Global Inulin Market Scenario for 2022

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By: Aditya -- Research Analyst

21 August, 2022

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Global Inulin Market Scenario for 2022
ARTICLE

inulin market

Inulin is a prebiotic soluble dietary fiber, which at a commercial scale is derived mostly from chicory root fiber, while other major feedstock are agave and Jerusalem artichoke, with the key benefit of consuming inulin seen to be improving digestive health and aiding weight loss.

The global inulin market is currently valued at $1.1 billion in 2021 and is projected to witness a strong growth at a CAGR of 6.7 percent over the 2021–2026 period. This is driven by the rising demand for low-calorie sugar consumption, fat replacer in food products such as baked goods and desserts, and increasing demand from the dairy industry for formulations in ice cream, yogurts and cheese, and infant food formula.

Further increasing usage for sports nutrition, functional beverages, nutraceutical products, and pharmaceutical use is seen to drive the growth in demand.

The overall inulin capacity is projected to reach 479.6 thousand MT by 2023. This is driven by the capacity expansions of major suppliers to meet the anticipated rise in demand, with Europe expected to remain the major supply base and top consuming region.

Global Inulin Production Capacity In Metric Tons (MT)

Year

APAC

AMERICAS

EMEA

TOTAL

% Y-o-Y

2017

105,507

62,514

138,252

306,274

7.0%

2018

108,901

66,265

142,746

317,912

3.8%

2019

114,823

72,891

146,093

333,808

5.0%

2020

132,707

77,994

156,488

367,188

10.0%

2021

150,909

80,334

159,813

391,056

6.5%

2022 (F)

154,960

81,400

160,053

396,413

1.4%

2023 (F)

160,174

156,472

163,014

479,660

21.0%

Source: Industry Expert, Company Reports, Research Journals, Beroe Analysis

Historical Perspective

Prices of major inulin grades have witnessed an increase that is driven by tight supply owing to the wet conditions in key producing regions of Europe during the chicory growing stage in the summer of 2021. This caused an increasing incidence of defects and diseases in the chicory roots, thus tightening availability.

Inulin Grade

Current Price

Price Movement

Inulin (90%) NON-GMO 
Composition: Minimum 90% chicory root-based inulin + Maximum 10% Glucose + fructose +sucrose

(February 2022): 4,120 $/MT 

14.5% vs February 2021

icon
18.1% vs February 2020

 

Market Outlook

Global chicory root production for the 2022 harvest is projected to increase by 10–15 percent Y-o-Y, driven by an estimated increase in European acreage and yield in key producing regions. This is coupled with the higher output anticipated from South America (Chile) in line with Beneo’s capacity expansion.

Europe Chicory Harvest Expectations 2022

The top chicory producing regions whose supply volumes are crucial for inulin production are: The Netherlands, Germany, France, Belgium, and partially LATAM.

  • An overall yield increase of 10–15 percent is expected for 2022 versus 2021, due to the increased acreage in France, Belgium, Poland, and Germany, in an average of 10 percent versus the prior season.
  • This increased acreage in Europe has been driven by the contracted buyers, due to the higher demand for inulin from the fast-moving consumer goods (FMCG) industry.
  • The 2022 summer period is expected to be dryer than 2021 in Europe; therefore, a lower defect rate is expected with higher average calibers. (The summer of 2021 was predominantly characterized by wetness and rainfall, and this generally causes defects and diseases in chicory roots).
  • Also, in parallel with Beneo’s expansion plan for inulin manufacturing in Chile, a new contract farming model is being implemented in the region to secure the supply of chicory roots by the end of 2022. 
  • Therefore, an additional acreage (~15 percent) and higher crop yield (~20 percent) are expected from South America, mainly Chile. This contributes to the estimated overall global increase in chicory root output for the current harvest by 10–15 percent versus 2021.

