Global Food Glazing Market – Reinforcing Retail Food Growth

Additives which when applied over food products provide it with polished, protective, and shiny coating, are known as food glazing agents. Bakery and confections, fruits as well as ready-to-eat (RTE) products, among others are generally applied with food glazing agents. These additives are derived from both artificial and natural sources.

Vegetable Waxes, Beeswax, Other Insect Waxes and Spermaceti, Whether or Not Refined or Coloured (Excluding Triglycerides)

In Thousands of US Dollars

Source: International Trade Centre

The food and beverage industry has been experiencing a rapid transformation during the past few years due to a multitude of factors that are inclusive of but not limited to digitalization, globalization, incomes increase, internet penetration, policy changes, population growth, shifts in food consumption patterns and diets, trade liberalization as well as urbanization. One of the most significant to start with is globalization, which has food markets in both developing and developed markets. This is mainly due to the resultant creation of a single global market that is devoid of protectionism and is promoted by trade agreement among various nations. To this end, it is important to note that as of June 2020 there are 303 regional trade agreements (RTAs) were in effect. The most recent being the European Union Vietnam Free Trade Agreement (EVFTA) & EU-Vietnam Economic Integration Agreement (EVIPA) between EU and Vietnam, whereby 65% of duties on EU exported to Vietnam will be reportedly abolished whereas the remaining will be gradually eliminated in coming 19 years. On the other hand, 71 % of duties on exported originating from Vietnam will be eliminated while the remaining be eliminated over seven years.

It is an ambitious agreement that seeks to eliminate almost 99% of customs duty between the EU and Vietnam, it is expected to facilitate investments in the food industry, among others. The complementary nature of Vietnam’s competitiveness in the agri-food sector and labor-intensive industries and the EU’s high-tech and quality management expertise with investment capabilities is expected to make the situation more conducive, especially for the processed food category. Further according to report by Delegation of the European Union to Vietnam one of the benefits from tariff elimination for EU exporters that have been exampled therein is that of food preparations will become duty-free after 7 years. Further facilitating increased access to Vietnamese markets. Further, the internationalization of the food market has effectively contributed to the diffusion of snacking practices among others which has been further augmented by the proliferation of fast-food restaurants across the world, food delivery services as well as increased innovation.

In view of the above, it is important to note the APAC region is expected to drive the global food glazing agents market growth to new heights. Taking the example of the food processing industry of Joan which is to the tune of $220 billion according to USDA reports of July 2020 is known to produce a wide range of food products concomitantly fueling the food retail industry which in 2019 registered a food and beverage sales $483 billion. Confections are one of the leading applications that hold a share of the retail food sector. Particularly to Japan, this is exemplified by the recent launch of a new KitKat snack mix that combines sweet and salty flavors by Nestles. Additionally, convenience is expected to further augment the growth of the market facilitated by digitization. This would partly drive the APAC region to contribute to market growth. For instance despite the COVID-19 pandemic continued to impact the daily operations of chinse food deliver giant Meituan-Dianping’s (SEHK: 3690) merchants, that includes restaurants, hotels, and other local services, the organization reportedly registered a revenue for the end quarter of 2020 increased by 8.9% year-over-year to RMB24.7 billion from RMB22.7 billion for the same period of 2019.

Moreover, the Gross Transaction Volume of its food delivery business increased by 16.9% year-over-year to RMB108.8 billion. At a rate of 6.9% year-over-year, the daily average number of food delivery transactions increased to 24.5 million. The food delivery business further registered an increase in average value per order by 9.4% year-over-year.  The operating profits from the food delivery business transitioned to a positive figure of RMB1.3 billion for the second quarter of this year and increased by 65.7% year-over-year with operating margins improving by 2.7%-points year year-over-year. On the other hand, in India, Amazon.com, Inc. (NASDAQ: AMZN) had launched its online food delivery operations in select pin codes of Bengaluru. With Amazon Food this strategic initiative comes when Uber sold its food delivery business, Uber Eats, in India to local rival Zomato during January 2020, suggesting the degree promise which the Indian market holds.

Rural Population (% of Total Population)

Source: World Bank

Before all foregoing, it is important to note that the globalfood glazing agent market is also influenced by the increasing global population and rural to urban migrations. In view of the above, the gradual growth of the population and simultaneous rapid urbanization and adoption of new trends is anticipated to further drive the demand for processed food. A marked shift from the traditional means of food and beverage consumption and increasing expenditure on processed food which is native to urban and peri-urban areas. Presently a majority of the global population lives in urban areas. In 2018, Northern America was the most urbanized region in the world, with 82 % of its population living in urban areas. Further, according to the UN, the share of the global population is anticipated to rise from 55 % in 2018 to 60 % in 2030. Additionally, the fastest-growing cities are in Asia and Africa, with the African urban population projected to grow three times the present and that of Asia is to increase by 61% which in turn is expected to propel the growth of the urban population. By 2030 the number of megacities is expected to increase numbering to 41 hosting 14% of urban dwellers across the world.