Gelatin is slowly getting popular among health enthusiasts as it was only used for making products that taste good such as fruit gelatin, gelatin ice cream, etc. Gelatin is an animal derivative extracted from leftover body parts such as skin, bones, hooves, etc. Many individuals do not know about the real source of gelatin as they think it as a vegan product. Although there is a vegan alternative to gelatin i.e. Agar-Agar, it is quite specific and expensive when compared to animal-based gelatin. However, the demand for Agar-Agar is also increasing due to awareness about its health benefits among vegan consumers. Talking about the chemical aspect of gelatin and its benefits, the most common types of gelatin are collagen peptides or hydrolyzed gelatin. Gelatin usually contains 86 percent of protein which is quite high. The rest 14 percent of gelatin contains moisture and minerals.
Gelatin is the main ingredient in many confectioneries and pharmaceutical drugs. Both the food industry and the pharmaceutical industry are its biggest end-user industries. Apart from these two industries, the other end-user industries of gelatin include cosmetics industry, personal care products industry, and chemical industry. Apart from the different types of edible jellys and drugs, gelatin is used in manufacturing shampoos, thickeners, gelling agents and make-up products. The gelatin market report suggests that the industry is expected to show a Compound Annual Growth Rate (CAGR) of 4-5 percent till 2020. The food industry being the biggest end-user of gelatin holds approximately 66 percent market share whereas pharmaceutical industry holds approximately 34 percent market share.
Global Gelatin Market Analysis:
The global gelatin market is quite huge and it is also fragmented and spread across various global regions. Being one of the biggest consumers of gelatin, the U.S. imports large volumes of gelatin which is used as a primary or secondary ingredient in industries such as food & beverages, pharmaceuticals, paper, and more. Being a net importer of gelatin, the U.S. fulfils its capacity additions from regions such as Brazil, France, and China. However, the pharmaceutical industry is increasing its consumption of gelatin and therefore, the demand for medical-grade gelatin is rising.
Due to such trends, the gelatin market is likely to grow at a CAGR of 2-3 percent in the coming years. The growth will increase the production of gelatin on a global level. The net production of gelatin is expected to reach 420 KT by 2020. The gelatin market is an ideal example where supply and demand go hand-in-hand. The global manufacturers of gelatin comprise of Gelita AG, Rousselot, Weishardt, Nitta Gelatin, PB Gelatins, Sterling Biotech, and Narmada Gelatins. All these players are also working towards increasing their capacities for a better output. In addition, these companies also own approximately 65-70 percent market share which provides leverage to the organizations. The same is the case with global pharmaceutical companies as they buy gelatin in large quantities that also does not leave much room for negotiation.
Global Gelatin Market Opportunities:
Gelatin is a food product that is going to be in high demand in the near future. This is a great opportunity for aspiring entrepreneurs willing to start a business in this industry. The choice of the business model depends entirely on the entrepreneurs as they can either opt for a supply/outsourcing model or they can choose to manufacture gelatin. Gelatin can be supplied as a raw material to the small and medium-scale organizations that usually have medium-level demand on a regular basis. This is an ideal scenario for first-time entrepreneurs as they can take their time and understand the market, and then try to cater to the needs of the organizations gradually.
On the other hand, gelatin manufacturing can be started from a small setup that may be home-based or as basement startups and entrepreneurs can choose to manufacture flavored gelatin or fruit jello. Both business models have their dynamics and like any other business, it takes time to understand those. Entrepreneurs must consider aspects such as global market outlook, capacity outlook, supply-demand outlook, and industry best practices.
Another gelatin business model is vegan gelatin which is an innovative idea where the gelatin does not involve any animal product. This is a significant change in the global gelatin market which will drive the growth further and increase the customer base. Artificial gelatin derived from microbes through fermentation is another innovation pursued by specific organizations. However, this process is quite complicated as it requires a laboratory-like controlled environment.
Being a highly fragmented market, the global gelatin market is dominated by a few key players. However, new startups and organizations are entering the market and this is causing a positive disruption where new business ideas and manufacturing methods are taking place. This may not be considered an ideal scenario for the global market but continuous innovations and new ideas will certainly evolve the market for good