offerings in the face of new landscape. Recognizing a fall in demand for food grade gases, manufacturers are currently pivoting to ramping up the production of essential medical gases to do their part in combating the virus,” say the FMI analyst.
South Asia Emerges Highly Promising
Stricter food safety regulations and high price point of raw materials in developed markets have been directing manufacturers’ focus towards South Asian countries such as India, where operation and labor costs are relatively low with abundance of raw materials. Opportunities will continue to remain concentrated in the region post COVID-19 pandemic, which currently accounts for 24% of the global market value.
As the trend of convenience gets hold of today’s consumers, packaged and frozen food with healthier attributes will continue to be in greater demand. Food grades gases play an important role in acceleration of these trends, as they preserve a product’s existing quality for a longer period of time. Reopening of factories in China and its dominant role as the world’s factory is highly likely to contribute to recovery of the market from COVID-19.
FMI forecasts the growth outlook of food grade gases market for long term. Gain access to FMI’s exclusive COVID-19 tracker here.
Source: Future Market Insights