The South America food additives market is expected to grow at a CAGR of 5.3% during the forecast period of 2020-2025. The market is primarily driven by the wide range of applications of food additives in the food and beverage industry, including preservatives, flavor enhancers, emulsifiers, sweeteners, colorants, and other functions. Additionally, the rising demand for convenience and packaged foods, where additives are used in higher quantities, is further fueling the market growth.

However, the market growth is expected to be impeded by stringent environmental regulations, such as those enforced by the FDA for additives used directly in processed foods and food-contact substances such as food packaging products. For instance, regarding the use of preservative and other food additives in Brazil, Article 2 of Decree #2092/1991 states that "all foods, condiments, beverages, or their raw material and food additives which are manufactured, fractioned, preserved, transported, sold, or exposed must comply with CAA requirements. That is, when one of those is imported, CAA requirements will be applied."

One of the key market trends in South America is the rising demand for natural food flavor and enhancers. Latin American countries, such as Argentina and Brazil, are taking action in the battle against obesity with several nations enacting policies designed to curb the consumption of artificial flavors that add up unnecessary calories in the diet. The companies are replacing their artificial ingredient with an extension in the natural ingredient category with an essence of natural flavorings, acceptable ingredients, like fruit and natural sweeteners in the food and beverage category. For instance, in 2014, Givaudan launched a peanuts collection, which was driven by industry demand for new directions in peanut flavors.

Brazil is expected to hold the major share in the regional market owing to the large population base with a potential consumer market. Moreover, the country is experiencing significant development in terms of new product launches and innovations. Major companies are strategizing business expansion in order to increase market penetration and are investing to supplement the production facility in the country. Furthermore, observing an increased inclination of the Brazilian population more towards natural ingredients, the major companies in the market are investing capital in sourcing tools and technologies to upgrade their products to a much reliable and likable category.

The South America food additives market is fragmented in nature owing to the presence of a large number of regional and domestic players. Key players dominating the country s market include Cargill Incorporated, Givaudan, Corbion NV, Firmenich SA, Ajinomoto Co., Inc., and Palsgaard A/S, among others. These players are focusing on strategic approaches such as merger, expansion, acquisition, and partnership to boost their brand presence among consumers. Additionally, new product development is another key strategy adopted by these players to stay ahead of the competition.