Westford, USA, Oct. 25, 2022 (GLOBE NEWSWIRE) -- The Cinnamon Market will be worth $1.28 billion and employs around 20,000 people. The industry growing at a CAGR of 7.6%. However, there are challenges faced by the market such as a lack of quality standards and low demand from developed countries.
Government policies and regulations have an important role to play in the growth of the cinnamon market. For instance, India has restrictions on exporting cinnamon to other countries which hinders its ability to compete with other exporters. There are also issues with quality control as farmers often harvest unripe cinnamon pods which leads to inferior quality products. This can be overcome through better Quality Assurance (QA) processes which must be in place for the Cinnamon Industry to grow sustainably.
Traditionally, cinnamon was grown in Sri Lanka, Indonesia, Indonesia, Vietnam, Madagascar, and Brazil but recently economies in these countries have slowed down presenting new opportunities for growth in other countries such as Ethiopia and Uganda where production is expected to double over the next few years. There is potential for value addition to this product such as flavoring cosmetics or foods with natural sweetness such as coffee or tea. The global cinnamon market potential for flavored beverages is $10 Billion globally and growing at a rate of 6%. Profitable niche markets can be identified that can cater specifically to local tastes such as hot chocolate or berry-flavored drinks etc.
The major companies operating the in global cinnamon market are PT Super Star International, Jardinière Foods International, Arrowhead Mills, Fortissimo Snacks Ltd., Van Houtte Canada Corp, and Yellow Shamrock Trading PTE Ltd.
However, it faces several challenges. The main one is competition from other spices, such as black pepper and cardamom, which are cheaper to produce and have a larger market share. Another issue is price volatility. Prices for cinnamon vary a great deal from day to day, making it difficult for producers to make decent profits.
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SkyQuest has done an in-depth analysis of the global cinnamon market and has devised a five-point plan to help producers increase their profitability. First, they suggest looking into new marketing channels and expanding distribution channels. Secondly, they urge producers to improve production efficiency so that they can maintain higher prices while also reducing costs. Thirdly, they recommend developing new products and increasing the range of ingredients that are used in cinnamon products. Finally, they advise producers to engage in product innovation and create unique versions of existing products that can capture more market share.
Vietnam, China, Indonesia, and Sri Lanka Produce Over 90% Global Cinnamon
Global cinnamon market’s production is mainly located in four countries: Vietnam (12%), China (30%), Indonesia (41%), and Sri Lanka (8%). In fact, these four countries in Asia produce over 90% of the world’s cinnamon, while Europe accounts for just under 5%.
The main varieties of cinnamon are the sweet type (described as “hard” or “firm”), which comes from Vietnam and Sri Lanka, and the more pungent type (also referred to as strong) that comes from Indonesia. The two types are distinguished by their scent and flavor in the global cinnamon market. Sweet cinnamon is generally sweeter than its strong counterpart, has a fruity fragrance, and is used mainly for baking goods such as cookies and cake. Strong cinnamon has a harsher taste with a more aromatic fragrance and is used most often in savory dishes such as curries.
The reasons for the high production rates in these four countries are manyfold. Firstly, there is a large population base that enjoys consuming cinnamon products. Secondly, each country in the global cinnamon market has a long history of Cinnamon cultivation and use. Lastly, each country has invested in research and development to improve cinnamon production methods.
Despite these favorable factors, competition from other geographical regions (particularly India) is increasingly challenging the traditional cinnamon market dominance of these four countries. Furthermore, some scare diseases have caused problems in certain past years with regards to crop losses and quality issues with spices such as Cinnamon applications in food products around the world are steadily increasing due to its unique flavor Profile which helps elevate different cuisines.
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Growth, Opportunities, and Challenges
The cinnamon market is booming, with growing demand from both the foodservice and retail markets. Cinnamon is an important spice widely used in cooking across Asia Pacific. It has various culinary uses including both sweet and savory dishes. In particular, it is commonly used in Vietnamese cuisine which combines it with sugar and herbs to create different types of Vietnamese desserts such as cinnamon rolls and pho. Beyond its culinary applications, cinnamon also has traditional medicinal properties that are used in some Asian cultures to treat ailments such as asthma and headaches.
Global production in the cinnamon market has increased by 20% over the past five years, while imports have decreased by 15% in countries like India. This discrepancy is due in part to rising exports of Ceylon Cinnamon, which now account for more than 60% of overall imports.
Despite this growth, there are still many challenges facing the cinnamon market. Poor weather conditions in some parts of the world are causing lower output and higher prices, while competition from other spice derivatives is intensifying. However, with the right strategies and plenty of hard work, there is substantial potential for growth in this important sector.
A number of companies are bullish on the prospects of the cinnamon industry and are investing in R&D initiatives to develop new products and expand their footprints in various geographies. Some of these companies include Gerber Terminals Ltd., FMC Corp., Firmenich SA, Archer Daniels Midland Company (ADM), Danone Group NV, Hindustan Unilever Limited (HUL), Hershey Company Inc., Nestle SA, Wilmar International Ltd., and others.
Some key trends that are expected to affect the global cinnamon market during the next five years include increased consumption of flavored foods across Asia Pacific region; increased demand from bakery operators due to changing consumer behavior; growing popularity of Indian cuisine; and increasing awareness about health benefits of using cinnamon as an ingredient across different segments including grocery stores.
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Top Players in the Global Cinnamon Market
- McCormick & Company (US)
- Cinnatopia (Sri Lanka)
- G.P. de Silva & Sons International (Pvt) Ltd. (Sri Lanka)
- Ceylon Spice Company (Sri Lanka)
- Elite Spice (Maryland)
- FutureCeuticals (US)
- Kahawatte Plantations PLC (Sri Lanka)
- High Plains Spice Company (US)
- Natural Spices of Grenada (US)
- Lemur International, Inc (US)
- New Lanka Cinnamon Pvt. Ltd (Sri Lanka)
- Great American Spice Co (US)
- Risun Bio-Tech Inc. (China)
- Monterey Bay Spice Company (US)
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