Xanthan Gum – Procurement Best Practices & Sourcing Strategies

DESCRIPTION

Xanthan Gum Market Global Size:

The global xanthan gum market is projected to expand at a substantial rate due to the growing vegetarian lifestyle among people. Also, as per ELINT Market Research’s latest procurement analysis, the rising concerns about cruelty towards animals and the environment have lately led to an increase in consumer preferences for vegan cuisine, which has stabilized the global hydrocolloids market at a significant 3.10 MMT size in 2022-2023. Further, hydrocolloids are employed as nutritional additives in food composition to influence the consistency, taste, and longevity of food items, the industry is expected to reach a supply growth rate of 15 percent in the same year.

Moreover, the report revealed that the constantly increasing crude oil prices can cause an upsurge in the xanthan gum sector’s expenses. The reason behind this spike can be linked to the boost in worldwide energy consumption when China’s tight limitations were lifted after 2022. Additionally, major xanthan manufacturing regions are propelling capacity restraints for the international market that contribute to the firmness in prices. Also, this stability is anticipated to move forward due to a sharp increase in xanthan gum demand, which will not disrupt the market dynamics.

Market Definition:

Xanthan gum is a versatile hydrocolloid that is suitable for vegans and vegetarians and mainly originated from plant-based compounds and bacteria. The major work this hydrocolloid plays is in the food industry, because of its preserving and insulating qualities, which contribute to longer shelf life, aromas, and formation of food products. In addition, xanthan gum is also used in recipes for bakery items, beverages, stews, ice cream, dipping sauces, wheat-free goods, and other items because of its strong nutritional value.

Xanthan Gum Market Drivers:

1. Rising Demands from Oil Industry –

Apart from the food and beverage industry, the oil sector also employs xanthan gum in the form of environment-friendly drilling fluid due to its high resistance quality against any type of chemicals and temperatures. Hence, this elevated adoption by the oil industry is driving rapid expansion in the xanthan gum market.

2. Extended Requiremnt for Ready to Eat Food Items –

Another substantial factor driving growth in the global xanthan gum market is the extended requirements for ready-to-eat products among individuals. As xanthan gum is known as a key stabilizing agent that enhances the shelf life of food items; thus worldwide food & beverage companies employ this hydrocolloid gum.

Xanthan Gum Market Challenges:

1. Shifts in Raw Material Costs –

The key raw material for manufacturing xanthan gum is carbohydrates that involve corn or soy. These raw materials prices are volatile and can change due to weather impacts, farming situations, and economic matters. Hence, it is a major challenge that xanthan gum-producing companies face.

2. Adherence to Regulatory Standards –

As xanthan gum is mainly used in the food and beverages industry, its manufacturing firms are required to adhere to strict regulatory standards like the FDA (Food and Drug Administration), which causes challenges for them.

Xanthan Gum Market Opportunities:

1. Xanthan Gum Utilization in Non-Food Sectors –

The procurement market intelligence companies are experiencing vast growth opportunities due to xanthan gum’s utilization in multiple other industries, except the food sector, which includes cosmetics items, medicine, oil, gas, and industrial operations.

2. Primary Functions of Xanthan Gum –

The international xanthan gum market grabs new opportunities because it can play multifunctional roles such as condenser, stabilizing, dietary agent, and coating material.

Xanthan Gum Market Segmentation:

1. Forms of Xanthan Gum –

The two fundamental forms of xanthan gum are dry and liquid, which is an essential segmentation factor for industry participants. Each form has applications in producing distinct food & nonfood items.

2. Different Substitutes in Food Applications –

This procurement intelligence report indicated some prominent subcategories of hydrocolloids that can help in enhancing food items and held significant percent stakes in 2022 in the international market. These categories include guar gum at 15.87%,  xanthan gum at 5.9%, carrageenan at 2.3%, and corn starch at 20.6%.

Regional Outlook of the Xanthan Gum Market:

Multiple countries emerged as dominant in 2022 in the global xanthan gum market which shapes the market dynamics. In this context, the Asia-Pacific appeared as the leading manufacturing country that fulfills almost half of the global demands for xanthan gum including big regions like Europe and the US. Further, APAC’s pivotal province, China possesses a substantial 32 percent stake in the overall manufacturing cost. Contrarily, when it comes to consumption part, the European region tops the list, as in this nation, people are more aware of using natural products to satisfy their health concerns.

Major Price Drivers of the Xanthan Gum Market:

A few fundamental factors influence price dynamics in the global xantham gum procurement intelligence market. For instance, xantham gum production capacity is reduced in China, which can impact supply chains and eventually could increase xantham goods prices. Further, food and petrochemical industries are encountering elevated demands for xantham gum, which can influence cost layouts in the case of limited supply. Moreover, the last factor is xanthan Gum and corn starch prices can shift due to fluctuations in the expenses of feedstocks and hydrocolloid substitutes.

Contract Length in the Xanthan Gum Market:

The food and beverage industry employs contracts for an average of 3 to 6 months, which helps suppliers and buyers to flexibly change their terms depending on market shifts. Further, the oil and gas industry generally employs contracts for more than 12 months. This long-term agreement helps market players to understand, supply chains more efficiently. Moreover, besides the food and oil sector, other industries employ contracts for less than 3 months duration. The reason behind this, is such industries don’t have higher demands for xanthan gum goods.

Key Suppliers in the Xanthan Gum Market:

There are numerous domestic and international participants in the unified global xanthan gum industry, including CP Kelco, ADM, Jungbunzlauer, and Deosen Biochemical Ltd.