How to Grow Your Startup Dealing With Gelatin Products

Gelatin is a byproduct that is derived from animal skin and bones. It is a type of collagen that is colorless and odorless. It is also called Hydrolyzed Collagen, Hydrolyzed Gelatin, or Collagen Peptides in technical terms. Gelatin becomes brittle when dry while it remains moist and stretchy in ambient conditions. It is commonly used in a variety of food products, medicines, cosmetics, and in the manufacturing of specific types of paper. Some common gelatin products that are used in everyday life are jelly candies, drug and vitamin capsules, photographic films, etc.

Global Gelatin Market Outlook:

Despite being used frequently in a variety of industries, pharmaceutical grade gelatin is always in demand due to its application in various drugs and capsules. Due to the steady global economic growth and emerging economies in the Asia-Pacific region, pharmaceutical grade gelatin is going to be in high demand and the gelatin market size is expected to grow at a rate of 4-5 percent till 2020. This will also result in the food and beverage industry losing some of its market share to the pharmaceutical industry, till 2020.

The U.S. is a net importer of gelatin has significant consumption of gelatin in a variety of products such as confectionary, paper, pharmaceuticals, etc. The majority of gelatin imports in the U.S. are received from countries like China, France, and Brazil. The biggest end-user of gelatin is the food industry that has a 66 percent market share whereas the pharmaceutical industry possesses 34 percent market share. With the rising market share of the pharmaceutical industry, the demand for gelatin is going to increase and the reasons are lack of availability of potential substitutes and substantial economic growth in Asia.

The gelatin market size is expected to grow steadily at a Compound Annual Growth Rate (CAGR) of 2-3 percent to reach a volume of 420 KT by 2020. This is due to the increased demand in the food and pharmaceutical sectors. In the gelatin market, supply and demand go hand-in-hand and all the major global players such as Rousselot, Gelita AG, PB Gelatins, Weishardt, Nitta Gelatin, Sterling Biotech, and Narmada Gelatins are operating at their best capacities for maximized output. These 7 companies own almost 65-70 percent share of the market which does not leave much scope for negotiation to the buyers. However, global pharmaceutical and food brands buy large volumes that give them a narrow negotiation bandwidth.

A Startup with Gelatin Products:

Global markets are highly affected by the demand and concerns of the end-users and same is the case with the gelatin market. Majority of products that are now commonplace in the modern lifestyle were developed by corporates to meet changing consumer demands and beat the competition. The gelatin market is no different as the concerns of end-users are influencing changes that will add new market variables.

A big change in the gelatin market is already at the doorstep as new players are entering the market with vegan gelatin that does not include any type of animal byproducts. This will certainly disrupt the traditional animal-derived gelatin market. Many startups are using microbes to form collagen that can be used for deriving gelatin. The process involves fermentation and it does not use animal products or byproducts in any way.

In this business model, microbes are grown in large fermentation tanks which are fed with sugar, oxygen, and salts. Microbes produce protein and collagen is derived from them. The process is similar to brewing but it requires more expertise and a highly controlled environment. However, it is emerging as an alternative to traditional gelatin and is sure to change the market for good. Consumers are the ones that are going to receive maximum benefits as they will have more options to choose from. In addition, vegans and people who do not consume any type of meat will also have another choice.

Gelatin Market Drivers and Trends:

Gelatin demand is at its highest due to the demand from end-user industries and substantial growth in the economy in the Asian region. However, being an animal derivative, gelatin market often experiences fluctuations in the supply of raw materials that affect the market. In addition, raising awareness among consumers about animal byproducts and the production of vegan gelatin may present a challenge for the gelatin market.

Global Trade Dynamics:

Europe is a big exporter of gelatin to countries such as Japan, the U.S., and to other developing nations. On the other hand, China is also a net exporter and the U.S. and Korea are its major export destinations including India.

 

The global import and export trends suggest a considerable hike in the global demand for gelatin in the near future and both the developing and developed nations are going to be the contributors to it. Still, emerging products such as vegan gelatin may survive and drive big changes in the long-term.