Price Outlook

 Prices of major inulin grades are projected to continue the uptrend over 2022–23, driven by cost inflation seen from higher input costs, such as fertilizers and energy, coupled with the higher demand seen from downstream industries with rising health-conscious consumption patterns.

Forecast Horizon

Price Change

Market Analysis

Short Term (March–June 2022)

1–5%

Currently, most of the major market players, such as buyers from the downstream sectors, have coverage until June 2022; therefore, price movements are expected to remain rangebound within a range of 5% for the next 6 months.
There is no immediate impact seen from the ongoing Russia–Ukraine conflict apart from higher energy costs, as neither country has any significant production/consumption volumes of inulin nor are likely to disrupt trade flows. The only potential impacts expected in the next 3–6 months are with new contracts, as there will be demand shifts due to likely market exits of major global players from the Russian market.

Long Term (H2 2022)

5–8%

For H2 2022, new bookings from the FMCG players are expected to support Q4 product launches, with an upward price trend of 5–8% expected for this period.
The projections for 2023 indicate an overall rise in prices, as expectedly driven by cost inflation seen from higher input costs, such as fertilizers and energy, coupled with higher demand seen from downstream industries with rising health-conscious consumption patterns.

 

Sourcing Recommendations for the Inulin Market

  • One year or less contract duration with two or more suppliers with flexible terms for sourcing quantities along with price determination at the time of booking is the general engagement contract type for chicory root fiber Inulin.
  • Approximately 80 percent of the chicory root fiber used in the food industry is consumed for limited edition products or new product launches in the market. Therefore, the buyers avoid committing certain volumes to the suppliers and supply contracts are undertaken on project basis according to the project requirement.
  • The price of the chicory root fiber is determined at the time of each order/booking because no annual or quarterly volume is committed.
  • Product launches generally have a target sales volume, but there is no market guarantee for the sales quantities, and this situation forces the buyers to seek flexible terms for sourcing quantities of chicory root fiber. 
  • It is advisable for the buyers to distribute their procurement volume of inulin over multiple suppliers, although ideally not exceeding two or three for supplier contingency with regional sourcing within Europe or hybrid for other regions seen to be favorable.

Impact of the Russia–Ukraine Conflict

  • There is no immediate impact seen from the ongoing Russia–Ukraine conflict apart from higher energy costs, as neither country has any significant production/consumption volumes of inulin nor likely to disrupt trade flows.
  • The only potential impacts expected in the next 3–6 months are with new contracts, as there will be demand shifts due to the likely market exits of major global players from the Russian market.
  • Chicory root acreage in Europe is >90 percent contracted farming. This denotes that the acreage, crop quantity, and estimated sales are contracted in advance by major inulin producers. Hence, there is no likely shift in acreage expected to other crops, such as wheat, sugar beet, corn, or sunflower, as the chicory acreage is marginal in relative terms, compared with these grains and oilseeds that would insulate European chicory output from being impacted by the war.
  • Further, competing acreage from sugar beet in Europe is unlikely, as the EU beet industry is currently plagued with the growing incidence of the “beet yellow virus,” and with the increasing clampdown by the EU on the use of neonicotinoid insecticides, coupled with the surging input costs for beet cultivation, this is seen as a deterrent for promoting beet cultivation at the expense of chicory.


Global Inulin Market Top Suppliers and Capacity Expansions

The global inulin industry is a concentrated market, with the top three producers—Beneo, Sensus, and Cosucra—dominating the market share. In line with growing global demand, capacity expansions for 10 suppliers have been identified, and these are scheduled for completion by 2022–23.

Supplier Name

HQ Country

Product

Sensus (Royal Cosun Group) 

The Netherlands

Frutafit® and Frutalose® Chicory root Inulin 

Beneo-Orafti 

Germany 

Orafti® Chicory root Inulin

Cosucra Groupe Warcoing SA 

Belgium 

FIBRULINE™ Chicory root Inulin

Ingredion Inc.

