Specialty ingredients play an outsized role in producing healthy, affordable products for the global market. The term “specialty” applies to specific subcategories of ingredients across several product lines to describe food, cosmetics and other products that meet higher standards of regulation in the U.S., Europe and global markets.

This distinction is vital for manufacturers counting on reliable access to quality products.

What Are Specialty Ingredients?

Specialty ingredients contribute a specific benefit or attribute to the production of goods. This key benefit may accomplish several goals, including enhanced:

• Product stability or shelf-life
• Quality
• Sustainability

The food and beverage industry is the most common reference point for specialty ingredients. The term is also used prominently to describe products in the chemical and life science industries.

What Are Specialty Food Ingredients?

Specialty food ingredients improve food and beverage product results by providing critical enhancements of texture, coloring, appearance, nutrition, shelf-life and affordability. The most common specialty food ingredients by volume are usually categorized as follows:

• Acidulants
• Colors and dyes
• Emulsifiers, including hydrocolloids
• Flavors, including natural flavors
• Preservatives
• Sugar substitutes
• Functional food ingredients
• And more

These ingredients are critical to food formulation across markets, including bakery, dairy, meat & poultry and confectionary, to name a few.

What’s Driving the Specialty Food Ingredients Market?

Specialty food ingredients reached an estimated value of $148.2 billion in 2022. At the projected 5.8% CAGR, the market is expected to exceed $196.2 billion by 2027. Much of the growth in specialty foods is focused on Asian markets, driven by increased demand for meat and poultry products and dairy-based foods.

A global focus on fortified food products has ignited increased demand. In the wake of the COVID-19 pandemic, consumers across markets have emphasized a renewed interest in addressing nutritional deficiencies through high-quality food products.

FDA Regulations for Food Ingredients

In the U.S., regulation of food ingredients is provided by the Food and Drug Administration (FDA). The FDA places specialty ingredients as a variation of a food additive, which it defines as “any substance the intended use of which results or may reasonably be expected to result – directly or indirectly – in its becoming a component or otherwise affecting the characteristics of any food.”

This legalese is purpose-driven; it allows the FDA to require premarket validation of any ingredients used in the production, processing, packaging, transportation or storage of food.

In Europe, the food safety is regulated by the European Commission through an independent agency, the European Food Safety Authority (EFSA). These organization standardize regulations and enforcement across EU member countries.

How Are Specialty Food Ingredients Approved?

The FDA evaluates every ingredient’s health value and safety, including specialty products. The products on the market today are among the most studied and regulated available to any manufacturer or end user in any market. Through a petition, testing and safety evaluation process, the FDA ultimately decides how much of an ingredient can be used, in what applications, how it should be labeled on finished foods, and additional usage recommendations.

Much of this guidance is cataloged in the Good Manufacturing Practices (GMP) system, which is updated regularly.

What Are Specialty Chemicals?

Specialty chemicals, also known as performance chemicals, are highly engineered and manufactured chemicals designed to offer a specific benefit to a finished product. Specialty chemicals are used across consumer and industrial applications as a single input unit or a complex formulation.

Specialty Chemical Applications

Most specialty chemical ingredients are made in small batches to meet specific needs. These small-volume formulations are used in a surprising array of applications, including:

• Adhesives
• Antibiotics
• Coatings
• Cosmetics
• Life science
• Lubricants
• Pesticides
• And more

Chemical Regulation

Specialty chemicals are regulated by the FDA, the Environmental Protection Agency (EPA) and international agencies. All chemical ingredients are studied and evaluated, as are the manufacturing and storage facilities that handle these substances. Changes to ingredient standards are often shaped by close collaboration between regulatory bodies and industry representatives.

Specialty Chemicals vs. Commodity Chemicals

The critical difference between specialty and commodity chemicals is production quality.

Specialty chemical ingredients are engineered for specific needs and applications. They are made in small quantities in specialized manufacturing facilities.

Commodity chemicals are relatively simple to create and can be mass-produced. Like other globally traded commodities, they’re considered ‘fungible’ or interchangeable. There are no proprietary distinctions between a commodity chemical manufactured by a firm in the U.S. and one made in China.

What’s Driving the Specialty Chemical Market?

The specialty chemicals market reached $836 billion in 2022, adding nearly $40 billion from the previous year’s value. By 2030, the industry will be worth approximately $1.1 trillion, growing at a forecasted CAGR of 4.1%. The driving forces behind the industry’s growth are attributable to increased demand for personal care products. Specifically, consumers are looking for sustainable “green” products. This has led to rapid innovation and the creation of ingredients that utilize biologically-available inputs and more energy-efficient means of production.

Market growth is therefore focused on pharmaceutical and nutraceutical products, agrochemicals, and flavor ingredients.

The Future of Specialty Ingredients

One of the most critical industry reactions to accelerated growth has been reprioritizing and outsourcing product research and development. Instead of costly in-house research, many firms are looking to specialty chemical companies like Tilley Distribution and others to provide solution-based product research faster and with lower costs. This approach accelerates development and gives brands a go-to-market strategy on shorter timelines and increased margins.

Specialty Is What We Do

Tilley Distribution’s research and development services and expansive product catalog make us a resourceful and full-service partner. With industry expertise and Technical Fellows on staff, we provide specialty ingredient solutions at any scale and accelerated timelines. Let’s get started; speak with a Tilley representative today.