Strategic Analysis of Xanthan Gum Market

The global xanthan gum market is expected to remain consolidated in nature, owing to the large presence of globally prominent players and their recent moves on capacity expansion. In 2015, Fufeng Group Company Limited, CP Kelco, and Deosen had dominated the global xanthan gum market in terms of revenue generation. At the time, they had captured almost 58.1% of the global xanthan gum market. Given the overall consolidated market nature, these players are likely to remain in the lead for the time being.

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According to a research report released by Transparency Market Research, the degree of competition in the global xanthan gum market is expected to change over the coming years due to a very high scope of entry by newer players from North America. From the global market’s perspective, this threat is likely to remain moderate due to the leading production rates by other regions. The global xanthan gum market is predicted to expand at a CAGR of 7.7% in revenue, within a forecast period from 2016 to 2024. This revenue is expected to reach US$1.25 bn by the end of 2024, after reaching US$651.5 mn at the end of 2015. In terms of volume, the global xanthan gum market is expected to expand at a CAGR of 7.3% for the same forecast period.

Demand for Xanthan Gum in Food and Beverage Sector likely to Skyrocket

“The food and beverage sector has always been a leading end user in the global xanthan gum market. Given is nearly irreplaceable use as a stabilizer and a thickener, xanthan gum manufacturers have consistently strived to increase their value in the food and beverage sector and have managed to do so with great success. The scope of xanthan gum in foods is expected to grow even larger over the coming years, with a growing rate of food consumption across the global urban population. The extremely large demand for processed foods and convenience foods is expected to surge till 2024, further increasing the scope of revenue generation in the global xanthan gum market,” states a TMR analyst.

The global xanthan gum market is also being driven by the greater preference of xanthan gum in the food and beverages industry over other hydrocolloids, owing to its better performance as a stabilizer. Additionally, the primary substitute for xanthan gum – guar gum – is expected to witness a drop in supply rates over the coming years, owing to the growing demand for stabilizers and the inability of guar gum manufacturers in meeting this demand due to the seasonal nature of guar seeds.

Quality Concerns Continue to Plague Global Xanthan Gum Market

The problems associated with the inferior quality of production of xanthan gum continues to restrain the global xanthan gum market. The imports of xanthan gum from Austria and China were earlier deemed of a sub-par quality and were introduced to markets in the U.S. and other developed nations at a less-than-fair price in comparison to the international market. This resulted in several countries and especially the U.S. to implement strict anti-dumping policies for xanthan gum imports. Additionally, several research organizations showed that some of the xanthan gum manufactured in China was unfit for use in food and beverages, although being labelled as safe for consumption, due to the presence of impurities that diluted the overall quality of the shipped product.

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“While the imports of xanthan gum from China and Austria into the U.S. are slowing down considerably, it is providing players within the U.S. to rise up to the occasion. It has thus formed a highly beneficial opportunity for these players to increase their shares in the global xanthan gum market,” adds the analyst.




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