USA

Chicory root and agave Inulin

Hebei Vilof Agrotech Co., Ltd.

China

Chicory root Inulin

The Tierra Group

USA

Fiber-Blu® Agave Inulin

The Green Labs LLC.

USA

Organic agave and Jerusalem artichoke Inulin

Source: Industry Expert, Company Reports, Research Journals, Beroe Analysis

Expected Capacity Expansions for 2022–23

 

1

The Iidea Company (Mexico) – Capacity extension on the current agave-based inulin line (capacity addition of ~8,00 MT, estimated to be completed by 2023)

2

Beneo-Orafti – New chicory root-based inulin production site at Pemuco, Chile (capacity addition of ~80,000 MT, estimated to be completed by the end of 2022)

3

Cosucra Groupe Warcoing SA – Additional capacity on chicory root based-inulin line (Belgium) (capacity addition of ~1,400 MT, expected to be available by mid-2023)

4

Sensus (Royal Cosun Group) – Capacity extension at Roosendaal, Netherland (capacity addition of ~9,00 MT, expected to be ready by Q1-2023)

5

Nutriagaves de México SA de CV – Capacity extension on agave-based inulin production (capacity addition of ~4,50 MT, estimated to be available by Q3-2023)

6

The Tierra Group – Capacity extension on agave-based inulin production (capacity addition of ~250 MT, estimated to be available by Q1-2023)

7

Fuji Nihon Seito (Japan) – Capacity extension for sugar cane-based inulin (capacity addition of ~750 MT, estimated to be finished by Q2-2023)

8

J. RETTENMAIER & SÖHNE (Germany) – Capacity extension for chicory root fiber-based inulin (capacity addition of ~350 MT, estimated to be available by the end of 2022)

9

Hebei Vilof Agrotech Co., Ltd. (China) – Capacity extension for chicory root fiber-based inulin (capacity addition of ~1,900 MT, estimated to be available by Q2-2023)

10

Chongqing Joywin Natural Products Co., Ltd (China) – Capacity extension for chicory root fiber-based inulin (capacity addition of ~1,100 MT, estimated to be available by Q1-2023)

 

Conclusion and Key Takeaways

  • The overall global inulin capacity is projected to reach 479.6 thousand MT in 2023. This is driven by the capacity expansions of major suppliers to meet the anticipated rise in demand, with the major capacity expansion being that of Beneo-Orafti’s new chicory root-based inulin production site at Pemuco, Chile.

  • Global chicory root production for the 2022 harvest is projected to increase by 10–15 percent Y-o-Y. This is driven by an estimated increase in European acreage and yield in key producing regions, coupled with a higher output anticipated from South America (Chile) in line with Beneo’s capacity expansion.

  • Chicory acreage is seen to rise in key producing regions of France, Belgium, Poland, and Germany by an average of 10 percent for 2022 versus 2021, with favorable weather expected for the European summer of 2022, which is likely to reduce defect rates.

  • Prices of major inulin grades have witnessed an increase driven by tight supply owing to the wet conditions in key producing regions of Europe during the chicory growing stage in the summer of 2021, which has caused an increasing incidence of defects and diseases in the chicory roots, thus tightening availability.

  • Prices of major inulin grades are projected to continue the uptrend over 2022–23. This is driven by cost inflation seen from higher input costs, such as fertilizers and energy, coupled with higher demand seen from downstream industries with rising health-conscious consumption patterns.

  • It is recommended to opt for long term contracts, with one year contracts covering the general terms and conditions, payment terms, product attributes and specifications, insurance terms, and other similar contract clauses.

  • Contracts with flexible terms for sourcing quantities along with price determination at the time of booking are the general engagement contract type for buyers for chicory root inulin.

  • It is advisable for the buyers to distribute their procurement volume of inulin over multiple suppliers, although ideally not exceeding two or three for supplier contingency with regional sourcing within Europe or hybrid for other regions seen to be favorable.

 




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