Australia’s food additives market is set for steady growth through 2025 and beyond, with key drivers including evolving consumer preferences, an expanding food industry, and increasing regulatory pressures, according to new market data from Mordor Intelligence.
The market is expected to grow at an annual rate of 2.9 per cent from 2025 to 2030. This growth will be propelled by increasing demand for processed foods, rising consumer awareness, and heightened regulatory scrutiny.
Food additives, which are substances added to enhance safety, taste, texture, and appearance, have become commonplace in Australia’s food industry. The market covers various categories, including preservatives, sweeteners, emulsifiers, food colorants, and flavour enhancers.
These additives are applied across multiple sectors, such as bakery, dairy, beverages, meat products, and confectionery.
Key drivers
The primary driver of this market in Australia is the continued growth of the processed food sector. With Australians leading increasingly busy lifestyles, convenience foods are becoming a staple. Rising disposable incomes and longer working hours are also contributing to the demand for packaged, ready-to-eat meals.
In parallel, the retail sector’s expansion has played an important role. Supermarkets and organised retail stores have made a range of food products, many of which contain additives, easily accessible to consumers. The use of additives to improve shelf life and product appeal has become standard practice in the retail space.
However, there is growing consumer concern regarding the potential health risks associated with synthetic chemicals and food additives, particularly for children. As awareness of these concerns increases, demand for natural food additives has been rising.
Consumers are increasingly opting for products with fewer artificial ingredients, prompting manufacturers to adjust their offerings in response to changing preferences.
Clean-label additives
A prominent trend in this market is the rising demand for clean-label ingredients. Consumers are becoming more interested in knowing exactly what is in the products they purchase, leading to a push for greater transparency in food labelling. Clean-label products, which are minimally processed and contain natural ingredients, are seeing growing demand.
This trend is influencing consumer choices, with many opting for products that avoid artificial preservatives, colourants, and flavourings. Instead, they are favouring additives derived from natural sources. Studies suggesting that natural ingredients may mitigate health issues, such as hyperactivity disorders in children, are also fuelling this shift.
While clean-label products may carry higher price tags, more consumers are willing to pay a premium as health and environmental considerations increasingly influence purchasing decisions.
This consumer-driven trend is also supported by regulatory agencies. The World Health Organisation (WHO) and the US Food and Drug Administration (FDA) have been pushing for tighter regulations on food additives to ensure safety. These efforts have helped make trading in natural ingredients more streamlined in Australia, increasing consumer confidence in food safety.
In response to the growing demand for clean-label products, food manufacturers have been innovating new solutions. A prime example is DSM’s launch of DelvoGuard cultures in March 2022, designed to help dairy producers extend shelf life while meeting consumer demand for clean-label ingredients.
This shift towards clean labels is aligned with broader societal concerns about sustainability and ethical sourcing, further pressuring food manufacturers to move away from synthetic solutions.
Sweeteners gaining ground
One key catalyst for future growth in Australia’s food additives market is the rising incidence of diabetes, prompting a shift toward sugar alternatives. As of 2021, nearly 1.3 million Australians, or approximately 1 in 20, were living with diabetes, a condition linked to high sugar consumption. This has led to increased demand for alternative sweeteners such as sucralose, which is considered safer for those with diabetes due to its minimal impact on blood sugar levels.
Sucralose has gained popularity due to its stability during cooking and baking processes. Unlike traditional sugar, sucralose has little to no effect on carbohydrate metabolism and insulin secretion, making it a desirable option for both food manufacturers and health-conscious consumers.
The abundance of sucralose from international suppliers has resulted in a price drop, making it more affordable and increasing its use in various food products. This demand for low-calorie, healthier alternatives is likely to fuel further innovation in sweeteners, particularly as health concerns about sugar consumption continue to rise.
Beverage additives
The beverage sector is also experiencing an uptick in the use of food additives, with manufacturers turning to preservatives to enhance taste, texture, and longevity.
Preservatives are essential in beverages such as soft drinks, juices, and alcoholic beverages to prevent microbial growth and maintain flavour.
The high-water activity, sugar content, and low pH of many beverages provide an ideal environment for bacterial and fungal growth, making preservatives crucial for product safety.
Enzymes, such as cellulase and alpha amylase, are being employed in the brewing industry to improve extraction yields, beer filtration, and stabilisation.
In addition, beverage producers are increasingly incorporating unique local ingredients, including native Australian fruits, to meet consumer demand for novel flavours and stand out in a competitive market.
The health trend has also led to a rise in the use of natural sweeteners like Stevia in beverages. Stevia, a calorie-free and plant-based sweetener, is gaining traction due to its stability under varying heat, light, and pH conditions.
It is now being used in a wide range of drinks, including sodas, juices, teas, and alcoholic beverages. As consumers continue to prioritise health and sustainability, Stevia is expected to see continued growth within the beverage sector.
Looking toward 2030, Australia’s food additives market will continue to be shaped by evolving consumer preferences and the growing demand for clean-label and natural ingredients.
The pressure on manufacturers to balance health standards with environmental sustainability will remain a central concern.
While the market faces challenges, including regulatory complexities and increasing consumer concerns about synthetic additives, these factors are also driving innovation.
Manufacturers who can successfully meet the demand for natural additives, while complying with safety standards and offering competitive prices, are likely to emerge as leaders in the market.
As the industry evolves, the ability to adapt to new technologies and shifting consumer attitudes will be key to success in this growing sector.